QANTAS crash: How Alan Joyce lost a $9 million bonus

From Schwartz Media. I'm Ruby Jones. This is seven am. Alan Joyce was once hailed as a savior of one of Australia's most beloved icons. The former CEO of Quantus was championed by his board and well known in the Australian business community for his supportive social justice causes during his fifteen years in the job. So it's been a

I know it's never going to be a great day when you find out you're not getting nine million dollars you thought was coming your way, But he's going to be okay. Initially his bonus was going to be worth something like sixteen million dollars, and the amount that they brought back is a little bit more than nine million dollars. I think he made something north of one hundred million dollars out.

Of Quantis during his fifteen years there.

So he does have some money left over in this whole process, and we should keep that in mind.

He's not going to go brook anytime soon.

Right, So Mark, when did things begin to go wrong for Joyce?

So the place to start really is in May last year. That's when Joyce announced that he was going to be leaving Quantus after fifteen years as its chief executive. And initially his plan was that he was going to be leaving in November, So we're talking about November of twenty twenty three, and he was going to be handing over to Vanessa Hudson, who was at the time the chief financial officer.

Of the company. That June, he got.

Special permission from the board to sell almost all of his shares in the company. It wasn't too scandalous, it wasn't the sort of thing that nobody ever does, but it does become a little bit more interesting later. This show sell now in August, two things happen, kind of right on top of each other. The first thing that happens is that company announces its profit for twenty twenty three will be about two and a half billion dollars, which is the largest profit Quantus's ever booked.

A record profit for quantas will put more aeroplanes back in the sky.

At one point four to three billion Azzie dollars. That's about nine hundred and fifty million yures, just shy of expectation.

A record half yearly profit, the first the airline has recorded after seven billion dollars in losses during COVID.

This is coming after a couple of pretty tough years.

Twenty twenty one and twenty twenty two were not great years for airlines.

Prices skyrocketed, staff were cut to the bone, and so this massive profit in twenty twenty three, to some it felt a little bit like a company that was robbing from its workers and its customers to pay out its investors and its executives.

This profit is dirty money. It's been reaped off the back of exploiting labor hire loopholes, illegally sacking workers, making customers and taxpayers feel ripped off.

Now, the other thing that had happens in August is that the Australian Competition and Consumer Commission announces that it's got this suit that it's going to bring in the Federal Court.

We've just had word through confirmation from the a Triple C Virus statement that it has launched legal action in the Federal Court alleging that Quantus engaged in false, misleading and deceptive conduct.

By Acts and the suitor letters that Quantus sold tickets to place that it had already canceled when it sold the tickets.

So selling tickets on flights that have already been canceled eight thousand scheduled flights between May and June and twenty twenty two, and the Quantus kept on selling them for an average of two weeks after it knew internally that those flights were never going to leave the ground and then delayed.

In August in twenty twenty three, when this news becomes public, that's the final straw for Joyce. He announces that he's going to bring forth the November Archer that he had

Okay, So Quantus's problems began with the pandemic, but really just got worse over the next few years, and eventually shareholders had enough they commissioned a review into what's happening at the company. So tell me about that review.

Yeah, so this review really came about after a shareholder revolt when the company announced its last financial results. What it found was that it puts Joyce right at the middle of many problems going on at the airline, and it really blames the board for having put too much faith in Joyce.

Now Joyce had been that fifteen years.

He had been a stall worked at the airline and really a prominent.

Businessman in the Australian landscape.

So the review said the Quantas had a command and control leadership.

Style operating inside of it.

A lot of the decision making just highly centralized in Joyce and that made it difficult for people to speak up whenever bad things were happening. The review makes thirty two recommendations, including changes to executive pay and ways that communications are.

Done with stakeholders, and those are really typical.

Sorts of recommendations that you get whenever these sorts of reviews are conducted.

Directors who are on the board.

They'll get a thirty three percent cut to their base pay this year, so there are some repercussions that are to be felt at the board level. But really the review says that the primary failure was that there was just too much power sitting in Alan Joyce's office.

So can Quantus repair its reputation as the national airline that's after the break? So mark Quantus. It is one of Australia's most iconic companies, but as you say, its reputation has taken several hits over the past few years and especially in the last twelve months. A review has now placed blame squarely for that on the former CEO, Alan Joyce, So he's left the company with a reduced payout.

What is the.

Plan now for Quantus to try and win back the trust of people in Australia.

The new board is taking a very different direction to the one that was charted under Richard Gord and Alan Joyce. I think it's fair to say that Alan Joyce really put his personality on this airline.

As a gay ARJ man running this amazing company. I'm also very passionate about LGBT diversity within the group.

He spearheaded a number of campaigns at the airline that sided with progressive politics.

This is an amazing country. I came to Australia in nineteen ninety six.

As a gay man and a very out and vocal gay man. He gave those campaigns a sort of personal legitimacy that could be identified with him.

It was still illegal to be gay in Ireland. Homosexuality was illegal. I left that country, came here, and I always thought Australia was one of the most amazing open places.

To be The new board has said that they like those campaigns may have been a misstep, and the new chief executive has not been yet such a public figure associating her personality with the brand. Vanessa Hudson is an accountant. She was the chief financial officer before Alan Joyce departed, and so far the way that she's run the business seems to be, for lack of a better term, much more business like.

A few people know their way around the flying Kangaroo. As well as Vanessa Hudson, she's managed in flight services, commercial planning, sales distribution, even catering and the lounges.

The board is asserting that the social justice direction of the company is not going to be such a large part of their branding, and it sounds like what they want to do is just to repair the core relationships that they have between them and their customers and their regulators. Really seems like down to brass tax kind of business approach.

My focus when I step into the role in November is going to be focused on delivering for our customers, delivering for our people and also shareholders in the communities we serve.

I suppose the other way of looking at this, though, is to question how important trust and reputation really is for a company like Quantus given the state of the airline market in Australia and the dominance that Quantus has. I mean, does it matter if people don't like Quantus because they're going to have to use them anyway.

Yeah, that is an interesting question, and certainly Quantus is trying its very best to maintain that position for itself. We have had, of course, Regional Express going under, We've had the Bonds Airline going under, and we've also had this additional aspect of this story that was happening in concert with the Hriplec's investigations and with Alan Joyce stepping down.

It is quite a fall from grace, isn't it, For Alan Joyce but also for the entire company. When you think about the goodwill that Quantus used to have, I mean some of it was marketing the famous I Saw Australia Home song, but I remember flying Quantus as a kid and it did feel special hearing the Australian accents and experiencing that Australian friendliness after being away. They used to be something in it.

Absolutely, the fall from grace has been remarkable, and I think that there is a sense that the company has that they can regain that position, but it's really up to the customers whether they can return to that place in the Australian psyche. And I think even if we just go back to say the campaign for marriage equality or the campaign for the Yes vote on the Voice referendum, there was a sense that Quantus had an affirmative space

Mark, thank you so much for vir Tank.

Thank you very much.

Also in the news today, Prime Minister Anthony Albanesi has met with Indonesia's incoming president Praboo Subianto in Canberra. The two leaders have finalized negotiations on a new defense still but do not give any specific details. In the coming days, the Australian Defense Minister Richard Miles is expected to travel to Indonesia to sign the agreement. And The twenty twenty four Democratic National Convention is underway in the United States.