New Qantas CEO Vanessa Hudson faces more than just repairs to airline’s battered reputation

Less than a week into her new job, freshly minted Qantas boss Vanessa Hudson faces a mammoth list of problems to tackle, not least of which is prioritising customers. Following this week’s more-abrupt-than-expected departure of Alan Joyce — who had been at the helm of the Flying Kangaroo for 15 years — Ms Hudson has been left to pick up the pieces and focus on a litany of issues that have severely damaged the airline’s brand. Among them will be navigating the national carrier through a turbulent period of increasing cost pressures, falling ticket demand, a multibillion-dollar fleet renewal program and a slew of legal claims. On top of that is a renewed focus on the dominant hold Qantas has over Australia’s skies amid the ongoing fallout from the Federal Government’s decision to block more flights from Qatar Airways — which is domestic rival Virgin Australia’s codeshare partner — and a growing push from smaller airlines such as Rex and Bonza to muscle in. As the Australian Competition and Consumer Commission pointed out in its most recent report on competition, our domestic airline industry is one of the most concentrated in the world, with a lack of effective competition in the past decade resulting in “underwhelming outcomes” for customers. One of the pressing matters for Ms Hudson will be dealing with allegations from the commission that Qantas sold thousands of tickets on cancelled flights. Aviation expert Peter Harbison believes the new chief executive faces pressures on multiple fronts, highlighting that aside from the need to rebuild trust with customers, she will also have to navigate the airline through a likely fall in travel demand, spurred on by weaker consumer spending. “Whatever is going to happen, economically the next year is not going to be good,” Mr Harbison told The West Australian. “The substantive problems are going to be cost and revenue pressures, which is sort of the nemesis of the airline business.” Ms Hudson — the airline’s former chief financial officer who was by Mr Joyce’s side for four years — earlier in the week outlined her first task would be to see Qantas through “another challenging time” and work to restore trust in the brand. “As a company, our job is to get the balance right between looking after our customers, you — our people and the business itself,” she said. Ms Hudson will also have to oversee a massive and costly fleet renewal program over the next decade, including the addition of 12 new Airbus A350s and 12 Boeing 787s, which will start replacing the ageing A380s and A330s. Unions that represent pilots, cabin crew and airport workers hope renewed leadership at the airline will mean possibilities for better negotiations on pay through enterprise agreements. Qantas has repeatedly been accused of rorting every loophole in workplace law, like establishing internal labour hire companies to operate crew for flights on lower pay grades. The Federal Labor Government has pointed the finger at Qantas, claiming its Same Job, Same Pay legislation is designed to stop such companies skirting existing bargaining agreements. Mr Harbison — whose book examining Mr Joyce’s leadership at Qantas is due out later this year — said unions seeking better pay deals would place added pressure on costs. He said the airline was still trying to appeal the court ruling that it illegally sacked its entire ground-handling crew during the pandemic. “You’re going to have the unions wanting more money and different conditions and taking advantage of the fact that [Ms Hudson[ is new to the role and they need to act quickly ... and on the other side you see a softening in demand [for travel],” Mr Harbison said. “She’s going to be squeezed at both ends and so we’re looking at probably a difficult year financially.” Mr Harbison expects the ACCC allegations over the so-called “ghost flights” to add to ongoing criticism of the company. A potential change to the slot system at Sydney Airport and a further review through the Government’s green paper — which will look at market concentration, particularly in the domestic market — could also pose a barrier to Qantas’ secure revenue streams. As well, a new Senate inquiry into the Government’s decision to block 28 extra flights from Qatar is also expected to centre around the role Qantas played in reaching the decision. Some analysts believe change at the top of the airline will help alleviate problems facing the brand. Moody’s Investors Service vice-president Ian Chitterer said Mr Joyce’s decision to leave two months earlier than planned would help Qantas start “afresh”, but outlined the fundamentals of the airline remain strong. “While at a headline level the ACCC allegations have resulted in significant negative publicity for Qantas, we expect Qantas to remain well positioned from a credit perspective,” he said. Qantas in August posted a cash profit for financial year 2023 of $2.47 billion. Its revenue for the period came in at $19.8b — a spectacular jump of $10.7b compared with the prior corresponding period. The major upswing was largely from a rise in ticket prices and high travel demand following the end of pandemic lockdown restrictions.