There was a certain sense of timing when one of Qantas’ oldest long-haul planes, an A330, was damaged by a pushback tug (used to tow vehicles) in Brisbane on Monday night. It happened just as Alan Joyce was penning his resignation letter as Qantas CEO two months early, handing the reins to his successor, Vannessa Hudson.
The tug was one of a fleet gifted to company Dnata in Joyce’s spree of outsourcing and asset sales, which has left the company “like a skinny dingo, all skeleton and barely alive, just getting by in a long drought”, as one engineer put it. He added that the “fat reserves are all but gone. That is how we feel right now. But there is hope that with a bit of rain, things will turn around.”
It was the second twin-aisle plane — after a belt loader hit a 787 on August 19, according to engineers — that has had major damage inflicted by outsourced, often low-paid and casual staff driving essential ground equipment. “You pay peanuts, you get monkeys,” a Qantas pilot said, adding that such accidents had noticeably increased since Joyce started outsourcing staff and running down on-the-ground resources.
It is this skinny dingo that Hudson must try, somehow, to make healthy once more. And while she has been complicit in the running down of Qantas in her four years as chief financial officer — and 19 years in the finance department before that — the truth is, she’s still been flicked a hospital pass by her old boss.
When Joyce walked out on Tuesday evening, the charade was up. There was nothing left to sell and the pillaging for the greater corporate good was complete. He had sold everything: the corporate headquarters, sold and leased back; all of the catering centres and the revenue that provided food for customer airlines are gone; the airport terminals, gone; large properties of corporate real estate, gone; the last tract of Qantas land in Sydney flogged off by Joyce for $800 million to cover a recent debt crisis.
“Our world-class flight simulators are a shadow of their former selves,” the engineer said. “Joyce wrote down the value of aircraft years back to claim a huge loss on paper, further devaluing Qantas assets. There is nothing left to sell. He gifted all of the cargo loading and ramp equipment to Dnata and Swissport when he sacked 1700 ramp workers. The list goes on.”
The problem for Hudson is that she has been in lockstep with the strategy established by the board and Joyce. As CFO, she was responsible for ripping $1 billion in costs out of the company during COVID, including the unlawful sacking of 1700 baggage handlers in a case now waiting for judgment by the High Court. Hudson promised further cost cuts of $300 million only last month.
In her first video address yesterday, she told staff the company needed to get the “balance right” between customers, staff and the business. “Right now, achieving this balance must first start with our customers, and that’s what we will be focused on with our new management team,” she said. It left many of them cold.
“I can’t help but feel that they cut the cancer out but the metastasis has spread already,” one international pilot said. “I laughed when Hudson said she was confident she could count on the help of employees to show customers ‘why we deserve to be their trusted first choice’. Wait a minute, she was part of the management team that burned the place down.”
A Qantas corporate executive had a similar view. “It was pretty bland. References a new management team, but they are really just internal movements. It’s very hard for new people to come into the organisation at a senior level. And then she thanks Alan … embarrassing and cringy, time to move on. I am not sure she is really a break from the past. Time and actions will tell.”
A Qantas engineer said that the maintenance crew had been in a jovial mood on Tuesday. “But we all wait with bated breath for what the next chapter brings. Everyone lives in hope that Vanessa will finally think of more than shareholders and share prices.”
“What she needs to realise is that she won’t get customers back until she gets the staff back,” another pilot said.
Hudson already has industrial problems looming at the Perth-based Network Aviation (NA), where flight attendants restarted negotiations — on Joyce’s last day at the company — after management took fright after they gained protected industrial action. Management has resuscitated an offer it made earlier in the year, but tinkered with to the point that the attendants had had enough, insiders said.
They are hardly treated well. There are multiple stories of flight attendants being left in far-flung Western Australian towns like Geraldton without overnight accommodation. In some instances, they have been forced to sleep on benches in terminals after aircraft breakdowns, insiders told Crikey. COVID-era cost-cutting has seen all pillows and blankets taken off flights and unreturned.
Network Aviation started life as a mining charter specialist, catering to the countless thousands of fly-in-fly-out (FIFO) workers who operate Australia’s mines. But it has expanded into regular passenger services, taking over routes from Perth to Darwin, and plans to add flights from Perth to Adelaide and Hobart are well advanced, insiders said. Yet it pays wages that are, in many cases, below award, according to comparisons provided by the Australian Federation of Air Pilots.
NA pilots voted this week on their own protected industrial action, and pilot sources say the affirmative vote is expected to be near 100%. A stop work looms as pilots demand the closure of the yawning 40% pay gap between them and Qantas mainline pilots for flying essentially the same single-aisle jets (A320 v 737s). Pilots at two other Qantas regional arms, Eastern and Sunstate, are taking similar action.
