Corporate Culture: Joyce and the Qantas Debacle

Will the boy wonder of cheap flights in Ireland kill off Qantas? Alan Joyce, chosen by Dixson to replace him after a failed attempt to sell off the national carrier, has shown a special attraction to a tough management style, attacking Qantas workers and their unions.

He was the brains behind the grounding of the airline in his attempt to bypass normal negotiations with the unions. This action backfired by allowing competing airlines to make money and costing Qantas a proportion of its loyal customers, thousands of whom were stranded and shocked by the company's disregard for their travel plans.

But for the first time it faces an operating loss in the six months to the end of December. Qantas is solvent, but bleeding at the rate of up to $300 million a half year - and these losses could deepen. And now Qantas stock has reached a record junk stock status. Joyce's answer is to slash jobs and revisit Dixon's idea of selling the company.

Despite the rhetoric, times in the airline industry have been far tougher than they are today.

Statistics show that even in the face of a retail confidence rout we are still spending plenty on travel and holidays.

But the emergence of a fierce and well-funded competitor in Virgin has knocked Qantas about and exposed the strategic mistakes of the dominant carrier, which was determined to hold 65 per cent share of the local market.

In trying to do so, it ended up adding more capacity into the local market, running flights that in too many cases were only two-thirds full. It was outfoxed by Virgin.

Any rescue for the carrier will come with its fair share of pain and dislocation. More than 1000 workers will lose their jobs, costs will be slashed and local maintenance facilities closed.

Joyce is still praising his "brilliant board"and his own leadership as the Stock Market is closing down Qantas shares.

And where was Leigh Clifford of Qantas Chairman last night? Invited to the HR Nicholls Society annual dinner as a warm up speaker where surprised no-one by advocating the crippling of unions

"We need to reform the Fair Work Act, he intoned complaining that it was "preventing companies from achieving productivity improvements." How will closing Qantas and sacking workers improve productivity, or has the neo liberal form of political economy reached the stage where it would rather shut down a company rather than negotiate with an organised workforce?