Qantas boss Vanessa Hudson has committed to a comprehensive review of all “outdated” customer policies after issuing an apology on behalf of the business for failing to strike the balance between managing the expectations of passengers and investors.
Hudson said she was focused on demonstrating that Qantas is actually sorry for its misdeeds but accepted it would take time before trust is regained, in her first public comments since her unexpected early elevation into the CEO role after a harrowing month in which Alan Joyce departed early.
Qantas boss Vanessa Hudson said it had been a “humbling” period for the airline business in a message to customers on Friday.Credit: Rhett Wyman
“We recognise Qantas has not been where it needs to be for a long time,” Hudson said in an interview on Friday. “I was a part of the leadership at the time, but clearly I wasn’t the chief executive then. I am the chief executive now and what I would say is that I would like to be judged by what we do now and how we behave going forward.”
In a video message to customers on Friday, Hudson asked for patience while the group wades through a series of policy upheavals as part of a $150 million investment to try to regain trust. She said charging customers to change their name on a ticket was one of many “outdated” policies likely to be scrapped.
The group will also increase the number of frequent-flyer seats, boost the number of front-line staff and will consider moving their call centres back onshore in recognition of the business’s poor reputation, a big shift from Hudson’s prior support of Joyce’s former strategy.
“I know that we have let you down in many ways and for that, I am sorry. We haven’t delivered the way we should have. And we’ve often been hard to deal with. I know that our people have tried their absolute best under very difficult circumstances. I want you to know that we’re determined to fix it.”
“This is going to take time and I ask for your patience,” she told customers.
Qantas’ month of turmoil started when former chief Joyce revealed it had posted a record underlying profit of $2.47 billion for the 2023 financial year to raucous applause from investors. Joyce was summoned to appear before the Senate select committee into the cost of living crisis days later, where he was grilled over the airline’s role in exacerbating economic pressures for its staff and customers.
The Australian Competition and Consumer Commission then announced legal action against the group over alleged breaches of consumer law following a lengthy investigation that blindsided investors. The consumer watchdog said Qantas falsely advertised flights that had already been cancelled over a period between May and July 2022. Days later, Joyce announced he would step down early to give Hudson room to start her tenure with a clean slate.
But the pressure on Qantas has not eased with Joyce’s departure; many irate customers and investors have also been calling for the resignation of chair Richard Goyder over allowing Joyce to sell more than 80 per cent of his shareholding in the group in June. The Qantas board has also been accused of failing to adequately govern Joyce and his executives. Many blamed their alleged lack of leadership for its recent failings.
Goyder told ABC radio on Thursday he would not step down and said he thinks he has support to continue in the role.
Hudson said she had not spoken to Joyce since his departure, but spoke to Goyder daily and said the board had been “inquiring, diligent and challenging” since she joined the executive team as chief financial officer in 2019.
She revealed Qantas’ bottom line has not been affected by the recent turmoil, with forward bookings remaining strong despite the recent scandals that have tarnished its brand.
“What is really important to me as a new chief executive is that I don’t take it for granted. I don’t want to continue on the same trajectory... I want to invest back into that customer experience so that we rebuild trust. We should never feel entitled to customer loyalty,” Hudson said.
When announcing the business’ financial results as chief financial officer last month, Hudson endorsed Joyce’s strategy for the group and said last year’s record profit was not as good as it gets for Qantas. Qantas said it was earning margins of 18 per cent for its domestic arm and up to 12 per cent for its international division.
On Friday, Hudson flagged fuel costs had increased by 30 per cent over the past three months and did not confirm whether these targets would be revised.
Also on Friday, ACCC chair Gina Cass-Gotlieb told the Senate select committee into bilateral air service agreements that it would like to bolster Australian Consumer Law to prosecute airlines if they fail to reasonably accommodate passengers when their flight has been cancelled.
Qantas and rival carrier Virgin Australia have been accused of hoarding slots at Sydney Airport to fend of competition. Slot hoarding is when an airline schedules a service with no intention to actually fly it to stop another airline from gaining access to the spare slot.
“The problem is while there is a legal obligation to provide the customer a guarantee, it is not a contravention of the act if they fail to do so. We are not currently able to take action against companies which fail to comply with their consumer guarantee obligations,” Cass-Gotlieb said.
She also called for an independent external dispute resolution scheme to be established, calling the airline customer advocate “much too limited” and “generally ineffective”.
Qantas last month scrapped the expiry date on millions of dollars in unredeemed COVID-19 credits after it received a concerns notice from the ACCC following months of media coverage and backlash from the public.
On Friday, Virgin announced it has extended its own expiry dates on $120 million in unredeemed credits to June 2025 after the ACCC turned its attention to the smaller carrier.
Any traveller with a booking which was cancelled by Virgin due to pandemic-induced border closures between April 2020 and July 2022 will now have until June 30, 2025 to use their credit. Virgin has previously extended the expiry three times and has issued more than $1.2 billion in credits. Virgin is still sitting on about $300 million in unredeemed credits it accrued during the carrier’s stint in administration. These credits will expire at the end of this year.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.