Is Alan Joyce "worth it?"

[djtech]

I think Alan Joyce is overcompensated but realistically, that compensation wasn't going to go to the low level employees anyways. There is no real reason to compensate him that much. The board and the public is almost 100% sure that Alan Joyce will stay on no matter what until Project Sunrise launches. The 'incentive' or 'reward' is totally unnecessary for someone who is just doing their job and doing it well (As everyone should).

BUT, you cannot deny that Qantas is a profitable business and has increased revenue and profits year on year despite many financial factors(low aussie dollar, rising fuel prices) working against them. Joyce knows how to run a profitable airline and whilst that might not be popular with customers, it's how you make money.

 

[Melburnian1]

...
Might just be me, but I'm not sure I see the relevance of this thread to the QF Frequent Flyer program?

Relevant if one is a FF delayed because an aircraft needs maintenance when it ought be departing an airport.

Relevant if one believes that for the extra cost (compared to other airlines) the QF experience ought include better catering than is presently the case.

Buck stops with its CEO. He's the one who often says yea or nay to changes - "enhancements."

 

[jb747]

I think it was S&P that warned a year or more ago that Qantas is heading toward a capital expenditure cliff. They can only put off fleet replacement for so long...

And this is one way of manipulating the share price. By not actually buying anything. Looks great in the short term, but horrific in the longer.

I’d like to think he has. Fortuitously or not, waiting so long to commit to 738 replacements can be seen as a win now that MAX is under real price pressure.

It may be under price pressure, but that remains to be seen. The real pressure may yet come from the passengers. I would be reluctant to fly on it. Perhaps I know too much, but the 320 NEO is a vastly superior aircraft. It’s sad, as Boeing could have been bringing a new aircraft to market about now, but the 737 decisions are not going to go away soon. And perhaps not even later.

But, the 737 is not the issue. It’s everything else.

The Intl division is more of an open wound and less of stage IV cancer.

Driven mostly by the fact that they were not running fuel efficient aircraft. And those that were ordered disappeared off to Jetstar.

I’m not sure Project Sunrise will be that significant profit centre.

I expect it will be another Red Roo.

 

[Deleted member]

The salary semantics to me are interesting. I’m not altogether certain that once one reaches the dizzying heights of multimillion $ salaries whether the numbers become less important or not. How many here would love his (base) salary for just a year and then be happy to fall back to earth?
What drives these guys is power, prestige etc. if someone paid me $14,0000.00 in one year, I would retire and live off the interest ..... but that’s just me

 

[theblank]

Alan Joyces financial success at Qantas is all due to massive write downs, redundancies and favourable fuel prices.
The only real feather he can put in his cap is influencing/enforcing social issue changes.

 

[Melburnian1]

The salary semantics to me are interesting. I’m not altogether certain that once one reaches the dizzying heights of multimillion $ salaries whether the numbers become less important or not. How many here would love his (base) salary for just a year and then be happy to fall back to earth?
What drives these guys is power, prestige etc. if someone paid me $14,0000.00 in one year, I would retire and live off the interest ..... but that’s just me

Don't neglect 'greed', although the other rationales appear to be present as well. And an 'entitlement mentality.'

The former CEO at NAB did a good thing in only accpeting A$1m when he departed, despite being entitled to up to A$10m. Deserves respect for that.

 

[dajop]

Alan Joyces financial success at Qantas is all due to massive write downs, redundancies and favourable fuel prices.

Not entirely. There is also the matter of a cosy duopoly

 

[drron]

The salary semantics to me are interesting. I’m not altogether certain that once one reaches the dizzying heights of multimillion $ salaries whether the numbers become less important or not. How many here would love his (base) salary for just a year and then be happy to fall back to earth?
What drives these guys is power, prestige etc. if someone paid me $14,0000.00 in one year, I would retire and live off the interest ..... but that’s just me

I always remember the WA wonderkids of the 1980s.I remember Laurie Connell getting a $5 million bonus and thinking why is he still working.Even then I would have retired and ~ 1990 invested in the NSW Railways loan issue at 19% for 10 years.Unfortunately I only had a piddling amount to subscribe.

 

[trippin_the_rift]

I always remember the WA wonderkids of the 1980s.I remember Laurie Connell getting a $5 million bonus and thinking why is he still working.Even then I would have retired and ~ 1990 invested in the NSW Railways loan issue at 19% for 10 years.Unfortunately I only had a piddling amount to subscribe.

Because when you're good at something, it's never about the money...the boat...the next car.
Money chases you.

It's the feeling...the high...that folks in these positions crave. Financial abundance is a byproduct of the thing they're really chasing, which is the FEELING.

I think we've all had that feeling of pure satisfaction in our professional life at some point. AJ just has more of it. Simple!

 

[tgh]

This discussion reminds me of one of my bro_In_L's favourite er homilies…(paraphrased for relevance)

It's all mind over matter..

Aj doesn't mind because we don't mattter….

 

[kelvedon]

And here’s the response from Vanessa Hudson CFO of Qantas.

