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Business & Finance

Qantas chief lashed for fleet grounding comments

Published Updated

alan-joyceSYDNEY: Qantas chief Alan Joyce faced an angry backlash Monday after saying a fleet grounding he ordered last year was "positive for the brand", with pilots calling his comments "bizarre and worrying".

 

Joyce pulled all the airline's planes across the world out of the skies for 48 hours last October as part of a protracted labour row with staff over plans to shift the focus of its ailing international arm to Asia.

The grounding followed unions representing pilots, engineers and ground staff repeatedly walking off the job, accusing Irish-born Joyce of attempting to "Asianise" Qantas and outsource jobs in the name of profit.

The dispute was ultimately terminated by an order of the country's industrial relations umpire and cost Qantas Aus$194 million (US$208 million), but Joyce said it had been a good move.

"I think it has ended up being positive for the brand," he told The Australian newspaper, which Monday named him the country's most influential business person, ahead of BHP's Marius Kloppers and ANZ Bank chief Mike Smith.

"In the few months up to the grounding we were being massively disrupted by the unions. We were finding it hard to have a reliable schedule and the business community had left Qantas.

"But after we brought the dispute to a head... we saw an immediate and rapid response of forward booking because certainty was brought back. The days after the grounding I was inundated with emails, 90 percent of them positive."

The Australian and International Pilots Association (AIPA) described the remarks as "bizarre and worrying".

It said the move, which stranded tens of thousands of people around the world, had caused the airline "catastrophic brand damage".

"Any polling and basic common sense will tell you that when a Qantas CEO spontaneously grounds the entire fleet without good reason... it is going to hurt Qantas's reputation," said AIPA president Captain Barry Jackson.

"Yet Mr Joyce thinks overall it has improved the brand and that's incredibly worrying."

Jackson said Qantas needed to focus on repairing the brand damage.

"Qantas pilots want nothing more than to help repair the catastrophic damage done last year by our CEO's decision," he said.

"Yet Mr Joyce seems to genuinely believe that the back-slapping he's received from some other CEOs is somehow representative of the flying public. He is completely wrong."

Joyce insists he will push ahead with his plans to revamp Qantas, which hinges on the establishment of budget carrier Jetstar Japan and a second Asia-based joint-venture premium airline.

He accused "bullying" unions of trying to unwind measures that have made Australia an open economy, and warned that any protectionist push could lead to more corporate failures and job losses.

"Some of the union movement in this country do not realise how open the world has become, how global we've become, how competitive it's become," he told the newspaper.

"There is this view I think out there by some of them that somehow we can go back to the pre-liberalisation and protectionism -- put back in protectionism, protect industries. We know that's not the case."

Qantas releases its half-yearly results on Thursday. Last month, Moody's lowered the airline's long-term senior unsecured rating to Baa3 from Baa2 with a stable outlook, partly due to higher fuel prices.

 

Copyright AFP (Agence France-Presse), 2012

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