Men Who Killed Qantas - Matthew Benns [91]
But his smile was about to become a lot more strained. After the terrible year Qantas had suffered, few people would have argued that Dixon had quit before the going got tough. But he had. Alan Joyce was about to reap the whirlwind.
AT THE END of 2008 Qantas finally had something to brag about. New state-of-the-art planes. The Airbus A380 super-jumbos cost over $330 million each, carry 450 passengers, boast six self-serve bars and, from the ergonomically designed chairs, give passengers laptop power to connect to email, and the choice of 100 movies, 350 television options and 30 PC-style games. Australian celebrity chef and Qantas catering coordinator Neil Perry said delightedly: ‘It’s got a toaster.’1 The arrival of the first double decker A380 even reunited John Travolta and Olivia Newton-John when it was unveiled in Los Angeles. So it seems a bit of a shame that they don’t always work.
It was bad enough when the plane’s 80-metre wingspan proved too big for Los Angeles airport, bringing all ground traffic to a standstill when it was moved around the runways. But in March 2009 all three of the new Qantas A380s were grounded. Two of them had fungus growing on the probes in the fuel tanks, which led to false fuel readings in the cockpit. Often caused by water in the fuel tank and treated with biocides, the fungus grounded the two jets while engineers cleaned the probes. The third was grounded in London by a ground steering problem and fuel leak.
Qantas executive general manager of operations Lyell Strambi, one of Alan Joyce’s old mates and part of the new guard at Qantas, was fielded to deal with questions about the stranded jets. ‘It’s just unfortunate with only three aircraft in the fleet that we just happened to have three problems in the one day. It looks really bad and we disappoint the customers, which is really the problem here,’ he said.2 What? Looks bad, disappoint the customers. Where was that old Qantas arrogance?
Maybe it had been beaten out of them. New MD Alan Joyce faced a true annus horribilis in 2009. He had taken over just as deal-maker Geoff Dixon’s last great play was coming to fruition. On the surface it seemed the perfect antidote to the coming tough times – a merger with another airline to make it a truly global player. British Airways had sold its shares in Qantas four years earlier to bale itself out of debt, but it was still the natural choice for a partner. The airlines had a shared history on the Kangaroo Route and were founding partners in the OneWorld Alliance (the alliance between ten airlines that had formed to allow passengers to travel the globe on one ticket). New chairman Leigh Clifford saw the opportunity in Dixon’s vision and began talks with British Airways chairman Martin Broughton and BA’s Irish CEO Willie Walsh. When Dixon stepped out of his office and into a four-month consultancy role before retirement, he had paved the way for Alan Joyce to see the deal through. The talks were bound to be friendly. The two Irish CEOs had worked together at Aer Lingus and are even related. Joyce once let slip that his mother is the second cousin of Walsh’s wife. However, it would need more than the love of a good Irish family to get this deal over the line.
The advantages were obvious. Strategically, Qantas would have first-class access to one of the world’s great aviation hubs, Heathrow airport, and the two airlines would be able to deploy Jetstar into Europe. The problem was the merger ratio – British Airways wanted it to be a 50:50 split and Qantas didn’t. Even after Prime Minister Kevin Rudd’s Labor government agreed to ease the foreign ownership restrictions, the Qantas Sale Act insisted the flying kangaroo be 51 per cent Australian owned. The deal was worth over $8 billion and Qantas was by far the sexier suitor. British