We have reshaped Qantas to put it on a stronger footing

In the past decade, Qantas has posted one loss and nine years of strong profits, including several record results. Our main domestic competitor has only had one year of profit in that time.

www.smh.com.au

 

[moa999]

Succinct response..
Would be interesting by comparison how much JB would have been paid had VAHs share price been at $2 rather than below 20c (was about 40c when QAN was at $1 in 2014)

 

[jpp42]

The cancellation rate in many months of above six per cent on our busiest domestic route, MEL - SYD and return, for QF flights is appalling. It isn't all due to weather.

I think you misunderstand something about how QF (and to some degree VA) operate this route in terms of schedule and cancellations. They essentially are scheduling enough flights to hit the maximum/peak demand that they can possibly accommodate with their fleet, crews, airport slots, etc. They don't really intend to operate all of these flights on every day. They make commercial decisions to cancel some and consolidate - they would prefer to run a single 90% full flight instead of two 45% full flights. If one was leaving at 5:30 and the next at 5:45, it will upset very few travelers to cancel the 5:30 and delay half of those people by 15 minutes. Because the frequency is so high, the delays due to cancellations are minimal and they get away with this practice from a customer satisfaction perspective.

The point is that this cancellation rate does not represent "poor management" or any kind of failing on the operational side (such as the fleet not being available due to maintenance or crew issues). It is entirely a deliberate practice to maximize profitability. Also, I believe this practice when it comes to the MEL-SYD route long predates Alan Joyce.

 

[ChrisFlyer]

A little spot of irony in the story that the union rep for the airline's engineering staff is complaining about the aircraft being too old.

Naturally, older aircraft require more maintenance, both by the way they were designed and by how much they've been used. Qantas having older planes literally keeps this union rep's members in a job (or more of them in a job). Portraying the average age of Qantas' fleet as "alarming" is also fear mongering. Unlike some airlines which just keep buying new planes with a seemingly endless source of capital, Qantas tends to fly theirs for around 20 years and refurbishes the cabins at around the half way point (as we've seen with the A330s, B737s, Dash 8s and now the A380s), and when those aircraft are owned by Qantas rather than leased, they've generally been fully depreciated and don't have ongoing lessor or repayment costs, which helps the airline financially, and again, supports the jobs of those who maintain them.

Let's also remember that this is the guy who said his union would "bake them slowly" (Qantas) back in 2011 before the airline ended up being grounded to resolve the dispute. His feelings about Joyce aren't just jealousy around his current pay packet or stockmarket gains: there's a long history there.

Would be interesting to read a reply from Alan Joyce to Steve's article!

 

[levelnine]

Qantas having older planes literally keeps this union rep's members in a job (or more of them in a job).

LOL what a terrible argument. On this twisted logic of yours, the union rep's members literally keep AJ in a job because without maintenance Qantas would have no aircraft to fly.

It is no secret that AJ hates the unions. He'd abolish them completely if he could. There's a long history there. So why is it any surprise that the unions have no love for AJ?

 

[Andz]

Yes if the strategy is cost cutting, which Qantas has been doing for the past few years. Time for a new strategy of rebuilding their reputation and this will require a new leader.

 

[Mrmaxwell]

As someone who flies internationally quite a bit it is frustrating when one delay on a completely seperate route to mine cascades through the entire network - this is due to maximum utilisation of each aircraft leaving no room for error.

A number of times I’ve been stuck in SYD when an aircraft has gone tech to be told ‘come back tomorrow’ - this is at their home base yet not a single spare aircraft to sub out unlike many other carriers. It seems many decisions see customer experience placed last.

 

[Limewood]

Alan Joyces financial success at Qantas is all due to massive write downs, redundancies and favourable fuel prices.
The only real feather he can put in his cap is influencing/enforcing social issue changes.

Could not have said it better, just imagine the Qantas state of affairs if fuel prices in particular had risen. Try and get someone on the phone wait half an hour+, look to book J international award flights, mostly see J short haul and Y long haul . He is CEO but it's a board that make decisions and his salary is ridiculous.

 

[dajop]

It seems many decisions see customer experience placed last.

QF has two things going for it - the emotional attachment, and don't forget the power of emotions to overcome the rational - and a strong enough QFF program. Other things, except safety, are less important. You only have to read AFF for a while to realise the hold QFF has over people, it's an excuse to forgive for all sorts of sins. That hold is only there because of the emotional attachment to the notion of the airline and the good feeling accruing FF point and/or status brings. With that power over individuals you can place the customer experience last. Yes, many leak away, but many come back and replace them. And VA are never going to challenge them on either front.

I've got a hunch many people think about QF in the way Churchill talked about democracy .....
"No one pretends that Qantas is perfect or all-wise. Indeed, it has been said that Qantas is the worst Airline except all those other airlines that have been tried from time to time."

 

[amaroo]

How much was JB paid over at VA? google search reports 2016 -$4.15m / 2017 - $6.5m / 2018 - $4.1M ..... do you think VA shareholders are happier than QF shareholders ?