Qantas chair John Mullen pledges clean slate after ‘mistakes’ of Alan Joyce era

New chair John Mullen has sought to draw the curtain on the Alan Joyce era, vowing to move on from ‘serious mistakes’ while defending the airline’s close relationship with Anthony Albanese.

Qantas chairman John Mullen has sought to draw the curtains on the Alan Joyce era, vowing to move on from his “serious mistakes” while defending its ongoing close relationship with Prime Minister Anthony ­Albanese.

Conducting his first AGM at Qantas since replacing Richard Goyder as chair in September, Mr Mullen made it clear he was not there to trawl over past mistakes any more than necessary.

High-profile errors by the airline giant included the illegal outsourcing of almost 1700 ground handling workers, the sale of thousands of tickets on already cancelled flights, the mismanagement of Covid travel credits and support for the divisive referendum on the voice.

The Qantas chair said it would be hard to find a company with as much change in its senior line-up as Qantas, with a new chair, new board members and a largely new management team.

“There were mistakes made, a lot of mistakes and serious mistakes and that is fully acknowledged,” Mr Mullen told the meeting of about 150 shareholders in Hobart.

“Believe me there’s a new team now that’s going to take the company forward and hopefully right the wrongs of the past.”

Qantas chair John Mullen addresses the AGM in Hobart. Picture: Nikki Davis-Jones

Chief executive Vanessa Hudson also reflected on her role in the final year of Mr Joyce’s reign conceding she was “part of the leadership team that managed through a very difficult time in the pandemic”. “We made some decisions that we needed to learn from and we have made changes as a result of those learnings,” Ms Hudson said.

“I am absolutely prepared to be held accountable for the actions and decisions I take as the CEO for the last 12 months and also going forward.”

Qantas’s relationship with Canberra came under close scrutiny last year when the government denied Qatar Airways’ request for more flights into Australia in a decision seen to benefit Qantas and partner Emirates.

Ms Hudson said she was firmly focused on the future, and downplayed the likely impact of a book by journalist Joe Aston released next week which examines Qantas’s cosy relationship with government.

“The one thing I know about the book is that it’s going to reflect on the period post-Covid and I have reflected publicly on that myself – that we didn’t get ­everything right and we’ve learnt from that, and I think that’s really important,” said Ms Hudson. “But my focus now is looking forward and making sure that my role as a leader is to keep my leadership team focused on the future, and focused on our ­people.”

She said it was not inappropriate for a CEO to have a “direct line” to the Prime Minister, saying for Qantas that sort of access was necessary.

“With the amount of employment and the contribution we make to the economy, we play a very important role for Australia and for the economy and I think we should be speaking to our elected officials about what’s coming,” Ms Hudson said.

Qantas CEO Vanessa Hudson at the airline’s AGM in Hobart. Picture: Nikki Davis-Jones

“Whether it’s sustainability, whether it’s about repatriating Australians, that’s all important. It’s important for the Australian national interest.”

Shareholder Chris Maxworthy complained that five board members remained from Mr Joyce’s time and suggested there was need for greater “atonement” to exorcise the “ghosts of Alan Joyce”.

“The airline became the personal play thing of his own and unfortunately all of (the board) was missing in action,” said Mr Maxworthy.

He also raised the issue of Mr Joyce’s remuneration in the 2024 financial year, with the former CEO pocketing $3.4m for two months’ work.

“I would suggest that of that $3.4m, of which $3m was long-term short-term incentives, that should be rescinded,” Mr Maxworthy said. “Alan Joyce deserves only a salary in my view.”

Mr Mullen pointed out that the board had deducted $9.4m from Mr Joyce, which was “the most severe measure we could at the time”.

The topic of Qatar Airway’s proposed 25 per cent stake in Virgin Australia was also raised, with Mr Mullen insisting Qantas would not oppose the deal.

But he did offer a warning to regulators examining a “wet lease arrangement” that would see Qatar Airways double its flights out of Australia after being denied additional traffic rights last year.

Under the arrangement, Qatar would use Virgin Australia’s rights to fly its own Qatari-crewed aircraft on services from Sydney, Melbourne, Brisbane and Perth to Doha.

Mr Mullen said he expected regulators to assess the deal “in the context of Australian jobs and employment, the effectiveness of Australia’s air services framework, and the appropriateness of wet-leasing arrangements over the medium to long term”.

Ms Hudson was also asked about the arrangement and how she might approach the issue with government.

Former Qantas CEO Alan Joyce. Picture: Bloomberg

Speaking outside the AGM, Ms Hudson said the government needed to “consider carefully the implications of what the deal meant for the integrity of Australia’s traffic rights system, as well as the longer-term impact on employment and employment regulations”. “We’re sure the government is going to weigh that up and we think that’s appropriate they do consider all of those things,” she said.

“Our own focus will always be to deliver to our customers what they expect from us and we think our ability to compete will only be strengthened by the new aircraft that are coming, and the A350-1000 will be able to fly non-stop over the Middle East.”

“The Chairman’s Lounge” by journalist Joe Aston was much anticipated by airline industry insiders, and Mr Mullen said he expected it would be “compelling reading”.

“We don’t know what Joe is going to say,” said Mr Mullen.

“We may not agree with everything, but we’ll certainly listen to him. And I’m sure there’ll be further lessons that we can learn and act on.”

All the resolutions put to shareholders at the AGM in Hobart were passed, although some attracted a significant protest vote.

Just over 14 per cent of votes went against the remuneration report, which was not enough for a “second strike” but still demonstrated some dissatisfaction with the executive pay and bonus structure.

Mr Mullen’s election received support of 88.26 per cent of the vote, and long serving director Tony Tyler won 87.7 per cent support, while new director Nora Scheinkestel attracted 98.5 per cent in favour.

Ms Hudson’s participation in the long term incentive plan was also overwhelmingly backed, assuring the CEO of significant bonuses provided key performance indicators were met.

She said they were continuing to make improvements, particular in the customer area and planned to hire another 2000 people in the year ahead.

“I think (improvement) is about consistency, it’s about on-time performance and reliability and the fleet health that supports that to enable us to hit the targets,” Ms Hudson said.

“We have got to continue to invest in our digital capability, make sure our customers continue to have control in their hands and we’ve got to continue to renew our fleet.”

Before the AGM, Qantas provided a market update to the ASX outlining the strength of the domestic sector which was exceeding guidance provided in August.

The airline’s fuel bill was also expected to come in lower than forecast for the first half at $2.55bn, from the August estimate of $2.7bn.

Low-cost partner Jetstar was performing ahead of expectations due to stronger than expected demand, and Qantas Domestic was seeing improvements in load factors and corporate travel year on year, it said.

As a result group domestic revenue per average seat kilometre (RASK) was expected to increase by 3-5 per cent in the first half of the 2025 financial year, above the 2-4 per cent forecast provided in August.

Investors responded favourably to the update, with Qantas shares climbing above $8 for the first time in history, closing at $8.03.

Originally published as Qantas chair John Mullen pledges clean slate after ‘mistakes’ of Alan Joyce era