Next Qantas CEO: Vanessa Hudson

[Quickstatus]

Yes they were.

Ah yes, totally forgot about that one. Thanks
It increased shares by 25%.

 

[HS-TQE]

I doubt we'll see any significant changes in the near future.

It's easy to run an airline when it's making money - the challenge for the CEO is when that stops.

Agreed. Sucessors generally tend to 'steady' the ship in most cases then implement (if any) plans after at least a year in the role.

 

[moa999]

Will Ms Hudson continue the "don't spend capital" mantra?

Big capital decisions are ultimately more Board driven than CEO. I wouldn't expect that to change.

Post automatically merged: May 2, 2023

Anyone have any thoughts on how someone from a finance background will lead the company?

Look at her full background. She has less of a finance background than your typical CFO.

Under Joyce QF execs were continually shuffled to get a variety of experience.

 

[Quickstatus]

ultimately more Board driven than CEO

Contrary i think. The CEO will have a huge influence over capital expenditure. The QF CEO sits on the board

And it's clear Hudson had a major role in successfully traversing Covid financial minefield . If that's not evidence of financial nous, I'm not sure what is.

But all that is for management. I, as a customer, would like to see better customer service -not in the routine of cabin service but in the exceptions of delays and cancellations, and better employee relations. It always causes me as a customer a bit of sadness when employees put on a smile but in reality they are not happy.

 

[RichardMEL]

Who wants change?

I think that's where this thread is divided in two groups. Those not happy with the announcement weren't happy with QF to begin with.

I'm thinking there's much greater risk of QF getting worse with a new CEO, so the internal hire (of someone more than qualified) is a safe pair of hands IMO. I don't think QF's perfect, but when I look at similar airlines over the last 15 years, QF has fared rather well.

I also look at AJ's tenure for the entire time (2008-now), not just since 2020.

You make some very good points and I agree. Vanessa IS very well qualified to continue to sail the ship (er fly the plane) on a steady course. She is very well qualified and as pointed out earlier well grommed for the CEO role from multiple senior positions over the years. No question there.

It's interesting to read some genral comments from the great unwashed on social media - most of them reflect a real hatred for Joyce - and much of that has little to do with his performance as a CEO (and I'll leave it as that). That's not how I feel personally, but there's a mix of tall poppy syndrome, those who clearly dislike him for his sexuality and support of related causes and diversity (and those comments and hate on those grounds appall me to be clear) and a lot of that has tarnished the QF brand as much as the REAL issues the company has had.

I want to focus on those of course - and my disappointment with QF has been the decline over the years in so many areas - service, IT issues, customer care and all of it. Is that all on Joyce? in my view both yes and no. Of course he's not personally responsible for individual decisions that affect us as customers, but does create a corporate culture, and set goals at the highest level that do lead to those decisions - even if they may be based on sound financial grounds or whatever. The perception is always going to be that poor performance of a brand over years is responsibility of the CEO (ie the buck stops here).

but that corporate culture that has been in place over the years is the point for me - and Vanessa is well embedded in that culture. More of the same may work great for the financials and the shareholders/board, but much of the dissatisfaction comes from staff issues (and largely employee relations issues, including all of the outsourcing and so on, have been laid directly at the feet of Alan Joyce). And personally I feel this needs to be areal focus going forward to help rebuild that confidence and specially loyalty and enthusiasm of the staff. Of course other priorities need to be sorting out all of the customer care problems - and by extension have a REAL focus on the IT (get the tools right, much of your customer service problems go away) and taking steps to improve the product for customers (which they have been slowly). Much of these things, of course, require real investment and that's going to be problematic.

Many people are also blaming Joyce for high airfares. I think that's a bit much personally - the high demand environment with supply problems all over the world have caused a lot of this as we all know. Any new CEO is not going to be able to sort these things so easily or quickly. Much of that is market forces too.

I do think the new CEO will benefit from all the new aircraft coming on line - reliability should be much better, and the baggage issues seem mostly (fortunately) behind us so these are good things. Customer Service and IT remain big ticket items and not something fixed overnight unfortunately. I still personally see the staff as a truly core issue. If I was working for them (and despite the longsanding rumours, I never have lol) I would want to feel like the person at the top, and their team, cared about me and wanted to make real and sustained change to make it a place I wanted to work and have pride in - a lot of that has disappeared of late unfortunately. As I've long felt - if you get your staff on side and wanting to do their best, that flows forward throughout the company and customers benefit as much as staff - and that in turn raises the perception and support in the community.

I'm not anti Vanessa by any means - I honestly know near nothing about her - but she does seem well qualified in all things QF. That perspective makes sense.

I would find it hard to find anyone who could not find reasons to be disappointed with QF over the past years (not just 2020+) - specially members of this forum - many of us have experienced both the greats QF can be, and seen when things go so so bad. Even the most ardent fanboy (or person) would have to admit there have been ongoing issues that need addressing. To think otherwise would be putting one's head in the sand. As a P1, I've been spared much of the grief of the long call wait times, the ticketing issues(HBA usually do things right the first time) and so on but knowing that benefit means I absolutely see the effects on most other customers - or just read a few threads here).

