By Mick Le Moignan
Australians have had a life-long love affair with Qantas, the national flag-carrier, with its iconic flying kangaroo – but in recent years, the airline has fallen into the hands of people who have tarnished this image. It has now been found guilty of being flagrantly unfaithful to its traditional high standards of behaviour.
For decades, Qantas’s impeccable passenger safety record and its reputation for friendly service on board and excellent staff relations was a source of national pride. Founded in 1920 as Queensland and Northern Territory Aerial Services and named after that acronym, it is (after KLM) the oldest continuously operating airline in the world.
It was nationalised by Labour PM Ben Chifley in 1947 and privatised by another Labour PM, Paul Keating, in the 1990s, with the proviso that at least 51% of its shares should be Australian-owned.
The only airline to fly to all seven continents, its domestic marketing has long relied on unashamedly sentimental patriotism.
Popular campaigns have featured large choirs of Australian children singing in red-desert locations. In the 1980s, aerial views of Sydney Harbour and the Opera House, accompanied by Peter Allen singing I Still Call Australia Home, brought tears to many a masculine cheek. The airline’s current slogan is, ironically, in view of recent revelations, ‘‘the Spirit of Australia’’.
The Qantas CEO since 2008 has been Alan Joyce, an Irishman who migrated to Australia at the age of 30, after an initial career with Aer Lingus. He resigned strategically, two months early, on 5 September, after an uncomfortable grilling in the Australian Senate unearthed widespread inappropriate business practices committed on his watch.
Joyce was initially popular with share-holders for maximising profits and negotiating hard with unions, but recently, the Federal Court found against him in a landmark case, which will lead to massive fines and compensation payments to unfairly treated Qantas workers. Regulatory bodies including the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investment Commission (ASIC) are in hot pursuit of Qantas for other serious offences.
One of the keys to Joyce’s power was his adroit handling of access to Qantas’s celebrated ‘‘Chairman’s Lounges’’ at airports all over the world. In these luxurious, privileged hideaways, members are extravagantly fed and watered at no expense to themselves, greatly easing the discomfort and inconvenience of long- or short-distance flying.
Joyce’s famous ‘‘soft diplomacy’’ involved extending membership to almost all members of State and Federal Parliaments, business leaders and even (as revealed by The Guardian on Thursday) five of the seven ACCC commissioners and the chair and both deputy chairs of ASIC.
Membership of ‘‘Australia’s most exclusive club’’ is (or was) confidential and by invitation only. Resignations are said to be coming thick and fast – but a little too late to avoid the flak, which has already hit the fan.
When Covid struck in 2020, Qantas laid off 1,700 baggage handlers, cleaners and ground staff instead of using generous government support to keep them employed.
During the pandemic, the Morrison government paid Qantas a staggering $2.7 billion in support, $900 million of which came from the ‘‘JobKeeper’’ scheme.
Late last month, Qantas declared a record annual pre-tax profit of $2.47 billion, but has not returned any of the government subsidies it received.
After the resumption of air travel, the airline did not re-employ its workers, choosing instead to cut costs by outsourcing the work to labour hire agencies and contractors.
The Transport Workers’ Union took Qantas to the High Court, which found it in breach of the Fair Work Act. Qantas appealed, but the decision was upheld in 2022 and again on Wednesday.
Qantas has now accepted the decision and apologised to the staff, but the court has yet to assess compensation, which could be hundreds of millions of dollars.
The second complaint is that the airline set 31 December as a cut-off date, after which it proposed to keep $570 million received from its customers for flights cancelled during the pandemic. Indeed, at the Senate inquiry in August, Alan Joyce claimed the sum was $370 million.
When The Financial Review revealed that a further $100 million had been received by Qantas’ wholly owned subsidiary, Jetstar, and not refunded, and that a similar sum was owed to overseas clients, Senators from all parties were outraged and indignant.
The airline’s issues do not end there. After the pandemic, Qantas sold tickets for 8,000 flights which, allegedly, it always intended to cancel. Scheduling them was a device to prevent their competitors offering similar services. The ACCC is suing Qantas for deceptive conduct.
The hardship suffered by loyal staff and customers appears not to have affected Qantas’s senior management.
Joyce ran a ‘‘tight ship’’, reducing staff by one-third since 2010, from 37,500 to less than 25,000 today, but his own salary and bonuses remained extraordinarily generous, with a retirement package of $21.4 million in cash and shares declared in Qantas’s annual report.
As recently as June, he sold $17 million of shares into a Qantas ‘‘buyback’’ scheme, in order to purchase a $9 million apartment next door to the apartment he already owns at the Rocks, in Sydney, overlooking the Opera House.
Qantas chairman Richard Goyder has spoken of ‘‘clawback’’ provisions which could be used to reduce Joyce’s final payout by up to $14.4 million. But Goyder and his fellow-directors have also collected hefty pay rises and are likely to come under heavy fire from corporate shareholders, disappointed to see their record profits spent on court costs, fines and compensation for staff and customers.
The new CEO, Vanessa Hudson, who has worked at Qantas for almost 30 years, latterly as Joyce’s CFO, has apologised for the mess, but she may find it difficult to separate herself from the outgoing regime.
Perhaps Qantas should rebrand itself and replace the flying kangaroo with a great white shark.
