Speaker 1: From Schwartz Media. I'm Ruby Jones. This is seven am.
Speaker 1: Alan Joyce was once hailed as a savior of one
Speaker 1: of Australia's most beloved icons. The former CEO of Quantus
Speaker 1: was championed by his board and well known in the
Speaker 1: Australian business community for his supportive social justice causes during
Speaker 1: his fifteen years in the job. So it's been a
Speaker 1: dramatic fall from grace. Alan Joyce has now left his
Speaker 1: successes with a reputational mess after a series of bad
Speaker 1: decisions that left customers furious, and has had his bonus
Speaker 1: cut by millions. Today reporter Mark Montcrief on what Joyce
Speaker 1: did wrong and whether his punishment will do anything to
Speaker 1: rebuild Australia's trust in Quantus. It's Wednesday, August twenty one.
Speaker 1: So Mark, there was this headline in the Daily Mail
Speaker 1: last week that read the face of a man who
Speaker 1: just lost his nine million dollar bonus, and there were
Speaker 1: these photos of Alan Joyce, the former CEO of Quantus,
Speaker 1: looking pretty dejected. So can you put that nine million
Speaker 1: dollars in perspective for me?
Speaker 2: I know it's never going to be a great day
Speaker 2: when you find out you're not getting nine million dollars
Speaker 2: you thought was coming your way, But he's going to
Speaker 2: be okay. Initially his bonus was going to be worth
Speaker 2: something like sixteen million dollars, and the amount that they
Speaker 2: brought back is a little bit more than nine million dollars.
Speaker 2: I think he made something north of one hundred million
Speaker 2: dollars out.
Speaker 3: Of Quantis during his fifteen years there.
Speaker 2: So he does have some money left over in this
Speaker 2: whole process, and we should keep that in mind.
Speaker 3: He's not going to go brook anytime soon.
Speaker 1: Right, So Mark, when did things begin to go wrong
Speaker 1: for Joyce?
Speaker 2: So the place to start really is in May last year.
Speaker 2: That's when Joyce announced that he was going to be
Speaker 2: leaving Quantus after fifteen years as its chief executive. And
Speaker 2: initially his plan was that he was going to be
Speaker 2: leaving in November, So we're talking about November of twenty
Speaker 2: twenty three, and he was going to be handing over
Speaker 2: to Vanessa Hudson, who was at the time the chief
Speaker 2: financial officer.
Speaker 3: Of the company. That June, he got.
Speaker 2: Special permission from the board to sell almost all of
Speaker 2: his shares in the company. It wasn't too scandalous, it
Speaker 2: wasn't the sort of thing that nobody ever does, but
Speaker 2: it does become a little bit more interesting later. This
Speaker 2: show sell now in August, two things happen, kind of
Speaker 2: right on top of each other. The first thing that
Speaker 2: happens is that company announces its profit for twenty twenty
Speaker 2: three will be about two and a half billion dollars,
Speaker 2: which is the largest profit Quantus's ever booked.
Speaker 4: A record profit for quantas will put more aeroplanes back
Speaker 4: in the sky.
Speaker 5: At one point four to three billion Azzie dollars. That's
Speaker 5: about nine hundred and fifty million yures, just shy of expectation.
Speaker 6: A record half yearly profit, the first the airline has
Speaker 6: recorded after seven billion dollars in losses during COVID.
Speaker 2: This is coming after a couple of pretty tough years.
Speaker 3: Twenty twenty one and twenty twenty two were not great
Speaker 3: years for airlines.
Speaker 2: Prices skyrocketed, staff were cut to the bone, and so
Speaker 2: this massive profit in twenty twenty three, to some it
Speaker 2: felt a little bit like a company that was robbing
Speaker 2: from its workers and its customers to pay out its
Speaker 2: investors and its executives.
Speaker 4: This profit is dirty money. It's been reaped off the
Speaker 4: back of exploiting labor hire loopholes, illegally sacking workers, making
Speaker 4: customers and taxpayers feel ripped off.
Speaker 2: Now, the other thing that had happens in August is
Speaker 2: that the Australian Competition and Consumer Commission announces that it's
Speaker 2: got this suit that it's going to bring in the
Speaker 2: Federal Court.
Speaker 7: We've just had word through confirmation from the a Triple
Speaker 7: C Virus statement that it has launched legal action in
Speaker 7: the Federal Court alleging that Quantus engaged in false, misleading
Speaker 7: and deceptive conduct.
Speaker 2: By Acts and the suitor letters that Quantus sold tickets
Speaker 2: to place that it had already canceled when it sold
Speaker 2: the tickets.
