Qantas chief Alan Joyce steps down early as airline’s reputation slides

Stay up-to-date with the latest updates from Qantas Airways Ltd completely free of charge.

You will receive a daily email called myFT Daily Digest that will summarize the latest news about Qantas Airways Ltd every morning.

Alan Joyce is set to resign ahead of schedule as the CEO of Qantas, an Australian airline. This decision comes as the company strives to recover from a string of controversies, such as the sale of tickets for numerous flights that were already canceled.

Joyce has been at the helm of Qantas for a decade and a half and wanted to step down while the company was thriving. The airline, famously known as the "Flying Kangaroo," recently announced its highest ever yearly profit. Joyce had implemented strategies to revamp its aircraft fleet, utilizing the money saved from cost-cutting measures which have significantly improved the company's financial position.

However, he accelerated his intended retirement by two months due to a chain of controversies that have negatively impacted the airline's image.

Joyce stated in a formal declaration that he would pass on authority to his successor, Vanessa Hudson, on Wednesday. He further expressed that recent happenings have highlighted the importance of "renewal" for the company. Considering the current circumstances, he believes the most advantageous course of action is to expedite his retirement.

The Australian consumer protection agency filed a lawsuit against the airline recently for purportedly marketing tickets for 8,000 flights that had already been terminated and neglecting to notify passengers about the need to reschedule 10,000 flights until the eleventh hour.

If proven culpable, the airline may be subject to a hefty penalty amounting to hundreds of millions of dollars.

Qantas was forced to backtrack on its decision to annul over A$500mn ($321mn) worth of customer credits associated with Covid-19 grounded flights, following legal action against this measure.

The airline has additionally become embroiled in a political controversy as Joyce testified during a Senate investigation. He disclosed that he had corresponded with the government, advocating against granting Qatar Airways permission to increase their number of flights to Australia. According to Joyce, such a move would disrupt the market during a crucial period of rejuvenation for the aviation sector post-Covid-19.

As a result, other airlines and travel agencies alleged that the government was favoring the national carrier. Prime Minister Anthony Albanese, however, refuted claims of being influenced by Qantas CEO regarding the matter concerning Qatar Airways.

Qantas is facing demands from shareholder groups and unions to decrease the bonuses and share rewards given to Joyce, who sold shares worth A$17mn in June. Recently, he obtained nearly A$11mn worth of shares through the company's bonus scheme.

This has angered investors, including superannuation funds. Rachel Waterhouse, CEO of the Australian Shareholders' Association, which represents individual investors, stated that there is mounting pressure on the company's board, headed by chair Richard Goyder, to lower the bonuses for Joyce and other top-level employees due to the legal troubles that have harmed the company's standing.

Michael Keane, the national secretary of the Transport Workers Union, who has clashed with Joyce throughout his extensive tenure, suggested that the chief executive should forfeit his bonus. "This is a typical move by Joyce: pretending to accept responsibility while greedily pocketing exorbitant sums of money," he expressed in a written statement.

Qantas declined to provide any information regarding the potential review of Joyce's salary. The company is scheduled to unveil information regarding bonuses by the conclusion of this month.

Joyce, who began his professional journey at Aer Lingus before moving to Australia in the early 2000s, is recognized as one of the top business leaders in Australia. Investors have commended him for his outstanding efforts in revamping the airline's financial situation, cutting down expenses, and rescuing the company from potential downfall amidst the pandemic.

Nevertheless, his actions have caused a division in public opinion as the airline's once renowned reputation for top-notch customer service has declined significantly. The term "Joyced" was embraced by Australians in the past year as a way to convey the plight of being abandoned at an airport.