Qantas turnaround wizard Joyce has a one-word lesson for Cathay

CEO Alan Joyce, who is steering Qantas Airways through a successful three-year transformation, has one word of advice for Cathay Pacific Airways: adapt. On Wednesday, Hong Kong’s flagship carrier reported its first annual loss since 2008 as declining demand for business travel and competition from Chinese rivals eroded earnings. While Joyce’s restructuring at Qantas is set to deliver A$2.1b (US$1.6b) in cost savings by the end of June, the marquee Asian airline just recently set out on a similar course, vowing to improve returns and operational efficiency. “It is a lesson to all carriers around the globe to adapt and change,” Joyce said Thursday. “That’s the way you survive.” Joyce has cut thousands of jobs, deferred aircraft, retired older planes, and dropped unprofitable routes while partnering with ex-nemesis Emirates to help stem losses on international routes. Qantas in August announced its first dividend since 2009 and handed bonuses to 25,000 workers following a record annual profit. He has also targeted to save A$400 million annually in cost and revenue benefits. Qantas shares have more than tripled in value in the past three years, while those of Cathay have declined 26% in the same period. “Airlines go through these phases -- we’ve gone through it a couple of times in our history,” Joyce said. “They are going through it now. Cathay have a good management, have got a great brand and a great franchise. Everybody needs to make sure that they allow Cathay to do the right thing and change their business.”<br/>