Why is Alan Joyce still Qantas' CEO?

[anat0l]

I thought it would be very brave to try and broach this subject (I could be shot to pieces here), but here it goes....


As the title of the thread says.

Alan Joyce. A name which instantly stirs contempt on this board, and in many different circles.

Often on this forum he is jeered for his management of the airline, the ill-directed championing of Jetstar and general lack of dynamic, especially compared to the CEOs of both neighbouring and more successful airlines.

He's been installed in the top position for many years. He's still there.

He's very much hated. He's had death threats against him (and probably others not reported). He's been criticised repeatedly by business experts.

Politicians hate him. Passengers hate him. Various staff hate him (likely more than can be counted using limbs). Shareholders hate him. The Australian press hate him. Everyday Australians hate him. I'm thinking some dictators - both alive and dead - have better reputations amongst people than he does.

For some people - including on this forum - the man hasn't done a right thing for Qantas since day 0. It is often said that if Qantas has to do one thing right, it is to immediately dismiss this man.

But... after years of being subject to that kind of contempt, he is still the CEO. Why?


(Yes, I am aware of the immediate response, which is the corporates who own the most shares in the company and/or the remainder of the board seem to have more confidence in his "leadership" than what the popular opinion would make out to be. So.... as a related question, are we lighting the fire / shooting the right people?)

 

[medhead]

Beside corporate shareholders. There is also the board is not ready to admit they made a mistake in appointing him. To do so raises questions about their judgement.

 

[tgh]

Beside corporate shareholders. There is also the board is not ready to admit they made a mistake in appointing him. To do so raises questions about their judgement.

This has to be the nub.. an unfortunate confluence of a board with no.. er spheres..up to their eyeballs in mis-everything …..and a querulous ceo who lacks the courage to face up to reality and quit.
Soooo much goodwill has been urinated up against the wall.
I was recently using the qf/va model as another example of the way even big businesses fail… (a ceo scorned is a ceo to be feared) …. wotif another… great companies with great track records..wasting away

 

[AdMEL]

This has to be the nub.. an unfortunate confluence of a board with no.. er spheres..up to their eyeballs in mis-everything …..and a querulous ceo who lacks the courage to face up to reality and quit.
Soooo much goodwill has been urinated up against the wall.
I was recently using the qf/va model as another example of the way even big businesses fail… (a ceo scorned is a ceo to be feared) …. wotif another… great companies with great track records..wasting away

Slightly OT, but would you care to elaborate on VA and Wotif?

 

[elbarto]

And they put him on an ongoing contract. So it's not like they can say, when you're current contracts up, go join the dole queue.

http://www.asx.com.au/asxpdf/20081103/pdf/31dcp35dl59cd2.pdf

 

[Must...Fly!]

Because it's far easier for Joe Public and Joe Employee to hate the man than look at reality and hate the job he has to do.

 

[medhead]

Because it's far easier for Joe Public and Joe Employee to hate the man than look at reality and hate the job he has to do.

I disagree. The problem is not the job but how he's doing it. The problem is his management style. He has launched into outright war with his employees. On a number of occasions he has gone out in public and outright stated that the employees are destroying the business. For an iconic business, like qantas, that has many long term dedicated employees hearing that from the boss has to be morale destroying.

This is not to say he shouldn't do something to change work practices but the way he has done that is completely counter productive. He hasn't lead the workforce to change. Change is the job of the CEO and a good CEO can bring the employees along for the ride. Joyce hasn't. That's about him not his job.

There is also the failure to build an integrated business across the group.

 

[UP4014]

The Irish answer to Texas Air's Frank Lorenzo. :shock:

 

[Happy Trails]

Or, perhaps, like that apocryphal US Army major.
"It became necessary to destroy the airline in order to save it."

 

[ermen]

Actually, the big institutional investors are probably OK with his leadership and acknowledge the tough job he has in the circumstances.

 

[Major]

A look at the board itself shows a mix of mining engineers, legal and accounting experience as well as our next GG. They appear to be united in their continued support of AJ

Board of Directors | Qantas

This board obviously has faith in his leadership skills to continue as CEO

 

[Bofter]

And they put him on an ongoing contract. So it's not like they can say, when you're current contracts up, go join the dole queue.

http://www.asx.com.au/asxpdf/20081103/pdf/31dcp35dl59cd2.pdf

If my understanding is correct, there is a bit of a clanger in there. If Alan Joyce wants to quit, he notifies Qantas. If Qantas wants Alan to quit, it notifies itself

 

[craven morehead]

The problem is AJ is ex DeathStar and all he knows is LCC :mrgreen:

 

[fersea]

Interesting question. Whilst I don't have any major issue with him, he does seem to be a PR disaster for the company. I suspect though he is there to make major changes to the company and once is done he will probably move on (with a nice payout) and they will bring in a CEO that is seen as more popular with the punters but needed Joyce to do his dirty work first.

 

[THE TRIMMER]

If you read correctly on AJ.s qualifications on board of directors,he was in planning with Aer Lingus,Ansett,I wonder ????

 

[AirKat]

In a time when the only airlines that are financially stable seem to be those propped up by governments, I think he's done well.

Everyone brings up Virgin and how successful they've been, yet if you were a shareholder you would not agree and they can't say when they will return a profit. Yet it QF has financial results like Virgin, it is shouted from the rooftops as a result of poor management.

QF has to modernise and the management team are continually battling inefficient legacy practices and high Australian wage costs at every turn. Yet they don't operate in a domestic environment, even against Virgin they are competing with an international player.

I fly on average 4-6 flights a week, in the last 3 years I feel the change in everyday service standards and staff attitudes has been for the better.

A bit of a ramble, apologies.

 

[trippin_the_rift]

Maybe nobody else wants the job

 

[moa999]

I think Joyce has a very difficult job.

QF mainline - both QFi and QFd are dinosaurs and need change - this is undoubtedly going to involve staff dislocation, and this is going to be messy in a highly unionised company.
Similar to the car industry where Holden/Ford have been cutting staff numbers for over 20yrs, always in battles with the unions and public handouts from the govt, and look where that got it.

Borghetti got the easier job - take an LCC with a low cost base and move it up-market, all the time helped by shareholders who are happy to pump money into a loss making entity.

It always surprises my however that they employees in the industry with the best conditions (ie mostly QF mainline staff) seem the most disenfranchised, when the reality is they should be happy as larry, trying to ensure the gravy train continues.

That said I think Joyce has made some missteps in his time
- Not proactively fix the 747 issue by ordering 777s when it became clear the 787s were getting horribly delayed
- Announcing QAsia/RedQ way too early, then getting rebuked and failing to deliver
- Ordering the large Jetstar A320 order, then seemingly failing to grow quickly enough (the JHK planes stuck in france, and the JJ planes on Narita tarmac)
- Being way too late to match Virgin's coast to coast product and it still being almost a year off
- Buying back equity over the course of 2013 when it should have been obvious that due to added capacity,yield and profit would fall dramatically.

 

[lovestotravel]

The best part is currently the QF Group is paying Airbus to park JQ A320's that are not needed due to the JQ Asia failings....

Well done AJ

 

[moa999]

Lovestotravel,
I think it depends who is the lessee - if JQHK then Group only responsible for ~40% of the profit (and in this case loss)