Qantas’ new chief executive has seen the boom times, but it was the deepest lows through Covid-19 — when the airline was just 11 weeks away from administration — that delivered her biggest test.
As the chief financial officer through some of aviation industry’s worst years, it was on Vanessa Hudson to respond to the vaporisation of $18bn in revenue while Qantas was quickly bleeding cash.
After a global and closely contested internal search, Qantas’ board has named Hudson as its new CEO, its fourth in only three decades. She takes charge after Alan Joyce’s marathon ride, with the long-term airline boss who for better or worse has become a household name, planning to step down in November.
After more than 15 years in the role – one of the longest recent CEO stints for a top ASX company — Joyce had planned to step down towards the end of this year, with the Covid-19 recovery now well behind the airline.
The move marks the second CEO appointment in as many days for Qantas chairman Richard Goyder, who this week named new AFL boss Andrew Dillion to take over from Gill McLachlan after another extended search.
The appointment of Hudson also marks the assertion of Goyder prevailing in getting his preferred candidate in place over Joyce’s front-runner, the Qantas frequent flyer boss Oliva Wirth. Both women were subjected to intensive interviews rounds and asked to present their long term vision for the airline.
It underscores Goyder’s frustratingly methodical approach to appointing CEO’s, including his long delayed search for Woodside chief Meg O’Neill two years ago. In each case, Goyder has opted for an internal candidate to take charge.
Goyder, a former chief of Wesfarmers, remains unapologetic. “The most important thing boards do is hire and fire the CEO and I take that my responsibility as chairman very seriously,” he tells The Australian.
“I’ve put an enormous amount of time into these appointments because I think they’re incredibly important. And I feel very confident that we make good decisions,”
Also in the race for the Qantas job was international boss Andrew David, who pulled out in February by his flagging his retirement. Former Jetstar boss Gareth Evans, and one time international and freight executive was seen as the most serious internal contender, but also bowed out last December.
Unusually, Wirth was called out during an investor briefing on Tuesday by Goyder who described her as being an “outstanding candidate”. Large corporates nearly always prefer to keep the often brutal CEO selection processes out of the public eye.
In total, Goyder considered nearly 40 potential candidates to take over. Not all of these local and internation options made the serious sounding stage, but he ultimately settled on an executive who is already deeply invested in the existing strategy.
And it was Hudson that faced the biggest test for any potential CEO — when through the depths of the Covid-19 pandemic, as border closures forced the grounding of aircraft, it was on her shoulders to effectively save the airline.
Hudson’s small team was responsible for raising the cash to keep Qantas alive. Through this, she tapped shareholders for a $1.4bn equity raising at a time when investors were fleeing airline stocks. She also organised $4bn in borrowings, many of this secured against aircraft when there were real questions over whether they’d ever fly commercial service again.
She says the decisions made through Covid-19 – including Joyce’s call to axe 9000 jobs – “wasn’t for the faint-hearted”.
“I think I could say that coming through that experience was probably the best training that I could ever have,” Hudson says.
A mother of two adult daughters, Hudson is a Qantas lifer, rising through the ranks over nearly three decades. The UTS graduate joined the airline over a number of financial and accounting roles. Through her career holding a number of top administration jobs across all parts of the airline, including the crucial chief customer position which covers revenue and passenger experience.
The one question she is set to face in coming weeks is that airline CEOs have tended to come from operational areas that directly oversee the day-to-day running of an airline. However, the nature of modern aviation is as much about getting the financing, technology and customer facing roles right, and a team of strong operational executives will sweat the small stuff.
Hudson took charge as chief financial officer in October 2019, taking the role just as Covid-19 was about to up-end the global aviation market.
As well as organising the financial survival, Hudson was on the hook for a long-term Covid-19 fightback plan. Even as Qantas aircraft were still stuck on the ground, she made the business case for the airline’s long-term future.
Here she argued to move ahead with the ultra-long distances planes for Project Sunrise as well as a massive domestic and international fleet overhaul with nearly 120 new Airbus planes progressively being delivered over the coming decade in a mega-deal worth $5bn.
Now Hudson’s biggest challenges relate to the substantial growing pains coming out of the Covid-19 recovery and balancing a need for more investment in the airline to improve service against shareholders demands for a return to dividends.
After years of Joyce having a firm grip on the controls, Hudson will bring a different form of leadership to Qantas’ Mascot headquarters. Those that have worked with her describe her as collaborative and moves with clarity in solving issues. She has been part of the powerful group executive committee for the past five years where almost every major operational decision has landed.
“I think that it’s really important as a leader that you listen, but then you act decisively and you act quickly,” she tells The Australian.
“And what I learned during Covid-19 is how important that learning loop is because in managing through that period we were making many decisions in a continuous way”.
“Not all of those decisions were right. But being a strong leader also requires you to recognize when you need to pivot and you need to learn. And I think that was an incredibly valuable lesson for me,” she says.
She wants to be an “approachable leader” and someone who empowers every one of Qantas’ 20,000-plus staff to be the best they can be.
Simon Mordant, the executive chairman of Luminis Partners who worked alongside Hudson as a corporate adviser through the Covid-19 capital raising said Hudson showed what it takes to be a leader through the crisis.
“She moved quickly and decisively,” Mordant says. “She assembled a team. They did the analysis as to what the options were, and how much capital was required. She did that in a very difficult environment. So she was very calm throughout. She’s a very humble person, but also a very empathetic person”.
“From my perspective, she’s going to be a great leader, obviously different to Alan. But I think she will bring her own perspective and take the airline forward through to the next period,” he says.
Customers are still frustrated at the bumpy start-up out of Covid-19 including capacity constraints, ticket prices and cancelled flights. She also faces a reinvigorated rival in the form of Virgin Australia, whose private equity owners are looking for a quick sharemarket listing where profits will be front-loaded.
Global competition continues to rise as other airlines continue their Covid-19 restart, putting pressure on Qantas’ international arm, where margins are regularly wafer thin.
Most importantly, powerful transport unions will be quick to try and assert their dominance again with the looming exit of Joyce, who has managed to outmanoeuvre them over his tenue.
Elsewhere, a CEO transition is also a trigger for turnover among senior staff. Hudson says she has spoken with Loyalty boss Wirth in recent days and “absolutely want to see her as a part of Qantas into the future”.
Qantas shares were sold off nearly 3 per cent Tuesday, with Joyce widely seen as a better friend to shareholders than passengers during his time as chief. Indeed there are few corporate leaders in Australia that may find him hard to match in this regard.
Joyce’s hard-running of Qantas – including tackling unions head on when he grounded the fleet more than a decade ago – has seen costs ripped out, routes become more profitable and billions returned to investors. After years of staying on and on, investors now have a hard exit date for their trusted CEO.
johnstone@theaustralian.com.au
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