Any strike action has the capacity to severely throw a major spanner in the mining sector’s operations — heaven forfend. Gina Rinehart and Andrew Forrest would not be happy with Qantas chair, and fellow Western Australian, Richard Goyder.
So Vanessa Hudson has jumped, going on the front foot and flying to Perth today to meet with NA pilots.
The new CEO’s choice is invidious: ”For her sake, I hope she is not going empty-handed,” one insider said. Pilots at NA have told Crikey they are serious about an initial strike for 24 hours. “But of course, if Hudson doesn’t come empty-handed, then everyone will see that the real threat of industrial action gets results.”
It will be the first of many such choices that will reveal, soon enough, whether Hudson is the change the company needs and customers demand, or simply same shit, different channel.
There is almost a case for starting up a new carrier owned by the government and let this one die. We sould make sure all of Joyces last bonus is clawed back.
Good for smarter Australia good for security and good for sovereinty – democracy is not cheap – They can afford totally uncompetitive tendering elewhere to the tune of billions and delivered in the distant and slow ‘never never’
I note she focusses on COVID as the cause of Qantas’ problems, stating that “We know that post-Covid we haven’t always delivered to what our customers expect …”. It goes back way further than that, and if she is truly determined to fix this basket case she needs to face reality.
And the reality is Qantas has been going downhill for at least the least decade or more. And old fleet, with tired old cabins and poor reliability. As a former Platinum One frequent flyer, I gave up several years ago and have never looked back. Just so much better on pretty much any other airline. Will not be surprised to see other business customers deserting the airline – particularly on reliability issues.
And now poor Hudson has to cope with increasing mechanical issues due to the ageing fleet and exacerbated by run-down spare parts inventory while trying to fund an urgent need for fleet renewal. Add to that the legal issues and high levels of customer and staff dissatisfaction, and the financial engineering that produced a few profits at the expense of the long term survival of the company and you have a train wreck.
The damage caused by the trashing of the brand will not be solved in a year or two or three. The question is can the company survive in the interim?
I wonder how many new aircraft could have been bought with the money spent on share buybacks in recent years?
The money could have at least paid for restocking a few pillows and blankets for on-board staff. That level of penny pinching is astounding.
But then the hosties would have nowhere to stash their swags on the Geraldton leg.
As the chief bean counter at Qantas for decades, she was up to her armpits in the financial gutting. If she really wants to fix the basket case, she should follow Joyce out the door and take the entire board with her.
agreed
I don’t often quote the Daily Telegraph with approval, but it was exactly right to describe this as ‘issuing platitudes’. Nobody ever said they had to “get the balance wrong”. And how likely is it Joyce would say, and quite possibly believe, that his choices did get the balance right? If this sort of empty waffle is all Hudson has to offer there’s no hope for Qantas. It certainly does not tell us anything about her intentions.
Actually I think it does tell us about her intentions – more of the same.
I agree – nothing here to indicate radical change – and radical change is needed if this disaster is to be reversed.
I can see a hefty bonus on the horizon for Hudson…stuff the customers!
He has a grotty mouth literally sickening
another poor daft bird gets a rotten neo lib basket case and poisoned chalice
Who could have confidence in a QANTAS improvement, sooner or later? It’s a skinny skink when it needs to be Melbourne Cup fit and fast. Do not forget that Murdoch gutted the old Ansett in similar ways and it died…
In answer to the headline: Yes because Qantas operates in an oligopoly.
The Qantas’s corporate scandal is being played out (and we are being played) in the exact same way as other corporate scandals.
Quick recap;
– the financial services knowingly sold fraudulent products and brought down the global economy (multiple times over the years) and faced ZERO consequences;
– the tobacco industry knowingly sold an actual poisonous, addictive product AND lied about it for decades and faced PRACTICALLY ZERO consequences;
– the fossil fuel industry has knowingly sold an actual planet destroying product AND lied about it AND scuppered every attempt by humanity to save ourselves for decades and will face PRACTICALLY ZERO consequences.
– the big 4 banks announced record profits after the royal commission commission and even after rate hikes that actually fuelled their profits.
Faced with this absolute hopelessness we latch onto “repetutational harm” as a kind of almost semi-religious belief in penance.
But reputational harm is irrelevant to most large corporations because they’ve already cornered the market.
Customers in general can’t and don’t leave so there’s no tangible loss.
While the MSM create outrage about street crime.
Whilst the MSM get excited about a female CEO.
I’m sure Qantas will start campaigning for the Voice and climate change and then everything will be back to normal again.
Yeah give the neo lib sheilas usually get a leg up on a poisoned chalice – its a hollowed victory – rolled up with supposed left and right bully boys playing witch hunts all the while just to irk progressive karens keeping our humour and distance
sic ; neo lib sheilas who usually get a leg up with the bad posts; Qantas post Joyce, Social Services and Environment but having to agree to lobbyland opportunist middle men