This razor sharp November story on Qantas by venerated IA columnist Dr Lee Duffield was deservedly one of our most popular of 2023, coming in at seven.
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How Australia’s pride and joy came to be symbolised by a disruptive reedy-toned foreign yuppie is a metaphor for neoliberal financial ideology. Dr Lee Duffield reports.
GREAT BUSINESS AIRLINE?
To this day, Qantas as an enterprise is regarded as successful in the world of finance: the share price travelling well, costs cut, new aircraft being ordered.
The shareholders’ Annual General Meeting in Sydney on 3 November re-instated the chairman and his entire board. The new CEO, Vanessa Hudson, described a run of failures and crises as mostly about mistakes to rectify and “earn your trust back”. The gathering did vote 90 per cent to reject large executive bonuses — non-binding, but likely to happen. In that, the principal target and object of blame would be the recently resigned chief executive officer Alan Joyce. Joyce is set to receive a $23.6 million payout if all cash bonuses and share entitlements are confirmed.
Yet Qantas and its reputation have undoubtedly sunk into the mud, showing up a great difference between the world of finance and the experience of real people.
An ABC commentary joined most other media describing the new Qantas:
‘A dodgy dysfunctional scramble for post-meltdown survival and obscene levels of executive payout … with half the ground-crew-per-plane it had in 1994 …’
Other outrages include:
- ruinous staff-cutting and out-sourcing to outside entities, their failings including a chronic lost luggage problem;
- jacking up of fares, seeing a privileging of front-end services, with less and less for private travellers down in steerage;
- allegations of insider trading in Qantas shares;
- action by the regulator, the ACCC, over the sale of tickets on already-cancelled flights.
Now for some illuminating stories.
STORY OF THE ANNIVERSARY
Back in 1985, after 65 years in the airline business, Qantas was a source of national pride. It was regarded as being outstandingly safe; extremely efficient; it carried the national flag and the red kangaroo on its fuselage; and children learned what the letters stood for and how it started in outback Queensland. Qantas linked Australia to the world. It represented advanced technology and modernity as the global airline industry developed in strength. Most of all Qantas belonged to everyone, being fully owned by the Australian government.
That year, they had an anniversary promotion, and on ABC metropolitan radio we obtained the names of the captain and crew of a flight bound for Singapore in the late afternoon. The presenter, the late John Woods, gave them an eloquent on-air “bon voyage”, capturing the romance around a soft journey into the gathering dusk. Someone in the control room asked if it was “too commercial”. They were told it was a fellow public enterprise with the ABC.
STORIES OF THE FACELESS RIP-OFF MACHINE
Fast forward to 2023.
Arriving at the Qantas hall, there was an unannounced new check-in system: use a QR code or don’t fly. Absolutely nobody from the airline was on the floor, seemingly deliberately done. Next door, Virgin made sure they had several uniformed staff in the check-in zone.
An example from the COVID refunds disaster, concerning an elderly traveller who, in 2019, followed advice from health authorities and cancelled a flight, for which a friend had lent the use of their credit card: $850.
In Phase One, it was made impossible to contact the airline to act on their undertaking to make refunds, no response or contact point in any format.
Phase Two, the payer achieved contact through Frequent Flyer, who passed it to somebody on the “Customer Care Team”, who wrote to dismiss any claim: it was a budget ticket, so not eligible, despite any relaxations under COVID. If it had been eligible, they were told, only travellers not the payer could get a refund, which could only be in the form of a voucher for the same journey, but only if at a dearer price, and if before a certain cut-off date — relaxed to the end of 2023.
Phase Three, as the company began waking up to reputation damage, the traveller eventually got such a voucher, though they were on health grounds unable to use it.
Phase Four, as the airline capitulated and stopped dodging refunds, the traveller, after more hours on the phone, got them to agree to a full fare rebate to the payer, except only due for payment over five more weeks, on 25 November this year. Watch this space. It took three years.
JUST ANOTHER AIRLINE?
The trouble went back to the Keating Labor Government’s 1995 Qantas privatisation. Business bloke Paul Keating had little time for Qantas’s special place in Australian culture; it was, so he said, “just another airline”.
His predecessor, Bob Hawke, had been in it up to his winkling eyebrows. He was extremely thick with one Sir Peter Emil Herbert Abeles, then owner of the second national airline, Ansett. When any party comes to power, it suddenly acquires many old friends. Abeles was there generously offering free advice on national economics, incidentally doubling as a lobbyist for the “new-think” of 1980s neo-liberalism – especially on the privatisation of government assets — especially airlines.
Then Transport Minister Stewart West told a close colleague he’d been called in by Hawke, who turned him over to Abeles, to there-and-then give him a dressing-down on his Labor ideas. Very discouraging, he recalled. It can be imagined that Hawke might also have had the Treasurer, Paul Keating in, for Abeles to dandle on his knee and impart some ideas about how to run the economy. It would be tutelage keenly received. Unlike the earlier Labor Treasurer and just this week deceased former Opposition Leader, Bill Hayden, who did his economics degree while in parliament, Keating was an open book and became the nation’s chief privatiser.
