When Alan Joyce wakes up every morning, there is always the slim chance that several hundred people travelling in a metal tube branded with the Qantas insignia will have plummeted thousands of feet to their doom.
The CEOs of the Big Four Banks don’t have that problem. They fear falls of a less lethal kind. Wall Street plunges don’t kill. And unlike plane wrecks, there is always the chance of a rebound.
This might seem a dramatically ghoulish way to portray the inherent risks of two fundamentally different businesses, but it’s worth considering in light of Qantas’s paltry net profit of $43 million in the six months to December. Compare that to the $3 billion or so of the major banks and it’s like a Cessna to an A380.
Who’d run an airline, eh?
Here’s another way of looking at that $43 million profit. It’s just 1.2 per cent of Qantas’s estimated market value of $3.6 billion.
That’s an awful lot of metal in the air, PR nightmares, kids standing on the edge of cliffs in penguin suits singing old Peter Allen tunes, Neil Perry recipes and ongoing stoushes with the unions for not a whole lot of profit.
Little wonder then that Qantas chief Alan Joyce was all blue sky and big picture while announcing 500 job cuts today. He had to be. His entire management strategy is based on short term pain for long term gain. As he said about a dozen times, he is making tough decisions now to ensure that Qantas continues to employ tens of thousands of Australians in the future.
Joyce was canny today. He quoted both Finance Minister Penny Wong and Financial Services Minister Bill Shorten on the toughness of the current economic environment. His clever inference was that if the party of the Union movement recognises it’s tough out there, then so should the unions themselves.
Joyce also emphasised and re-emphasised his main bullet point that “no maintenance jobs” would go offshore. That was his attempt to downplay the fact that at least 500 maintenance jobs, and possibly many more, would be cut.
There is sound reason to cull the maintenance jobs. Qantas employs around 1400 heavy maintenance staff at three such facilities, at Tullamarine, Avalon and Brisbane. But with the modernisation of his fleet, less heavy maintenance is required. With the recent technical problems aboard Qantas planes, news of new planes and the retirement of several ageing 747s should be welcomed. Yet for Joyce, the headlines will be all about job cuts.
Who’d run an airline, eh?
Alan Joyce isn’t paid to be likeable. And he’s not, when he’s saying statements like this in relation to last October’s fleet grounding:
“The grounding was necessary because our customers were massively disrupted by unions. It was impossible to deliver our schedule and the business community were starting to leave in droves.”
Or this:
“If we had done nothing, our brand would have been in trouble. The action we took, though difficult, was necessary…. Our customer research said it was worth it.”
Joyce is displaying gross arrogance when he says the grounding was necessary and that the response was positive. It was a hugely disruptive ploy bordering on the sort of sabotage the union movement phased out years ago.
But he is right when he says change is necessary at Qantas. The airline has to change. Some of the things Joyce said today were astounding to those whose ear is not regularly attuned to aviation issues. Who knew flights from Bangkok and Hong Kong to Europe aren’t profitable? Who knew Qantas spent nearly half a billion dollars in jet fuel in the last six months? Who knew they spent $1.4 billion on engineering and maintenance last year?
Who’d run an airline, eh?
Qantas will be nowhere if it doesn’t address its structural issues. The airline needs to be profitable to employ Australians. The real shame is that the focus of tomorrow’s papers will not be on the fat cat banks axing jobs, but on Qantas.
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