Qantas faces gruelling 18 months to get back on track: chairman

Australia’s flying kangaroo needs 18 months to get back on track following Alan Joyce’s long and rocky tenure, declares chairman John Mullen.

Qantas faces an 18-month wait for the new aircraft needed to lift standards of service and on-time performance after a decade of under-investment in its fleet under former CEO Alan Joyce.

Chairman John Mullen says the airline is “starting to get its mojo” back after the operational and strategic problems that led to Mr Joyce’s early retirement in September 2023.

Mr Joyce’s successor, Vanessa Hudson, last year reached a $100m settlement with the Australian Competition & Consumer Commission for misleading consumers over cancelled flights.

Mr Mullen, who has led the board for six months, said the airline was behind on the delivery of new aircraft, which was affecting the customer experience at a time when demand for air travel was strong. This was delivering desirable financial returns but contributing to delays and frustrated passengers as mechanical problems interfered with its schedule.

He said the company’s new board and management were “drawing a line in the sand” on the issues of their predecessors.

“We are rebuilding the board, we have a great management team, and we have a super chief executive in Vanessa Hudson,” Mr Mullen told a forum in Sydney on Tuesday.

“She’s not a chip off the old block of the past.”

As Qantas undertook what he said was the “most ambitious capital investment program in its history” with new aircraft, Mr Mullen said national pride was at stake.

“There is an absolute requirement on us to get our act together and ensure it becomes a respected brand for the company and its shareholders but also for the ­nation,” he said.

Qantas needs another 18 months to get back on track following underinvestment. Picture: iStock

The company earned a $923m net profit for the first half of the 2025 financial year and paid its first dividend to shareholders since 2018-19. Its shares traded at a record $10.37 earlier this month. The stock tumbled 8.9 per cent to $8.87 on Tuesday.

Qantas’s ageing fleet “should have been replaced earlier”, but could not be because of problems in getting the planes from the manufacturer, according to its chairman.

“Unless you’ve got a lot of spare capacity, that cascades down through a whole lot of flights,” Mr Mullen said. This exposed Qantas to the accusation it was making good profits but “the service is crap”, he admitted.

“We need to have another year or 18 months of the new aircraft coming on to start to deserve the respect that hopefully we will generate,” he said.

Qantas has 24 A350s on order, with half assigned to the new Project­ Sunrise flights, now scheduled to begin in 2027, and the other half to take over from its A330s and A380s towards the end of the decade.

The new capital investment program would “really start to transform things and increase capacity,” Mr Mullen said. But Qantas had to work on restoring its standing with the Australian public. “You can’t take reputation and respect for granted,” he said. “There are still a lot of people out there who are disappointed by what happened to Qantas.

“On the one side, it is a business and you are there to manage governance and shareholder returns and all the things you have to do with the business.

“But on the other side, you have a huge social responsibility for Qantas as part of the fabric of Australia.

“Even people who have never been to Australia have heard of Qantas and they see it as a little bit of our identity.”

Mr Mullen said the Qantas board and management had changed and had “hopefully got our feet on the ground”.

He described Ms Hudson as a great leader who “is a very down to earth, humble person who is very much her own person and makes her own decisions”. Ms Hudson was previously Qantas’s chief ­financial officer and has worked for the airline for 31 years.

Mr Mullen, a former chairman of Telstra, told the Australian Institute of Company Directors forum that directors and CEOs should limit their terms to between five and eight years.

“I was at Telstra forever and I could have gone on for another decade, but I thought to myself, it’s time,” he said.

He said boards and companies should “follow the old adage” that the time to prune a tree was when it was green and not when it was dead.

There were situations where companies had a “brilliant founder” who could go on for a long time, but he said: “For mortal employees like myself, I reckon that five to eight years is enough.”

Qantas boss Vanessa Hudson in Melbourne Picture: Luis Enrique Ascui/NewsWire

An inquiry into Qantas’s governance written by adviser Tom Saar and published in 2024 found that it was unusually deferential to Mr Joyce and enabled a top-down leadership style, “leading to in­sufficient listening and low speak-up”.

As well as its $100m ACCC settlement and $20m set aside for customer remediation, Qantas was found to have illegally sacked 1800 Transport Workers’ Union members who were last year awarded a record $120m in compensation.

The airline’s 10 20-year-old A330s will start going into the shop from mid-year for much-needed seat and touchscreen replacements in economy.

Business class suites will remain untouched, however, as Qantas seeks to extend the life of the aircraft until the arrival of new A350s and Boeing 787s. At the first-half result announcement, Ms Hudson revealed a further delay in the arrival of the first A350-1000 to late 2026.

On the domestic front, the fleet situation is just as grim, with Ms Hudson announcing a plan to stretch the life of 42 Boeing 737s by upgrading the cabin, to be on par with new A321XLRs, arriving from June.

The strategy is designed to overcome the problem of only having firm orders for 28 A321XLRs, to replace a fleet of 75 Boeing 737s.

Ms Hudson has suggested travellers will not know the difference when they board a 12- year-old 737 as opposed to a new A321 with ­capacity for 197 passengers, following the cabin refurbishment. Qantas is also taking delivery of 29 new A220s to replace Boeing 717s that were retired last year.

It is quite the juggling act for Ms Hudson, who said last year that airlines could not succeed without fleet renewal.