Stunning admission at Qantas AGM reveals why board just doesn’t get it

Qantas chair Richard Goyder and chief executive Vanessa Hudson at the AGM in Melbourne on Friday. Picture: Luis Ascui

If it weren’t for the fact that Vanessa Hudson is practically a Qantas lifer, she might just be wondering why she took on the job of chief executive.

It was a downcast Hudson who fronted her first annual general meeting as the boss of Australia’s biggest airline; just in time to hear the wrath of customer shareholders, the airline’s first ever strike against a board motion and to experience a significant vote against her own remuneration package.

Hudson comes into the role at a time when Qantas stakeholders are angry. Deservedly so. The airline is in court accused of selling tickets on ghost flights, has been found to have illegally fired its baggage handlers, tried to screw customers with flight credits after it shut down its operations during the pandemic, and has been blaming others for its missteps the whole way.

All the while it’s been charging record high prices for airfares, lobbied the federal government to stop its rival, Qatar, from increasing its services and just notched up a record $2.47bn profit.

The airline feared a fiery AGM as a result, but most of the sting had already come out of the tail with the earlier-than-planned exit of former CEO Alan Joyce and the announced early departure of chairman Richard Goyder.

Perhaps fearing the worst, it was a reserved, eyes-downcast Hudson who presented at the meeting in Melbourne; in sharp contrast to the energetic and sometimes acerbic nature of Joyce, and Geoff Dixon before him.

The airline received its first ever strike against its remuneration report and Goyder, who does a remarkable job of saying he’s sorry for the Qantas missteps without in any way appearing to mean it, described the strike as a “very clear message from shareholders”.

Of the two directors up for re-election, only Todd Sampson suffered a significant protest vote against him and only 66 shareholders showed up in person.

And so Hudson sat quietly as Goyder – a man leaving the chairman’s seat early by popular demand – ran the show, shutting down one shareholder’s questions, to the cries of “shame on you” from the audience, and flicked off questions from others.

The AGM was not the disaster Qantas may have feared, but also showed the people running the airline continue to be out of touch with the realities facing their customers.

A clear case in point: only one board member flew international economy over the past 12 months.

The issue was raised by a shareholder who described a recent flight to the US in economy as “chaotic”. Only Tony Tyler, who has sat on the Qantas board since 2018 and was formerly the CEO of Cathay Pacific, had flown in the back of an international flight, and it is unknown whether it was short or long haul.

It’s a fair bet that had the question been expanded to the past 10 years, and included the Qantas executive committee as well, the answer would not have been much higher.

The Qantas chairman, CEO, plus their significant other and children under 26 years old, all receive four international flights – at the front of the plane where tickets currently cost more than $20,000 – and 12 domestic flights per year.

Marketing guru and Qantas board member Todd Sampson at the AGM on Friday. Picture: Luis Ascui

Non-executive directors do it a tiny bit tougher with only three international flights and nine domestic flights per year, a perk that continues after they’ve left Qantas for the same period of time that they served on the board.

All of the directors have a special customer service number to call to book their flights, rather than needing to wait on hold with the paying public.

Qantas executive committee members are scaled back slightly, to two international and six domestic flights per year – also applicable after they leave – for the same period of time that they worked at the airline.

It’s an obvious perk for the airline to give and of course it makes sense, but it also helps explain why the airline has flown itself straight into an ongoing customer service disaster and failed to read the room as dissatisfaction boiled over.

None of them knew what was happening at the back of the bus, or in this case, plane.

Qantas wouldn’t say when the last time Hudson or any of the executive team flew long-haul economy, but the answer for some could easily be never.

This wasn’t a problem when the airline had a reputation for great customer service.

But now the new CEO is going to have to do more than say she is “listening” and working to “rebuild trust”.

Qantas has a trophy board and senior management that understandably like to fly at the front of the plane.

All of them might need to spend time in the back for a 10-hour flight to understand how the other half lives.

Perhaps that could be something added into next year’s remuneration report?