New Qantas chair tackles Alan Joyce ghosts of past to move airline forward

Conditions are good now, but when they inevitably turn negative, this will test the airline’s commitment to changing its ways.

New Qantas chairman John Mullen with former chair Richard Goyder and Alan Joyce.

John Mullen wants to draw a line under the deeply troubled Qantas of last year.

However, to do this, the new Qantas chairman has paid tribute to the two men responsible for the string of reputational hits, serious legal headaches and governance mistakes the airline is working so hard to fix.

The former Telstra chair has experience overseeing big brands that have faced immense pressure. And while its usual to highlight a former CEO under a previous chair – particularly one who left under a cloud – Mullen believes the only way to move forward is to recognise the past.

This includes calling out the contribution of former chief Alan Joyce and former chair Richard Goyder during his first formal meeting with shareholders.

Speaking at the airline’s annual meeting in Hobart, he pointed out Joyce’s 15-year tenure delivered many years of exceptional results. He also noted the former chair and CEO steered Qantas through the tough years of groundings during the Covid pandemic.

“Without their leadership, Qantas might well have not survived, and we might not all be here today,” Mullen said.

Qantas chair John Mullen at the airline’s AGM in Hobart on Friday. Picture: Nikki Davis-Jones

More sensational revelations about Joyce are likely in coming weeks, with a book set to be released examining his time at the airline. Part of this will include Joyce’s close relationship with Prime Minister Anthony Albanese.

Mullen’s job now is to play the airline forward. And he laid out an ambition for Qantas to resume its place as “one of the truly great airlines of the world”. However to fully realise this aspiration could take years.

Importantly, Mullen has been given the best possible starting point to keep his chief executive Vanessa Hudson focussed on a change agenda needed at Qantas.

The airline is through the worst both financially and reputationally and now it gets the glow from dozens of new aircraft arriving this year. More work needs to be done in lifting customer satisfaction, although measures have improved over the year. On time performance is improving as capacity and staffing improves.

After years of heavy losses, the balance sheet largely been repaired. And investors are enjoying a share price that is up 55 per cent since the last annual meeting, with shares now trading at a fresh record high. And during the meeting, Qantas issued bullish first quarter figures, underpinned by its discount Jetstar unit, lower fuel prices and strong broader demand for travel. This means the airline is mining cash and it needs to move fast.

Qantas chief executive Vanessa Hudson speaks as she stands in front of a new Jetstar and Qantas Airbus A220 aircraft earlier this year. Picture: AFP

Mullen says Qantas should be in a position to start paying dividends again in June half year, a symbolic moment that financially at least puts the pandemic totally behind it. Shareholders haven’t totally been left out during this period, Qantas has spent nearly $1.3bn on share buybacks over the past two years.

Elsewhere, there’s more spending on customers to come with a new refurbishment program outlined Friday of the A330 fleet, which covers short haul international and east coast to Perth flights. Even with industrial tensions still simmering, Qantas threw in a $1000 bonus to all non-executive staff. Compared to last year, shareholders and customers are more happy.

After last year’s stinging rebuke from investors where the airline copped an 82 per cent protest vote against the remuneration report, proxies lodged with the airline ahead of Friday’s meeting showed it was comfortably supported – avoiding a damaging spill of the board positions.

The investor “no” vote on remuneration is still running around 14 per cent, showing there’s more work to be done to get the number back into the single digits. Mullen, however, won overwhelming support from shareholders for his election as chair despite his heavy board workload outside Qantas, More board renewal is coming, Mullen added.

Great ambitions

The new chairman gave his strong support for chief executive Hudson and

Still, it’s going to be a balancing act. Conditions are good now, but when they inevitably turn negative this will be a test to see if Qantas has changed its ways. Mullen acknowledged he won’t always get it right.

As it tries to win over shareholders, customers and staff all at the same time, one of these groups is going to feel like they’ve been left short-changed. Unions have been emboldened by Qantas’ vulnerability of the past year and despite vocal protests, their window to push harder for higher wages is fast-closing.

Mullen cautioned as much, setting the ground rules for future wage negotiations. Qantas needs to generate “solid profits” to continually invest in staff and customers, new planes and growth opportunities, he says.

Vanessa Hudson at the Qantas AGM in Hobart. Picture: Nikki Davis-Jones

Other clouds on the horizon include how the Albanese government approaches the shareholder planned tie-up between rival Virgin Australia and Qatar Airlines. This will bring more international competition into Australia and this is where Qantas is most vulnerable given the thinner profits that run on offshore routes.

Although Mullen hasn’t run an airline, he has been around the industry in one way or another his entire life.

Both parents were pilots, and his father flew with the Royal Air Force and later Ireland’s Aer Lingus. In running transport majors TNT and DHL this also involved overseeing a fleet of aircraft including wide-bodied freighters.

What Mullen didn’t mention is he also a highly-experienced sailor, a passion that has taken him to all corners of the world, including through some pretty rough oceans. And this experience will be invaluable.

Whether it’s in the air or on the ground, in aviation, conditions can change in an instant.

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Originally published as New Qantas chair tackles Alan Joyce ghosts of past to move airline forward