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Published on Monday, June 25, 2007

Alan Joyce in for the long haul

In a face to face interview with Geoff Easdown from The Herald Sun, Jetstar’s man on a mission, Alan Joyce, suggests the time is not too far off when ordinary folk will think nothing of flitting to Paris for an annual holiday.

He also envisages Australia's resident Greeks and Italians flying to Athens and Rome on one-way $800 tickets.

Joyce, 40, is staking his career and enviable reputation as well as much of his Qantas parent company's fortune on the explosive growth in low-cost air travel.

From a humble start with just 14 small, single-aisle jets four years ago, Joyce and his team have built a business which was profitable within six months and now flies to 22 short and long-haul destinations.

He operates from sparse surroundings on the first floor of a nondescript high rise on Bourke St and on that score, not much has changed in the four years he has run the airline.  His head office team of 200 work cheek-by-jowl in an open plan area alongside him and when we met on Thursday, it was in a space that doubles as both a board room and small storage area for long expired promotional material.

The board table had seen better days, but like Jetstar itself it might be missing the frills but is still functional.

The man behind the brand is a career aviation executive, a product of an Irish working class family, with his mum a cleaner and his dad a former postman.

Joyce says his parents' desire to get their children a good education coupled with the Irish government's free - and good quality - tertiary education system inspired him and he studied physics and mathematics, gaining a Batchelor of Science at Dublin's Trinity College, before obtaining his Masters degree in management science.

To gain his Masters, Joyce built mathematical models to emulate real world situations, a discipline that later gained him a job as a program analyst in a small software concern, but he quit six months later and went to work for Aer Lingus, solving problem issues that ranged from overbooking flights to the cost of no shows to the airline.

Moving up the corporate ladder, he worked in fleet planning, marketing and in selling IT systems to other airlines and then head-hunted 11 years ago by Ansett, he was put in charge of network planning in Melbourne before moving on to Qantas a year before the old Melbourne-based airline closed.

Acknowledging that his life remains largely work-focused, Joyce has few interests, but he jogs daily to keep trim, reads an occasional book, and escapes with a film.

"Strangely, for an Irishman, the last film I saw and liked was The Queen," Joyce muses, but he does admit to a more than passing interest in politics.

He prefers Melbourne to Sydney, where he was the Qantas Group General Manager responsible for network planning and strategy, before he got his chance to head up Jetstar.

"Returning to Melbourne was like a real homecoming," Joyce says.  He likens Melbourne to the European capitals. "Winters here are like our Irish summers," he says.

Single and without ties, his life is based around a schedule that gets him to his desk each morning by 7.30.  Joyce works a 12-hour office shift and acknowledges that nights at his Southbank apartment are regularly interrupted by office calls.

He tells, too, of how he sets aside one day of each weekend to catch up on office work at home.

Joyce is an Australian citizen, having sworn his allegiance - to the Queen, of course - at a citizenship ceremony three years ago in Sydney.  He says he took the oath of loyalty to serve the Queen of Australia because he wanted to make a commitment to the country.

Joyce admits to an interest in politics, and being Australian meant he could vote and have a say in what happens. His working class origins left lasting impressions.  "My views tend to come more from a socialist background," he says.

Joyce did vote in the last Federal election, but when the conversation turns to the coming poll, he senses the inevitable question and laughingly responds, "don't ask me".

Shifting to the politics of his native Ireland where he was once active in Labour politics, Joyce explains how the Labour Party of Ireland is a vastly different organisation to its Australian namesake, the missing u included.

"The two biggest parties in Ireland are both right wing," Joyce says. "There is no left wing."

Returning to matters aviation, it is clearly evident that, once Jetstar beds down its long-haul activities in Asia, Europe will be the next port on the growth plan. This will involve establishing hub destinations in either Kuala Lumpur, Bangkok or Ho Chi Minh City.

Incoming Jetstar planes will disembark package holidaymakers at these centres before refuelling and boarding fresh crew for a second leg hop to Europe and Vietnam is expected to form a key plank in this plan.

The new 30% interest Qantas is forging with Vietnamese state-owned carrier Pacific Airlines brings with it rights to operate to European capitals, Paris included.  "We might do Melbourne-Ho Chi Minh-Paris," says Joyce, declaring that it would be a huge market for Jetstar.

He is also looking favourably towards reviving the Bangkok, Athens, Rome service that Qantas abandoned some years back due to heavy losses.

"Vietnam also offers huge domestic potential," he says. "Ho Chi Minh City has nearly eight million people."  "There is something like six million in Hanoi."

"Pacific has just six flights a day between the two cities and there are only two domestic carriers." "What we are trying to do is to open up a number of different alternatives," Joyce says, noting that future rights to operate intra-Asian services might be put together in an operating model similar to Ryanair in Europe.

"We want to get Jetstar into a similar position, ready to take the high ground when open skies occur across Asia."  "Ryanair was the little Irish airline that struggled from 1986 until 1992 when it timed its entry into Europe perfectly after the Europeans deregulated."

"Now, if you ask Italians who Ryanair is, they'll tell you it's Italian, that's how instantly visible the brand is."  "We want people to think automatically of Jetstar as the low-cost leader they can trust."  

It was this very strategy that caught the interest of the private equity suitor - Airline Partners Australia - who saw a killing to be made if it could acquire Qantas cheap, build the Jetstar business and sell it back to investors for a packet at a later time.

Joyce admits now that he never thought when Jetstar launched it would eventually fly to its present heights.  "Looking back four years ago, we thought we would be a short-haul carrier limited to operating domestic services around Australia," he says.

"The critical thing for us to operate long-haul services was to keep our base costs at 40% below Qantas," Joyce says. "At that level we knew we could compete also against Emirates and Thai Airways."

Joyce, like the rest of the senior Qantas executive team, is committed for the time being to stay.  After APA's $11 billion bid collapsed last month, Joyce, like the other managers, undertook to lead Jetstar in the coming battle with soon-to-launch discounter Tiger Airways.

And on that score, Joyce sums up his view of the coming competition from an opponent which is subsidised by the Singapore government.  "Unlike Tiger, we are not losing money. We are in business to make money."

In another report in CBD in The Sydney Morning Herald today says that Jetstar's boss Alan Joyce is all for protecting his beloved airline's unique image as an Australian-owned company.

And good on him. Unlike that non-Australian animal Tiger Airways, according to Al, Jetstar is a true low-fare Ocker airline.

"Tiger is a Singapore Government entity.”  “They don't really have a commercial bone in their body," the Irishman proclaimed on Friday.

However, the naturalised Australian was a little coy about his other business interest in Singapore, the money-losing Jetstar Asia.

The Jetstar Asia director forgot to mention he shares a board with Temasek  appointees (also known as Singapore Government stooges) - one of them being the airline's chief cheese, Chong Phit Lian.

Nor did he recall that the Singapore Government has a 19 per cent stake in Jetstar Asia. Yes, really.

Report by The Mole and the Sydney Morning Herald CBD and The Herald Sun

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