I don’t think anyone – certainly not me – could have predicted Qantas’ drastic course of action on Saturday. Yes, we knew that negotiations with the unions were not getting anywhere, but to ground the carrier’s entire fleet? What was Alan Joyce thinking?
The unions said the Qantas CEO has “gone mad”, but has he? It appears that over the past few weeks, Joyce had been forced into an impossible position. Accept the unions’ demands and you move forward with an outdated, inefficient airline that surrenders at the first sign of union pressure. But carry on with unsuccessful negotiations and the airline would be forced to ground an increasing number of flights, incurring mounting losses and severely impacting its brand image. In both scenarios, the Qantas would end up dying a slow, painful death.
Joyce needed to bring the issue to a head, and he did so, in spectacular fashion. The decision to lock out striking employees, causing the grounding of the entire Qantas fleet, was a massive, unprecedented gamble. But it appears to have paid off.
The Australian government has now intervened and the unions have been barred from staging industrial action for up to 120 days as mediated talks resume.
The big question is, of course, what happens next for Qantas? Well that lies in the hands of the mediators. Sadly this latest row does appear to have widened the divide between Qantas and its unions even further. Both sides are now accusing each other a “holding passengers to ransom”, and while Joyce’s actions may be seen as heroic by many, he has become a figure of such resentment among unions that his continued presence can only serve to undermine further reconciliation efforts.
So should this weekend be his final act? Should be quit while he’s ahead and allow a less divisive figure to lead the airline through this next important phase? Well perhaps, but I don’t believe this will happen. In times of economic hardship, Joyce has set the foundations for Qantas to restructure and compete against the rising Asian and Middle Eastern airlines. Yes, he has made tough decisions, but I believe they will ultimately prove to be the right ones.
Whatever you think of him, Alan Joyce certainly isn’t mad.