Speaker 5: So selling tickets on flights that have already been canceled
Speaker 5: eight thousand scheduled flights between May and June and twenty
Speaker 5: twenty two, and the Quantus kept on selling them for
Speaker 5: an average of two weeks after it knew internally that
Speaker 5: those flights were never going to leave the ground and
Speaker 5: then delayed.
Speaker 2: In August in twenty twenty three, when this news becomes public,
Speaker 2: that's the final straw for Joyce. He announces that he's
Speaker 2: going to bring forth the November Archer that he had
Speaker 2: already planned by two months. And this is when that
Speaker 2: share sale starts to become interesting to people, because it
Speaker 2: turns out when he sold those shares, the company already
Speaker 2: knew that it was under investigation by the atriple C.
Speaker 2: In retrospect, that share sale looks really bad and feels
Speaker 2: really bad for other investors because it turns out that
Speaker 2: that share sale was allowed to happen at a peak
Speaker 2: in the market.
Speaker 1: Okay, So Quantus's problems began with the pandemic, but really
Speaker 1: just got worse over the next few years, and eventually
Speaker 1: shareholders had enough they commissioned a review into what's happening
Speaker 1: at the company. So tell me about that review.
Speaker 2: Yeah, so this review really came about after a shareholder
Speaker 2: revolt when the company announced its last financial results. What
Speaker 2: it found was that it puts Joyce right at the
Speaker 2: middle of many problems going on at the airline, and
Speaker 2: it really blames the board for having put too much
Speaker 2: faith in Joyce.
Speaker 3: Now Joyce had been that fifteen years.
Speaker 2: He had been a stall worked at the airline and
Speaker 2: really a prominent.
Speaker 3: Businessman in the Australian landscape.
Speaker 2: So the review said the Quantas had a command and
Speaker 2: control leadership.
Speaker 3: Style operating inside of it.
Speaker 2: A lot of the decision making just highly centralized in
Speaker 2: Joyce and that made it difficult for people to speak
Speaker 2: up whenever bad things were happening. The review makes thirty
Speaker 2: two recommendations, including changes to executive pay and ways that
Speaker 2: communications are.
Speaker 3: Done with stakeholders, and those are really typical.
Speaker 2: Sorts of recommendations that you get whenever these sorts of
Speaker 2: reviews are conducted.
Speaker 3: Directors who are on the board.
Speaker 2: They'll get a thirty three percent cut to their base
Speaker 2: pay this year, so there are some repercussions that are
Speaker 2: to be felt at the board level. But really the
Speaker 2: review says that the primary failure was that there was
Speaker 2: just too much power sitting in Alan Joyce's office.
Speaker 1: So can Quantus repair its reputation as the national airline
Speaker 1: that's after the break? So mark Quantus. It is one
Speaker 1: of Australia's most iconic companies, but as you say, its
Speaker 1: reputation has taken several hits over the past few years
Speaker 1: and especially in the last twelve months. A review has
Speaker 1: now placed blame squarely for that on the former CEO,
Speaker 1: Alan Joyce, So he's left the company with a reduced payout.
Speaker 3: What is the.
Speaker 1: Plan now for Quantus to try and win back the
Speaker 1: trust of people in Australia.
Speaker 2: The new board is taking a very different direction to
Speaker 2: the one that was charted under Richard Gord and Alan Joyce.
Speaker 2: I think it's fair to say that Alan Joyce really
Speaker 2: put his personality on this airline.
Speaker 8: As a gay ARJ man running this amazing company. I'm
Speaker 8: also very passionate about LGBT diversity within the group.
Speaker 2: He spearheaded a number of campaigns at the airline that
Speaker 2: sided with progressive politics.
Speaker 8: This is an amazing country. I came to Australia in
Speaker 8: nineteen ninety six.
Speaker 2: As a gay man and a very out and vocal
Speaker 2: gay man. He gave those campaigns a sort of personal
Speaker 2: legitimacy that could be identified with him.
Speaker 8: It was still illegal to be gay in Ireland. Homosexuality
Speaker 8: was illegal. I left that country, came here, and I
Speaker 8: always thought Australia was one of the most amazing open places.
Speaker 2: To be The new board has said that they like
Speaker 2: those campaigns may have been a misstep, and the new
Speaker 2: chief executive has not been yet such a public figure
Speaker 2: associating her personality with the brand. Vanessa Hudson is an accountant.