I just want the best for QF and hope Vanessa brings some positive but sensible change to the company.

 

[RichardMEL]

Contrary i think. The CEO will have a huge influence over capital expenditure. The QF CEO sits on the board

And it's clear Hudson had a major role in successfully traversing Covid financial minefield . If that's not evidence of financial nous, I'm not sure what is.

But all that is for management. I, as a customer, would like to see better customer service -not in the routine of cabin service but in the exceptions of delays and cancellations, and better employee relations. It always causes me as a customer a bit of sadness when employees put on a smile but in reality they are not happy.

Agree.

CEO would make recommendations to the board for the big ticket items - such as aircraft, infrastructure investment(eg: IT) and the like. That's part of their job at the senior level as the business "expert" on the board. Of course the CEO is themselves advised and supported by the appropriate people below, but at the board level, it's the CEO who will present recommended choices.

 

[Melburnian1]

Ostensibly, the share buyback was to manage "shareholder capital". So one one level the capital return represents excess capital that could not be deployed efficiently (economically) One would argue that it could have been used to underwrite a newer fleet but thats another story. However during the Rona19-21 shareholders were not tapped on the shoulder for capital. Why? because that would dilute the share price and AJ's haul

For me, shareholder benefits should come as a result of efficient and proper company management, not financial wizadry.

You've semi-honed in on the biggest challenge (apart from service to passengers) for this new CEO.

There's lots of QF advertising about 'a new aircraft being delivered every three weeks for the next three years' but how much will this bring down the median age of QFd/QFi planes?

The latter stands at 14 years for the so-called 'mainline' fleet of 75 B738s, 25 A332s/A333s, 11 B789s (that should soon be 12 IIRC) and 8 A388s.

By 30 June 2023, 18 of the 75 B738s will be at least 20 years old (although not every component will be that age).

The A333s were introduced between 31 October 2003 and 20 December 2005 so the youngest is already 17.

What one website calls 'Eastern Australia' has a median turboprop age of 21.3 years: not as bad as ZL, but not exactly built yesterday. That however is a smaller problem, financially speaking for the QF Group.

They may be being maintained well but surely the cost of operating and fixing them must be gradually rising. Are a few spare parts becoming harder, or slower, to obtain once QF draws down existing hangar/warehouse/depot stocks?

Oil prices have dropped (at least in US$) but the cost of operating what is becoming by the standard of major competitors an elderly fleet must be somewhat uncompetitive.

The existing CEO ignored these problems for way too long. Wasn't there a gap of some years when not a single new major aircraft order was placed that ended up with QFi or QFd, not JQi or JQd?

It's outside the scope of AFF but you'd wonder how QF will fund timely replacements to bring the median age down to say seven or eight years. Some rivals with younger fleets are government-owned but there are also private sector airlines with far younger fleets than QFi/QFd.

 

[justinbrett]

I would find it hard to find anyone who could not find reasons to be disappointed with QF over the past years (not just 2020+) - specially members of this forum - many of us have experienced both the greats QF can be, and seen when things go so so bad. Even the most ardent fanboy (or person) would have to admit there have been ongoing issues that need addressing. To think otherwise would be putting one's head in the sand. As a P1, I've been spared much of the grief of the long call wait times, the ticketing issues(HBA usually do things right the first time) and so on but knowing that benefit means I absolutely see the effects on most other customers - or just read a few threads here).

That's very much rose coloured glasses... Always tempting to look back at years of old and think of the "better times", but need to keep things in context - those better times came at a price. It was a lot more expensive to fly back then. Even late 90s air fares adjusted for inflation are much higher than they are now (for Y) - for example I remember my first trip to LHR in 1995 (as a teenager) cost $1500 on NZ Y. That was an unbelievable price at the time - QF was lots more. In today's money, that's about $3000. Even at the peak fares now that's about the high water mark - I expect they will drop in the next 6-12 months as we're starting to see in the AU-US market (thanks to UA!)

QF is still giving out free food & alcohol on domestic flights - AA and BA are BOB in Y. EI is basically a LCC. NZ - the government had to re-nationalise it.

We didn't have domestic J lounges or the high standard international F lounges before AJ.

There's certainly been lows, especially last year - but you can't deny there has been a significant improvement. As I said before, AJ leaves QF in a better state than when he found it.

 

[oz_mark]

What one website calls 'Eastern Australia' has a median turboprop age of 21.3 years: not as bad as ZL, but not exactly built yesterday. That however is a smaller problem, financially speaking for the QF Group.

Eastern Australia Airlines is an actual airline (that operates under the QantasLink banner)

 

[Cognac]

and by extension have a REAL focus on the IT (get the tools right, much of your customer service problems go away) and taking steps to improve the product for customers (which they have been slowly). Much of these things, of course, require real investment and that's going to be problematic.

