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Qantas CEO attributes financial success to open environment

Time:2016-09-22 20:06 Source:ATW Online Writer:admin Click:Times

Cutting across company department silos and ensuring the voices of all departments are heard is critical to an airline’s financial success, the CEO of Qantas Airways believes.


Speaking at the IATA World Financial Symposium in Singapore Sept. 22, Alan Joyce said he was “a big believer” in diversity and inclusion, and that it was important to listen to all voices, not just the financial department.


“That’s how airlines need to be run. Having silos where only one department is listened to can have a bad outcome,” Joyce said.


Joyce talked about the restructuring he has overseen at Qantas Group, leading to a record result in financial year 2016 with a net profit of 1 billion Australian dollars ($760 million) for the fiscal year through June 30, an increase of more than 80% from the previous year. It was the best result in Qantas’ 95-year history of Qantas, and the best result in Australian aviation history.


Joyce said that before restructuring, Qantas had “unbelievable problems” and too-high costs. But it was not enough just to take out cost; it was also essential to improve revenue and customer service.


“You have to have a balanced approach and that’s not just about the finance department,” he said.


Qantas Group focused on four principles – having a disciplined financial plan for its fleet and capacity growth; being prepared for volatility; having the right hedging plan to properly manage fuel costs and also managing debt; and being innovative.


On the innovation front, Joyce said Qantas’ joint ventures with American Airlines, China Eastern and Emirates Airline each requires different approaches to make the most of them.


The company is also generating revenue from new adjacent services, including its Qantas Loyalty program, which provides about A$350 million, and more recently a health insurance service.


The Group’s two-brand strategy - Qantas and low-cost carrier Jetstar – also gives the company “a very strong market position in Australia”, Joyce said.


Joyce has also put in place a “no office” work environment to encourage open discussion and communications. “I find it useful to have a chat over a cup of coffee in the morning rather than being behind a mahogany wall,” he said.





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