Qantas boss Alan Joyce has announced he will step down early from his role after a nightmare week for the national carrier.
It comes as the airline has faced a wave of scrutiny in recent weeks over allegations it sold tickets for “ghost flights” and lobbied the federal government to reject Qatar Airways’ bid to increase flights to Australia.
In a statement the airline said: “Qantas Group CEO Alan Joyce has advised the board he will bring forward his retirement by two months to help the company accelerate its renewal.”
Vanessa Hudson will move into the role as managing director and group chief executive from September 6.
Mr Joyce said the events of the past weeks had made it clear the company needs to prioritise and “move ahead with its renewal”.
“The best thing I can do under these circumstances is to bring forward my retirement and hand over to Vanessa and the new management team now, knowing they will do an excellent job,” he said.
Nightmare week for Qantas
In a statement released just 24 hours ago, Qantas acknowledged that their service standards had fallen “well short” of expectations in recent times.
“We openly acknowledge that our service standards fell well short and we sincerely apologise,” a spokesman said.
“We have worked hard to fix them since and that work continues.”
The statement was a direct response to multiple allegations made by the Australian Competition and Consumer Commission including that the airline had advertised tickets for more than 8000 already-cancelled flights between May and July last year.
“The ACCC’s allegations come at a time when Qantas’s reputation has already been hit hard on several fronts,” the spokesman said.
“We want the community to know that we hear and understand their disappointment.
“We know it will take time to repair. And we are absolutely determined to do that.”
The consumer watchdog launched a lawsuit with the Federal Court last Thursday, with the airline facing a potential penalty of more than $250m.
They allege the airline continued to advertise and sell 8000 tickets for an average of two weeks and up to 47 days after flights had been cancelled.
It is further alleged customers with tickets on more than 10,000 flights scheduled to depart over a three-month period were not notified their flights had been cancelled for an average of 18 days, the watchdog alleges.
“The ACCC alleges that for about 70 per cent of cancelled flights, Qantas either continued to sell tickets for the flight on its website for two days or more or delayed informing existing ticketholders that their flight was cancelled for two days or more or both,” a spokesperson said last week.
Earlier this year, law firm Echo Law confirmed a class action was under way on behalf of customers whose flights were cancelled due to Covid-19 travel restrictions.
The firm alleges that Qantas customers were eligible for a full cash refund, but were instead given travel credits or vouchers.
PM coy on meetings with Joyce
Meanwhile, the government has been under pressure following revelations it knocked back Qatar Airways’ application to increase flights to Melbourne, Sydney and Brisbane.
Opposition Leader Peter Dutton has accused Anthony Albanese of a “sweetheart deal” with Mr Joyce in order to shield Qantas from greater competition.
The Prime Minister has repeatedly claimed he had “no lobbying” from the carrier on the issue.
When pressed further on Tuesday, Mr Albanese swatted away questions from the Coalition about whether he spoke with the outgoing chief.
“Did the Prime Minister have a conversation of any nature with Mr Alan Joyce prior to the government's decision?” Nationals MP Pat Conaghan asked.
Mr Albanese laughed and responded: “I can confirm that I’ve met Alan Joyce.”
Mr Albanese also confirmed he had conversations with Virgin Australia regarding the Qatar application.
Pressure mounts at senate hearing
A tense exchange at a senate committee hearing last week lead to the admission Qantas is holding $470m in travel credit owed to passengers who had flights cancelled because of Covid.
Mr Joyce said the $370m in outstanding travel credits Qantas previously revealed are solely Qantas bookings, and do not include Jetstar or overseas-based bookings.
Qantas said it would step up efforts to communicate with passengers and clear the travel credit by the end of the year.
During the same hearing, Mr Joyce faced a grilling over the airlines successful efforts to lobby the federal government out of increasing the capacity for Qatar Airways flights into capital cities.
He was also forced to confront allegations of “slot hoarding” in an effort to hold onto coveted take off and landing time at major airports.
He batted away the accusation at the time and claimed the airline had the lowest level of cancellations of any major carrier for 11 of the past 12 months.
The week before, Mr Joyce fronted the press to announce the airlines eye-watering $2.46 billion profit result for the last financial year.
It prompted renewed calls from the public for the airline to repay its $2.35 billion in government support it received during the pandemic to stay afloat.
Industry reacts to news
The Australian and International Pilots Association (AIPA) – which represents Qantas Group pilots – said they are “confident Qantas can be great once more.”
“The Spirit of Australia may be deflated, but it is not defeated and if we all work together, I'm confident Qantas can be great once more,” AIPA President Captain Tony Lucas said.
He said they trust Mr Joyce’s early departure is the “circuit breaker needed to allow Qantas to move forward”.
“There is much work to be done, however we trust that Ms Hudson recognises the power of respecting and valuing all Qantas staff and how that can play a significant role in the renewal of the airline”.
Meanwhile, Transport Workers Union National Secretary Michael Kaine has called into question a hefty multimillion-dollar package the departing chief executive is due to receive.
“Alan Joyce is slipping into retirement two months early with a $24 million pay packet, leaving one of the biggest messes in corporate Australia‘s history in his wake,” he said.
“After finally receiving the public scrutiny he deserves for trashing one of Australia’s' most cherished companies, Alan Joyce is exiting with a $10 million bonus, announced on Friday.
“This is a classic Joyce move: pretend to take responsibility while pocketing obscene amounts of money.”
The union has faced off with the airline on numerous occasions since 15,000 staff were laid off on placed on forced leave in mid-2021.
Joyce hangs up boots early
Mr Joyce’s early retirement marks an abrupt end to his 15 years in the top job and 22 years with the company.
“There is a lot I am proud of over my 22 years at Qantas, “ he said.
“There have been many ups and downs, and there is clearly much work still to be done, especially to make sure we always deliver for our customers. But I leave knowing that the company is fundamentally strong and has a bright future.”
Qantas Chairman Richard Goyder commended the outgoing chief executive on putting “the best interests of Qantas front and centre”.
“We sincerely thank him for his leadership through some enormous challenges and for thinking well-ahead on opportunities like ultra long-haul travel,” he said.
Mr Goyder admitted it comes at “challenging time” for the airline as the company works to restore the public confidence.
“We have an important job to do in restoring the public’s confidence in the kind of company we are, and that’s what the Board is focused on, and what the management under Vanessa’s leadership will do,” he said.
The fast-tracked succession plan also brings forward the appointment of Rob Marcolina to fill the vacant role of chief financial officer as Ms Hudson steps up into the top job.
Shareholders will formally vote on the appointment of Vanessa Hudson as Managing Director at Qantas’ Annual General Meeting in November.
Mr Joyce announced his retirement back in May and was due to see out his role until November.