I agree very much with the statement that they have to have a REAL focus on IT. The Qantas system is terrible (possibly by design, but never assign to malice something that can be explained by incompetence). I just don't think that investment should be problematic for a company that just recorded $500M profit. Overhauling their IT system might take time (probably a multi-year project tbh), but it is an investment.

I don't know who is to blame for the lack of investment so far - Joyce or the establishment. Either Joyce was against IT upgrades, or he was ambivalent/not for it enough to push it through a resistant cohort.

The absolute garbage IT system is partly to blame for brand reputation and customer satisfaction (booking reward flights couldn't be easy now, could it?) that Hudson says she wants to focus on. So she will, at some point in her tenure, have to make a decision on how to bring Qantas into the now times, rather than continuing to add even more heavy cinder blocks to the top of a teetering pile of 90s and early 2000s hastily carved stones.

 

[RooFlyer]

And why wouldn't they. QF is making huge profits.

Say what you will about AJ - but he's leaving QF in a much better place than when he found it. In his early years they were talking about the possibility of QF becoming a domestic only airline - or the merger with BA to stay afloat.

QF has made a huge profit in the past year because of the slash and burn attitude of the management, led by AJ. We all know that the customer experience has plummeted in the past few years, but fortunately for the airline, pent-up demand has smoothed out things. AJ would argue that his first duty (after regulators) is shareholders, and as someone living off my shares etc I have no problem with that. But its the shareholders after he leaves that also should be considered in the present. Damage the brand and then a reckoning will come for shareholders and whether or not the airline is better than when AJ came in remains to be seen..

I think quoted comments by the incoming CEO shows she recognises that she's been handed a massive repair job.

Who wants change?

I think that's where this thread is divided in two groups. Those not happy with the announcement weren't happy with QF to begin with.

Who wants change? Well, the customers for one! How about a change in the call centres etc etc etc. "Who wants change?" is a comment made by someone completely oblivious to what's happened to the airline over the past couple of years and, more importantly, what it means for the airline going forward.

Those with QF's interests at heart (yes, such as me) want the airline to succeed - but that means in the long term, not slash and burn so an outgoing CEO can declare huge profits and then exit stage left (with nicely vested shares and options).

I find it mildly amusing that Ms Hudson is focusing on restoring the brands image and improving the customer experience. I know there's the context of "since covid" in that, but it does kind of imply that her predecessor did not focus on either of those things.

Doesn't imply - shouts it out! She, at least, recognises the issue.

 

[TiredOldFlyer]

I understand that Qantas shares have gone down since A.J
announcement. My first reaction was that they probably should
have gone up but then I realised that A.J's payout may cause
liquidity problems !

 

[Melburnian1]

As I said before, AJ leaves QF in a better state than when he found it.

If an older fleet is "better", yes. But many may disagree.

 

[TiredOldFlyer]

If an older fleet is "better", yes. But many may disagree.

Some will mourn - some will re-joyce.

 

[AIRwin]

btw I wanted to add to my above comments about VH (hey, that's our registration prefix )....

VH-CEO

 

[Hvr]

Some will mourn - some will re-joyce.

I doubt anybody will want to re-joyce. Rejoice maybe, but for what it's Wirth, they won't want to re-joyce.

 

[UP4014]

And why wouldn't they. QF is making huge profits.

Say what you will about AJ - but he's leaving QF in a much better place than when he found it. In his early years they were talking about the possibility of QF becoming a domestic only airline - or the merger with BA to stay afloat.

When you need instant action and board support create a crisis like a merger with a foreign flag.

 

[Quickstatus]

some will re-joyce

I think the only people who want a re-joyce are the shareholders and the board.

Lets not forget the departure of the CEO of QFd/i/f Andrew David in Sept
And of course the new CFO has not yet been announced.
So there will be a bit of change in the executive ranks

The other factor that has bolstered QF is that VA2.0 does not want to or cannot compete on price because that would dilute the value at any IPO.

 

[justinbrett]

I find it mildly amusing that Ms Hudson is focusing on restoring the brands image and improving the customer experience. I know there's the context of "since covid" in that, but it does kind of imply that her predecessor did not focus on either of those things.

Not sure you listened to her comments in context.

IN FULL: Qantas announces Vanessa Hudson as CEO Alan Joyce's successor | ABC News

Vanessa Hudson will take over the reins at Qantas, when Alan Joyce retires in November. Subscribe: http://ab.co/1svxLVE Read more: https://ab.co/3LnQ2W2ABC N...

www.youtube.com

"We've invested an enormous amount of money to getting the performance back to where it needs to be... and it is back".

I think some on here are imagining her criticism of AJ and the QF brand. I'm guessing they didn't watch the PC in full.

 

[ADFlyMore]

I’m on the fence, part of me thinks great appointment in a tenured employee who knows every bit of the QF business internally and has risen through the ranks. Great effort and commend her on that. But there are also negatives to this.

Other part of me thinks an outsider may have been a better option as I feel QF need to shake things up to build back their brand.

Businesses tend to forgot they are in business to serve their customers (putting aside that the boards job is to bring profit to shareholders for a moment). I feel they have forgotten that their customers matter.

Time will tell (or time over 5 years)