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Qantas CEO bullish on possible future mergers

Direct News Source

14-Oct-2010 Any future Qantas merger attempts would be like "BHP on steroids" Qantas CEO Alan Joyce told a packed QUT Business Leaders Forum today.

Mr Joyce likened the recent failed BHP/ Rio Tinto merger moves to airline amalgamations in which Qantas might be involved. While he said consolidation of the world's airlines was desirable and inevitable, and Qantas was in a good position to consolidate, the 90-year-old airline would have to maintain its iconic Australian status.

Referring to this year's merger talks with British Airways which did not get off the ground, he said Qantas would have to be the dominant partner in future deals with any airline.

Mr Joyce outlined to the Business Leaders Forum plans for Qantas including adhering to one of the world's strictest carbon reduction targets of a 2 per cent reduction in emissions annually until 2020 despite having $17 billion in new aircraft on order. He said the use of fossil fuel alternatives was key to meeting the target.

"Dealing with volatile exchange rates is a challenge and the high Australian dollar is a positive for Qantas outbound but less so for inbound as we need to keep a balance," he said.

Fuel price volatility was another challenge with record low fares this year across in the industry in the face of high fuel costs.

"Every $1 million movement in fuel costs has a $36 million impact on the bottom line," he said.

Mr Joyce has been 21 years in the aviation industry. He was born and bred in Dublin of working class parents, the eldest of four sons for whom education and competition "ruled our lives. You name it we fought over it".

"I pursued maths and physics because I cared about facts, logical consequences, data, and so I applied my mathematical skills to aviation problems. The first one was to find the optimal overbooking level for Aer Lingus," Mr Joyce said.

He came to Australia in 1996 where he found people "as close to the Irish in warmth and friendliness" as it was in distance away from it. He started at Qantas in 2001 and was given the task of setting up Jetstar in 2004 from scratch where, again, he used maths to deal with the hundreds of thousands of decisions that had to be made. Jetstar is now Australasia's leading low-cost airline.

"My early days as CEO of Qantas coincided with the global financial crisis. We survived very well; we were one of the new airlines in the world to continue to make a profit and the only one to maintain our investment rating with Standard and Poors and Moodys," he said.

Mr Joyce's five leadership tips are:

  • Assemble the right team
  • Ask the right questions and listen
  • Develop the right behaviours and reward them
  • Bring people with you and communicate
  • Keep on learning

Mr Joyce was the final speaker for the 2010 QUT Business Leaders' Forum presented by QUT's Faculty of Business. Australia Post chief executive Ahmed Fahour will be guest speak at next year's first forum in March.