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QANTAS: Alan Joyce the controversy gift that keeps on giving and the future under Vanessa Hudson

QANTAS: Alan Joyce the controversy gift that keeps on giving and the future under Vanessa Hudson

If you thought all the Qantas controversy would end when the front door hit ex-CEO Alan Joyce on his way out, then you were wrong.

It seems like he is the gift that keeps on giving.

Australian Financial Review

The AFR reports that physical copies have been sighted in the Chairman’s Lounge again. Digital copies are available via Qantas WiFi. You may remember, I wrote back in May ’23 that the AFR was removed from Qantas lounges after Alan Joyce and chairman Richard Goyder’s complaints. Called ‘rationalisation’ of available media at the time, it was apparent retribution, which, fortunately, new CEO Vanessa Hudson has reversed.

a man in a suit and tie
Alan Joyce, Qantas ex-CEO [A Current Affair]

Alan Joyce share sales after Qantas notified of ACCC cancelled flight sales investigation

It turns out that Qantas approved the sale by Alan Joyce of AU$17 million worth of shares five weeks after it had received a detailed demand for information from the ACCC.

The AFR has confirmed that a notice was sent by the ACCC, indicating the wrongdoing they were investigating. The 26 April notice requested documents regarding the sale for already cancelled flights. That means the notice was issued five weeks before Joyce sold 90% of his shares, most received as deferred bonuses.

Why did the board and/or chairman approve the sale when it already knew that Joyce could be costing them millions. That’s likely to be a question raised at the 3 November Qantas Group AGM in Melbourne.

a woman smiling for a picture
Vanessa Hudson Qantas CEO [Qantas]

My Prediction

I’ll put my hand up with some predictions. I think Richard Goyder is not going anywhere in the short term but may step down in the next 6 to 18 months. In the meantime, I think there will be some changes at the board level – maybe more directors with airline experience.

There are some short-term gains to be made. Lounge improvements, call centre staff upskilling, and increased service staff should all be possible within 6 to 12 months. Qantas has the money to do that. Improvements in onboard catering and service levels, while costing money, could be achieved fairly quickly. On the whole, contractors don’t mind having their contractors re-negotiated if it involves more product and more money.

The website and app need some substantial work, but technological improvements take time, especially big ones. That might be beyond the 12-month horizon. Qantas needs to re-establish itself as the leading airline in this area. At the moment, Virgin Australia, with its baggage tracking app, looks like the innovator, and Qantas is merely catching up.

That needs to change.

a bar with a counter and stools
Qantas Melbourne First Lounge [Schuetz/2PAXfly]

2PAXfly Takeout

The job Vanessa Hudson, the new CEO has before her is mindboggling, and expensive. She will likely have a AU$250 million fine to pay as a result of the sale of cancelled flights case by the ACCC. Hudson is going to have to lower airfares, given increased competition and the fury of customers, which will go straight to the bottom line.

She will have a massive bill to pay the nearly 1,700 ground staff workers her predecessor sacked. That’s probably going to cost another AU$20 to 50 million. Most of the other problems are going to be solved by employing more people, at higher cost. That works for call centres, service desks, through to lounge and other externally employed staff like baggage and ground handlers and cleaning staff.

And then, of course, there is the massive long-term bill for new aircraft to refresh the fleet. And don’t forget she has Project Sunrise to actually implement rather than just provide PR opportunities, which her predecessor did.

Things are only going to get harder for Ms Hudson.

The debate amongst those in the know seems to be about how fast she will move. Some think she has 6 months to turn the company’s reputation around, while others think she will go for a 3-year plan. It will be a hybrid in my view. Some will be short-term impactful changes and others long-term improvements.

The trick will be to keep the board and shareholders happy (which they are) but also make the customers joyful, which they definitely are not at the moment.

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