Hawke himself, for all his good points and grace, may have felt some lingering uneasiness and need for self-justification about Qantas. Now and then in retirement, the silly old bugger − as he was wont to call others − asserted that certain tasks were unsuitable for governments. The example he would use would be running airlines.
SACK THE WORKERS
By the 1970s, a “public service” model for government businesses had certainly given them a bad name — sitting ducks for the inflamed rhetoric of neo-liberalism that demanded “reforms”, like privatisations and mass sackings of those “bad people”, public employees. Often, these state enterprises would be taking losses, and subject to “capture”, to be run in the interest of inflated staff numbers, networks or lobby groups — not customers. Without agreements on industrial action, Qantas flights would be delayed or in-flight services cancelled because of some running dispute.
However, privatised or not, public institutions like Qantas, Telstra or the Commonwealth Bank were in line to make sweeping changes anyway, in step with worldwide business practices, reflecting amongst many things impacts of new technologies. Change was to be expected, but they did not get the chance.
“FREEING UP” THE SKIES
Where can we place the recent CEO of Qantas, Alan Joyce, in all this?
In the first heady days of that reactionary political movement called “free market”, “monetarism”, or “neo-liberal”, one key idea was to throw off taxes and business regulation. For this made-in-American strategy, they used the American term “freeing up”. New Zealand and Ireland took it up, setting up pocket financial systems a good bit better than joke tax havens on far-away islands, which would under-cut larger economies on corporate taxes to get a rush of cash.
Ireland famously leveraged its youngish population profile at the time and its conservative, if recurrently heavy-handed, education system to mobilise a few generations of young urban professionals − the yuppies of the eighties – who are good for servicing the new financial economy. Legions of these could be found in Brussels, working for the European institutions, populating Irish theme pubs to share some good craic. The EU already had been well seized on by Irish governments, getting subsidies for infrastructure and hitherto poor farms getting the Brussels “milk cheque”. The biography of your man who revamped Qantas, places him, at 57, in the yuppie generation. Otherwise, it indicates he received his grounding in management and money from a multi-denominational school, so was evidently spared the “stricter” corrections of schools in the national tradition.
Joyce was not the supremo of the Qantas privatisation, though, being made CEO nearly a decade later. He’d begun at Aer Lingus, then-Irish flag carrier, there as greatly loved as Qantas in Australia, leaving well before its 2006 privatisation. It was re-made over time into a cheapskate airline and eventually sold to foreign interests. An experience retold by long-time users of Aer Lingus, was of the long “snake”, undignified queuing and jostling before a cut-down number of check-in desks, one or two, in a limited terminal space.
Joyce’s unpopularity was accentuated by the 2019 pandemic, which signalled an intensification of the dehumanisation of Qantas, of its top-down management practices, and of a cruder focus on the bottom line. He had gained power, even committing the airline to some favourite social issues, a trend for corporations addressing many “publics” beyond their immediate customer base, with Qantas avowing its support for the successful vote for same-sex marriage and the recent unsuccessful Voice Referendum.
He shared an unconcealed dislike for unions that took him on, especially over sackings and out-sourcing. It would be very galling for a man fully in charge, of a project, to encounter opposition from a rival source of company knowledge. But mostly, the pressure to go came from the multi-million dollar bonuses. He left the management set-up unchanged.
Meanwhile, the ownership set-up is ambiguous, even the Australian part — who are they?
SPIRIT OF AUSTRALIA?
London’s Financial Times diagnosed the problem thus: “Australia falls out of love with Qantas”. So where does this leave the cherished institution, once the national flag carrier?
Several great airlines founded by governments to launch the global aviation industry have been running unprofitably. Smaller ones, state-run or privatised, like Sabena, Olympic and Swiss Air, are already long gone. It might have to be faced: the Qantas that linked us to Europe via the London service QF1, which was the automatic choice to carry sports teams, private adventurers, families living overseas, students, official delegations, or soldiers, or did special charters to pick up people in trouble, has gone. Its managers might continue trying theme advertising and Aussie songs, but does anybody feel the love anymore?
One last consideration: if it is truly important to the hearts of the nation, de-privatise, or nationalise, it. Compulsory resumption of just half the foreign-owned component would be a good start towards effectively controlling the business.
Fair statutory compensation for dispossessed shareholders would prevent speculative outbursts, like the profiteering that followed so many privatisations of public property over recent decades. Run effectively, with good business sense, perhaps it could once again honestly claim to be the “Spirit of Australia”.
Senator Glenn Sterle in the Senate rips Qantas CEO Alan Joyce a new one. What a takedown 😳
— stranger (@strangerous10) November 24, 2022
💥🔥🔥🔥kaboom pic.twitter.com/O3FyRXBnqK
Amongst Dr Lee Duffield’s vast journalistic experience, he has served as ABC's European correspondent. He is also an esteemed academic and member of the editorial advisory board of Pacific Journalism Review.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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