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Qantas CEO steps down as Australia launches probe into controversial Qatar Airways decision

The day Joyce stood down as CEO falls on the same day a senate vote went through.

Qantas Airways’s long-serving CEO Alan Joyce will step down from the company two months earlier than originally planned, as the airline faces mounting criticism and lobbying accusations.

He will be replaced by Vanessa Hudson, who is set to become the first woman to lead the century-old airline, on Wednesday.

The move comes as Australia’s government continues to face intense scrutiny since rejecting a Qatar Airways bid for 21 extra weekly flights to various airports across the country, including Sydney, Melbourne, and Brisbane.

Officials from the government, tourism sector and business groups are collectively advocating for greater transparency regarding the reasons behind the refusal to grant additional flights to Qatar, particularly in light of Qantas’ reported lobbying efforts.

Joyce’s expedited departure follows an apology issued by Qantas on Monday for not meeting usual service standards and recognising the harm to its reputation. It also comes shortly after the company reported record annual earnings due to robust travel demand.

Last week, the Australian competition watchdog Australian Competition and Consumer Commission (ACCC) took legal action against the airline, alleging that it sold tickets for more than 8,000 flights scheduled between May and July 2022 without disclosing that these flights had been cancelled.

The airline faced criticism from both politicians and the public for initially allowing nearly $323.00 million worth of pandemic-era flight credits to expire by the end of the year. They reversed this decision shortly after the regulator filed its lawsuit.

Other controversies involving Qantas, such as the granting of a premium airport lounge membership to Prime Minister Anthony Albanese’s son, have also made headlines and further deepened its plummet to a sour reputation.

“In the last few weeks, the focus on Qantas and events of the past make it clear to me that the company needs to move ahead with its renewal as a priority,” said Joyce, who served as the airline’s head for 15 years.

Chairman Richard Goyder expressed that the change in leadership is occurring during a “challenging time” for both the airline and its employees.

Also on Tuesday, a senate vote demanding a probe into the government’s rejection of more Qatar Airways flights to Australia went through amid growing calls for a reversal of the decision.

The motion, pushed by Nationals Senator Bridget McKenzie, received support with a vote of 32-31 on Tuesday afternoon. The Labour and Greens parties opposed the motion, whereas the Liberal Party, Nationals, One Nation, David Pocock, and the Lambie Network voted in favour of it.

“The Senate has agreed to a short and sharp inquiry into Federal Labor’s decision to restrict flights into major capital cities,” McKenzie said regarding the decision.

“Finally we can get to the bottom of why the Gov has restricted Australians from having a safe, reliable and competitive airline industry.”

The government has asserted that there was nothing unusual about its decision to decline Qatar’s request.

Senator McKenzie had expressed earlier that a significant number of individuals were “incredibly disappointed” by the rejection and advocated for a Senate investigation. “We have seen the Labor Party give seven different reasons as to why they rejected the Qatar application,” McKenzie said.

Numerous government ministers have pointed out that Qatar has the option to increase its flights to Canberra, the Gold Coast, Adelaide, and Avalon.

McKenzie also garnered enough support to request the release of documents, compelling the government to either present them by next week or provide a rationale for their non-disclosure.

During Question Time, she accused the government of shielding and running a “protection racket” for Qantas, as the transport minister declined to provide further details regarding the decision made in the “national interest.”

“Who is the government really protecting when it says this decision was in the national interest?” McKenzie said on Tuesday.

The inquiry committee will consist of three members from the opposition, two from the government, and two from either a minor or independent party. The deputy chair of the committee must be a senator from a minor or an independent party.

The committee’s scope of investigation will encompass all “federal government decisions relating to any proposals received in the past 12 months for additional services to Australia’s major airports.”

Qantas lobbying?

Joyce was questioned on whether Qantas lobbied the Albanese government to prevent competitor Qatar Airways from securing additional flights to Australia.

“We do make representations on a lot of these issues,” he said, adding that “that’s the way the system works.”

“We think, given the nature of Qatar’s operations, what they will offer in this market would cause a short-term distortion which we didn’t think was appropriate.”

The Qantas lobbying efforts were brought under spotlight as the country’s prime minister was accused of giving in to the pressure.

Earlier this week, Australia’s prime minister rejected claims that the government had made an agreement with Qantas to safeguard the national airline’s market share following its controversial decision, triggering allegations of working in the interest of his “mates in Qantas.”

“I received no lobbying from Qantas about this issue,” Anthony Albanese said, adding “my government supports competition, but global aviation is not a free-for-all.”

“Qatar Airways can add more seats to Australia today, right now,” the prime minister said.

The PM has faced mounting scrutiny from the opposition, however the government has consistently argued that the decision was in the public’s best interest.

While it has yet to provide a clear reason for declining the request, Assistant Treasurer Stephen Jones said the decision was made to safeguard the “national interest” and support Qantas’ profitability. However, Jones has since revoked the latter reason.

Deputy Leader of the Opposition in the Senate Michaelia Cash criticised Anthony Albanese alleging that the prime minister is prioritising the interests of his “mates in Qantas.”

Cash urged Albanese to take actions in the best interest of the Australian public and to declare a review of the contentious decision when parliament convenes on Monday.

“Mr Albanese has been unable, to date, to explain to the Australian people why he believes it’s in the national interest not to reduce airfares, why he believes it’s not in the national interest to get our farmers’ produce on planes and get it out of this country, and why it’s in the national interest to not bring more consumers and tourists into this country, to help our ailing tourism and hospitality industries,” Cash told Today Show.

“So Mr Albanese, we all expect you today, on behalf of the Australian people, stand up and announce the review … For once, as the prime minister, act in the best interests of Australia, and not your mates in Qantas.”

During a Senate committee hearing last week, Joyce expressed concerns that permitting Qatar Airways to introduce additional services would disrupt the market, especially considering the anticipated increase in flights over the next year.

In the same hearing, Joyce detailed that he had sent a letter to the Federal government in October 2022 regarding Qatar’s proposal.

Assistant Treasurer Jones had cautioned against reducing airfares too significantly, as it could jeopardise the sustainability of the market for existing Australian-based carriers. This is a statement that he later denied as “absolutely taken out of context.”