Qantas' senior executives face scrutiny Joyce's lieutenants
BusinessDay has learnt that the consultants have been meeting the airline's senior executives for several weeks as part of an overview of the company.
They are believed to be looking into matters such as the structure of the executive team, which includes Qantas Domestic chief executive Lyell Strambi and Qantas International CEO Simon Hickey.
Mr Hickey, the former boss of the airline's frequent flyer division, is on leave for about two months. Narendra Kumar, Qantas International's chief financial officer, is acting in his role in the meantime.
The arrival of new consultants at Qantas' head office in Sydney comes a year after the airline split its underperforming international flying operations from its domestic business. The shake-up was cast as an attempt at "giving accountability and direction" to the two divisions.
It also comes several months after the launch of Qantas' extensive alliance with Emirates.
Sources said the latest hiring of consultants was not about succession planning, despite Qantas chief executive Alan Joyce being set to notch up five years in the top job in November. "[But] everybody in the organisation is wondering what this consultancy group is going to come up with," one said.
The airline has hired consultants regularly in the past - most notably Bain & Company - but this time it is believed to have brought in consultants from another firm to look at the airline's structure. Qantas has had a long association with Bain. Jetstar chief executive Jayne Hrdlicka was a former senior partner at Bain and advised Qantas before she joined the airline in 2010.
The split of the domestic and international operations last year heralded the biggest shake-up of Qantas' upper echelons since Mr Joyce took over from Geoff Dixon as chief executive in late 2008. It also left Mr Hickey, Mr Strambi and Ms Hrdlicka as the most likely internal candidates to succeed him.
The creation of two business units was focused on turning around the performance of the international business, which has posted large losses in recent years.
One of the concerns about the separation of the premium flying operations was the potential for duplication of management roles - or managers protecting their patches to the detriment of the company.
Qantas now has two chief pilots - one for international flying, the other for domestic operations - plus a chief pilot at budget offshoot Jetstar.
Qantas would not confirm nor deny the use of consultants. But it rejected concerns about the duplication of management roles, saying it was minimal and "far outweighed by the benefits from the move".
Joyce’s lieutenants
Lyell Strambi Qantas domestic chief
Simon Hickey Qantas international chief
Jayne Hrdlicka Jetstar chief executive
Frequently Asked Questions about this Article…
Qantas has brought in external consultants to assess its senior executive team and the company’s structure, including performance since the split of its domestic and international flying operations. The consultants have been meeting senior executives for several weeks as part of an overview of the business.
The review is understood to include senior leaders such as Qantas Domestic chief Lyell Strambi and Qantas International CEO Simon Hickey. The article also references Jetstar chief Jayne Hrdlicka and notes that Narendra Kumar, Qantas International’s chief financial officer, is acting in Mr Hickey’s role while he’s on leave.
According to sources in the article, the latest hiring of consultants is not believed to be about succession planning, even though Alan Joyce is approaching five years in the top job. That said, people inside the organisation are curious about what the consultancy will recommend.
The consultants are assessing performance since last year’s split, which created separate domestic and international business units. That split aimed to give accountability and direction to each division and to help turn around Qantas International, which has reported large losses in recent years.
Yes. One concern flagged in the article is the potential for duplicated management roles or managers protecting their ‘patches’ after the split — for example, Qantas now has separate chief pilots for international and domestic operations plus a chief pilot at Jetstar. Qantas has rejected worries about duplication, saying any overlap is minimal and outweighed by the benefits of the split.
Qantas has a history of hiring consultants, most notably Bain & Company. The article says this time the airline is believed to have brought in consultants from a different firm, though Qantas would not confirm or deny the engagement.
Simon Hickey, Qantas International’s CEO and former head of the frequent flyer division, is on leave for about two months. During his absence, Narendra Kumar, the international division’s chief financial officer, is acting in his role while the consultants carry out their review.
Investors should watch for any announcements about changes to the executive structure, updates on Qantas International’s turnaround plans, commentary about duplication or cost savings from the split, and formal statements from Qantas about the consultancy’s findings. The recent Emirates alliance and the company’s efforts to address international losses are also relevant context to monitor.
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