Speaker 2: She was the chief financial officer before Alan Joyce departed,
Speaker 2: and so far the way that she's run the business
Speaker 2: seems to be, for lack of a better term, much
Speaker 2: more business like.
Speaker 6: A few people know their way around the flying Kangaroo.
Speaker 6: As well as Vanessa Hudson, she's managed in flight services,
Speaker 6: commercial planning, sales distribution, even catering and the lounges.
Speaker 2: The board is asserting that the social justice direction of
Speaker 2: the company is not going to be such a large
Speaker 2: part of their branding, and it sounds like what they
Speaker 2: want to do is just to repair the core relationships
Speaker 2: that they have between them and their customers and their regulators.
Speaker 2: Really seems like down to brass tax kind of business approach.
Speaker 9: My focus when I step into the role in November
Speaker 9: is going to be focused on delivering for our customers,
Speaker 9: delivering for our people and also shareholders in the communities
Speaker 9: we serve.
Speaker 1: I suppose the other way of looking at this, though,
Speaker 1: is to question how important trust and reputation really is
Speaker 1: for a company like Quantus given the state of the
Speaker 1: airline market in Australia and the dominance that Quantus has.
Speaker 1: I mean, does it matter if people don't like Quantus
Speaker 1: because they're going to have to use them anyway.
Speaker 2: Yeah, that is an interesting question, and certainly Quantus is
Speaker 2: trying its very best to maintain that position for itself.
Speaker 2: We have had, of course, Regional Express going under, We've
Speaker 2: had the Bonds Airline going under, and we've also had
Speaker 2: this additional aspect of this story that was happening in
Speaker 2: concert with the Hriplec's investigations and with Alan Joyce stepping down.
Speaker 2: Qatar Eras was trying to increase its presence in Australia,
Speaker 2: and Quantas advocated very strongly with the Albanesi government to
Speaker 2: reject that push, and the Albanesi government did just that.
Speaker 2: So there is certainly a lot of work being done
Speaker 2: by Quantas to keep its position atop the Australian aviation industry.
Speaker 2: Whether or not it's able to do that and rebuild
Speaker 2: its reputation with its customers, that's a balancing act that's
Speaker 2: going to be one that we should be watching over
Speaker 2: the next couple of years.
Speaker 1: It is quite a fall from grace, isn't it, For
Speaker 1: Alan Joyce but also for the entire company. When you
Speaker 1: think about the goodwill that Quantus used to have, I
Speaker 1: mean some of it was marketing the famous I Saw
Speaker 1: Australia Home song, but I remember flying Quantus as a
Speaker 1: kid and it did feel special hearing the Australian accents
Speaker 1: and experiencing that Australian friendliness after being away. They used
Speaker 1: to be something in it.
Speaker 2: Absolutely, the fall from grace has been remarkable, and I
Speaker 2: think that there is a sense that the company has
Speaker 2: that they can regain that position, but it's really up
Speaker 2: to the customers whether they can return to that place
Speaker 2: in the Australian psyche. And I think even if we
Speaker 2: just go back to say the campaign for marriage equality
Speaker 2: or the campaign for the Yes vote on the Voice referendum,
Speaker 2: there was a sense that Quantus had an affirmative space
Speaker 2: inside the Australian culture and the Australian policy debate. And
Speaker 2: I think people felt after the pandemic that Quantus didn't
Speaker 2: regain that position, points wasn't in that cultural role of
Speaker 2: being four Australians in the way that they had before.
Speaker 2: So it has been a really extraordinary dissent reputationally, but
Speaker 2: I think that they are squarely focused on repairing that relationship.
Speaker 1: Mark, thank you so much for vir Tank.
Speaker 3: Thank you very much.
Speaker 1: Also in the news today, Prime Minister Anthony Albanesi has
Speaker 1: met with Indonesia's incoming president Praboo Subianto in Canberra. The
Speaker 1: two leaders have finalized negotiations on a new defense still
Speaker 1: but do not give any specific details. In the coming days,
Speaker 1: the Australian Defense Minister Richard Miles is expected to travel
Speaker 1: to Indonesia to sign the agreement. And The twenty twenty
Speaker 1: four Democratic National Convention is underway in the United States.
Speaker 1: The first day included speeches from current President Joe Biden
Speaker 1: and Hillary Clinton. Hillary Clinton used her speech to highlight
Speaker 1: Donald Trump's thirty four felony convictions, as the crowd chanted
Speaker 1: lock him up. The event will run until August twenty two.
Speaker 1: If you enjoyed today's episode, we would appreciate you sharing it.
Speaker 1: I'm Ruby Jones. This is seven am.