10 huge battles Alan Joyce has fought

Alan JoyceGetty / Greg Wood

Qantas chief executive Alan Joyce is described as a failure and steady hand in equal measure, after running the airline through one of the toughest periods in its history.

Twelve months ago Qantas announced a $2.8 billion loss. Today it went back into profit, driven by cost-cutting, restructuring and good management of fuel costs.

And the last half of the 2015 financial year were the best six months financially in the history of the airline, according to Joyce.

So far, under his restructure program, $1.1 billion of cumulative transformation benefits have been realised. This includes $894 million unlocked in the 2015 financial year.

A lot of the pressures the company has faced are beyond the control of management. But the Irishman has been at the centre of some spectacular corporate fights – many that he has charged into – during his career.

He has shut down the airline in an industrial dispute. He has announced plans to lay off huge amounts of workers. He has led sensitive government negotiations at a time when many power-brokers would like to throw the airline to the dogs.

The outcome of the fight with a cashed-up Virgin Australia may well be the battle that defines Joyce’s legacy, but his career has been marked by other stoushes. Here’s a summary:

Fighting Geoff Dixon

Alan Joyce and former Qantas boss Geoff Dixon once, according to media reports, had a good relationship.

This all changed after Dixon -- as part of a consortium that included former Qantas exec Peter Gregg and banker Mark Carnegie -- purchased a small stake in the airline, and attempted to effect a change in strategy, including the tie-up with Emirates (which was back then just a proposal).

This souring culminated when Qantas suspended and then reallocated a $44 million contribution to government body Tourism Australia, of which Dixon is chairman.

'As I have indicated to you in our recent discussions, Qantas is of the view that as chairman of Tourism Australia, Dixon is in a position of significant and untenable potential conflict,' Joyce wrote in a letter to Labor politicians explaining the decision, according to The Australian.

In January last year, after failing to convince other shareholders of their vision for Qantas, the consortium sold its roughly 2% stake.

Shutting down the airline

This is certainly the most well-known battle Joyce encountered, and has defined his time at the helm of the airline.

In 2011, during a protracted dispute with pilots, ground staff and engineers over pay, conditions and the outsourcing of jobs overseas, Joyce shut down the entire airline, announcing it in a press conference in which he announced: 'We are grounding the Qantas fleet now.'

All told, it cost the airline around $68 million, after more than 120 flights were cancelled.

The shut down which also saw staff locked out cost millions. Joyce said it was necessary to resolve the dispute.

'They must decide just how badly they want to hurt Qantas, their members ... and the travelling public,' he said of the unions involved after the domestic and international fleet was indefinitely grounded.

While it was an unprecedented move that earned Joyce his fair share of criticism (not least of which from the government, which said it was blind sided), the dispute was eventually resolved and flights resumed.

Handling Jetstar seating

In 2003 Joyce became the founding boss of Qantas low-cost carrier Jetstar. Soon afterwards, he was forced to introduce assigned seating in an effort to make the carrier more attractive to customers, particularly business passengers.

According to Fairfax Media, research showed many passengers would not even consider flying on the then-fledgling carrier if they were not afforded an assigned seat.

Unassigned seating was a cost-saving measure. Apparently, if travellers known they need to be in quick to get a good seat they won't all check in at the last minute. In this profile, he said that meant the airline could roster two check in staff rather than three, and that flights' turnaround could be reduced by five minutes.

In the airline business, even small things like this can lead to significant savings.

The collapse of Ansett

Joyce was an executive at Ansett in 2001 when the domestic carrier was placed in administration, and has said in several interviews the collapse had a significant affect on his outlook.

In this Fairfax profile, conducted when he was CEO of Jetstar, Joyce lists the demise of Ansett as one of his biggest regrets.

'I had a lot of friends there but it did teach me a lesson.

'Qantas was a lot more aggressive and had a can-do attitude. Ansett, especially once Air New Zealand took over, had analysis paralysis.

'You have to have management that is determined and aggressive and will do what they have to do.'

The Emirates deal

Joyce oversaw a keystone deal with Emirates that was several years in the making.

Last year, the two airlines announced an alliance that saw Qantas move its Europe hub from Singapore to Dubai.

Now, there are 14 Qantas-Emirates flights to Dubai per day.

The capacity war with Virgin Australia

This one has rarely been out of the headlines - the fight that's always had the potential to make or break Joyce's career.

Virgin Australia, for several years, has been executing a strategy of undercutting Qantas on its domestic routes, and desperately trying to nick its corporate clients.

