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Timing is everything. On the heels of Qantas being pinged by the competition regulator, which has started legal action against the airline claiming it sold customers tickets for non-existent flights, the High Court\u2019s ruling on Wednesday that it illegally sacked 1700 ground staff cannot go unanswered.<\/p>\n
Qantas\u2019 polished public relations image is now unravelling thanks to the actions taken by its former chief executive, for which its board is now accountable.<\/p>\n
It is difficult to see how its chairman Richard Goyder can survive this. The board may not react immediately to the finding that the airline acted illegally in sacking its ground handling staff. But there is immense pressure on its directors and major shareholders to, at the very least, engineer a timetable for the early departure of Goyder, and a refresh of the Qantas board.<\/p>\n
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Happier times: Qantas chairman Richard Goyder (right) and Vanessa Hudson, who took over from Alan Joyce (left) as CEO last week.<\/span>Credit: <\/span>Rhett Wyman<\/cite><\/p>\n Both the illegal worker sackings and the allegations of mis-selling of tickets may be expensive for Qantas. The unions will seek legal costs and a substantial penalty, and the Australian Competition and Consumer Commission will seek hundreds of millions of dollars if its legal action is successful.<\/p>\n At the very least, shareholders will not take kindly to that.<\/p>\n The governance accountability playbook is one that has been followed on numerous occasions by companies involved in scandals over recent years, including a couple of major banks in the wake of the financial services royal commission, Rio Tinto after it blew up ancient caves in the Juukan Gorge and Australia\u2019s two large casino operators after shortcomings in their anti-money laundering procedures.<\/p>\n Typically, senior executives are moved on and fresh director blood \u2013 untainted by scandal \u2013 moves onto the board.<\/p>\n Until this week, Qantas was betting it could deploy the early retirement of Alan Joyce as a circuit breaker – a sacrificial scalp. And if that wasn\u2019t enough, it could claw back some of his $20 million-plus in compensation as a means to mollify the aggrieved mob.<\/p>\n This won\u2019t be sufficient now.<\/p>\n There will be fresh pressure on the company\u2019s recently appointed chief executive Vanessa Hudson to acknowledge the airline\u2019s mistakes and demonstrate her preparedness to overhaul its culture of profit at any cost.<\/p>\n It is what the community expects when the unacceptable face of capitalism is unmasked.<\/p>\n It isn\u2019t surprising that the Transport Workers Union is calling for Goyder\u2019s scalp, but this time it will have support from other quarters.<\/p>\n The large superannuation funds that own Qantas shares and dominate the largely fractured share register are also in the firing line. Until the past few weeks, they have been supportive or silent on the airline\u2019s poor customer service record or its treatment of workers.<\/p>\n The $2.5 billion profit that Qantas posted for 2023 was made on the back of cutting costs (including staff costs) and raising customer fares.<\/p>\n Joyce had plenty of form on playing incredibly hardball on industrial relations \u2013 it was a feature that had endeared him to many shareholders, but had made him unpopular with staff.<\/p>\n Joyce had been a master at courting those who matter \u2013 politicians and corporates occupying the big end of town.<\/p>\n His outsized influence in Canberra will now undergo forensic examination at a Senate inquiry into the government\u2019s decision to block Qatar from servicing additional flights into Australia.<\/p>\n The government\u2019s stated reasons included public interest on the basis that it would mean additional jobs for Australian workers.<\/p>\n In light of the High Court decision on Wednesday, this explanation feels farcical.<\/p>\n Meanwhile, the shocking allegations from the ACCC that Qantas engaged in false, misleading and deceptive conduct towards its own customers, if true, breaks the fundamental rule of business that says alienating customers in the pursuit of profit is not a long-term strategy.<\/p>\n The airline said on Wednesday that \u201cwe deeply regret the personal impact the outsourcing decision had on all those affected, and we sincerely apologise for that,\u201d but maintained that when it sacked the workers it was in COVID-induced survival mode.<\/p>\n While profits are now booming, it\u2019s the board\u2019s survival that is now in question.<\/p>\n The Market Recap newsletter is a wrap of the day\u2019s trading. <\/i><\/b>Get it each weekday afternoon<\/i><\/b>.<\/i><\/b><\/p>\nMost Viewed in Business<\/h2>\n
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