Qantas has stated several times that it will not cede its 65% domestic market share, which is becoming increasingly hard as Virgin does not have an international airline to fund. And, as everyone is well aware by now, it can raise funds through its overseas-based institutional shareholders.

Leading Virgin Australia is John Borghetti, who was also a Qantas CEO candidate when Joyce took the job. Many attribute the current war to the rivalry between the two airline bosses.

Lobbying for government backing

When the boss of one of the country's most-visible companies needs to ask the government for help, it's a big deal.

After Virgin Australia announced it was going to raise $350 million, mostly through the overseas airlines which own it, Joyce set to work on changing the rules of the Australian industry.

News broke that he had written to several senior politicians, lambasting Virgin Australia's capital raising -- which he asked them to stop.

Qantas thinks it is unfair that Virgin Australia can sure up its cash reserves (what it uses to undercut its routes) with the help of foreign airlines that compete with Qantas internationally.

Domestically, Qantas controls the market and turns a profit, and it needs this success to continually fund its more costly, and less viable international division.

There has been division within the government on the assistance package, with some factions wanting to throw the airline to the dogs -- while others, including (according to media reports) the treasurer Joe Hockey, want to help it.

Options touted include a debt guarantee and revisions to the Qantas Sale Act. Either way, given the state of the company, any assistance will be a much-needed win for the airline, in no small part brokered by Joyce.

Personal challenges

Joyce grew up in a working-class town on the outskirts of Dublin called Tallaght.

'It’s working-class, with a lot of council estate housing,' he said in a 2012 GQ profile.

'My parents bought their house in the early-’70s and they live in it still.

'They’ve been my inspiration; they’re very hardworking, studious and adventurous people. My mother worked as a cleaner in a sports complex and my father in a tobacco factory as a supervisor.

'Education was the focus for we kids. My father held down a couple of other jobs to pay off the mortgage and ensure we all got to university.'

Despite his humble upbringing, Joyce went on to attend the prestigious Trinity College Dublin, where he studied mathematics and physics.

In 2011, Joyce was diagnosed with an aggressive form of prostate cancer. According to a News Corp Australia report, he was back running the airline from his couch two days after the operation.

Splitting Qantas in half

In May 2012 the domestic and international arms of Qantas were broken into separate entities, with each given their own bosses. Results from the two wings are also segregated.

A restructure of the international arm was already under way at the time, and the change was described as an aspect of those plans.

Analysts pointed out, after it was announced, that it was, in a way, a PR move for Joyce.

He knew the international business was in for some hard times, which meant job cuts. When the split was announced, it was just days after the airline said it was laying off 500 people.

Reporting results for the international business allows the company to highlight to unions, politicians and customers just how bad things are: the necessary imagine require for these groups to swallow tough decisions.

Qantas domestic is besieged by Virgin but it still owns more than half of the Australian market. Job losses are somewhat less palatable when results look better than they actually are, because they are buoyed by a more profitable arm of the business.

A lot of Qantas's problems with Virgin today are caused by its international business. Virgin is just a domestic company, with overseas shareholders to back it up, and this means it is more nimble.

This has always been the case, and as a much larger company it would be wrong to say Qantas was surprised by this. Breaking the company into two divisions, whether it worked or not, was a big move by Joyce.

Rebuilding the Flying Kangaroo

In February 2014, Joyce announced what he called the Qantas Transformation Program to bring the airline back to profitability

The key plank was to find $2 billion in savings, cut the workforce by 5000, reduce debt and restructure to get better yields for every seat sold.

Since then, the airline has gone from a $2.8 billion record loss for the 2014 financial year to a 2015 underlying profit of $975 million. The statutory profit after tax of $560 million included $186 million of costs driven by redundancies, restructuring and other costs associated with the Qantas transformation program. Revenue was up 3% to $15.816 billion.

The airline announced a $505 million capital return, a 23 cents per share cash distribution which for most shareholders won’t attract a tax payment.

Joyce says none of that would have been possible without the transformation program.

So far, under Joyce’s restructure program, $1.1 billion of cumulative transformation benefits have been realised. This includes $894 million unlocked in the 2015 financial year. Since February 2014, 4000 of the 5000 jobs have gone.

In the current financial year, another $450 million in savings are in sight.

'Without those numbers Qantas would have been producing a loss today,' says Joyce. 'Qantas wouldn’t be ordering the 787s and Qantas wouldn’t be making any returns to the shareholders.'

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