Vanessa Hudson could hardly have taken the helm of Qantas Airways Ltd. at a worse time.
The brand was in tatters after a post-Covid spike in cancellations, delays and lost bags. Passenger frustration was at boiling point and the Sydney home of Hudson’s predecessor, Alan Joyce, had been pelted with eggs. As the crisis dragged into late 2023, lawmakers in Australia voiced the unthinkable — a possible breakup of the century-old carrier as punishment for market abuse.
Eighteen months into the role, Hudson is pulling off what seemed like an improbable victory. The first-time CEO is simultaneously winning over disgruntled flyers, reporting super-sized profits and delivering knock-out returns for investors. A gauge of passenger satisfaction has almost doubled, shareholders are getting a dividend for the first time since 2019 and the stock is near a record.
In a rare interview, Hudson, 55, says the numbers are no one-off. And she maintains relentless demand for flights, coupled with the biggest fleet overhaul in the airline’s history, is set to propel Qantas even further.
At Australia’s largest airline, there’s no sign of the faltering consumer spending reported in recent weeks by major US carriers including Delta Air Lines Inc. According to Hudson, there’s appetite to travel at all price points, from the sub-A$100 ($63) fares sold by budget brand Jetstar to the luxury berths on marathon Qantas services linking Perth on Australia’s west coast to London.
What could prove trickier are aircraft delivery delays and renewed competition from Virgin Australia, which is extending its international network through partner Qatar Airways and planning a local listing that would offer investors another choice of Australian airline stock.
Hudson’s confidence is premised on a multibillion-dollar order of next-generation Airbus SE jets that Qantas says are more reliable and efficient and far outstrip the financial returns from the older planes they’re replacing.
“Earnings growth comes from investment and we are making the right investments,” Hudson last week said from Hong Kong, where she was meeting with investors after the carrier’s half-year results. “We’ll continue to see earnings grow.”
The redemption of Australia’s marquee airline under Hudson is a story of public apologies, an embrace of criticism, and the dismantling of some of the profit-oriented building blocks of Hudson’s predecessor. Arguably aviation’s highest-profile female executive, Hudson is the first woman to run Qantas and turns industry male leadership tropes on their heads. Listening, says the dog-loving, 30-year Qantas veteran, outranks speaking.
“My philosophy is more one of servant leadership,” said Hudson. “I fly in cockpits, I stand in galleys, I walk around engineering facilities.” She says it’s the best way to hear from staff what’s working, and what’s not.
Hudson can still come unstuck. She needs to foot the bill for the new aircraft that Qantas requires to reshape its earnings. Hudson must also navigate the ruptured supply lines that have already delayed deliveries as she revamps the airline’s almost 360-plane fleet.
In early 2027, she’ll have to deliver on a decade-long project that will put almost any city in the world within reach of a single flight from Australia. The first services on the customized, ultra-long-haul Airbus A350s will connect Sydney with New York and London. They’re set to be the world’s longest non-stop commercial routes.
Project Sunrise, as it’s known inside Qantas, was hatched under Joyce but the execution will fall to her. With demand untested, some analysts have questioned whether the mammoth flights can deliver adequate returns.
Hard yards
“I don’t think that you can say the hard yards are all behind us and it’s easy sailing going forward,” she said. “You should always be feeling uncomfortable about what’s around the corner.”
Neither has Hudson convinced everyone she’ll make good on pledges to treat staff better.
“Qantas has said all the right things,” said Transport Workers’ Union National Secretary Michael Kaine, who for years sparred with Joyce over the pay and working conditions of Qantas employees. “But it’s going to take more than a few promises of new beginnings to get it back to the airline it used to be.”
Australians’ affinity for their national carrier, which markets itself as “The Spirit of Australia,” makes Qantas vulnerable to public rebuke if its service levels falter. Hudson took the reins in September 2023 with the airline at its lowest ebb. Australia’s competition watchdog had accused the company of selling bogus seats on thousands of flights that were already canceled. It was one public relations disaster too many, and Joyce stepped down.
So far, Hudson, previously Qantas’s chief financial officer and a chartered accountant by training, has resolved the major issues that led to her predecessor’s ouster.
She spent her first few weeks in charge repeatedly apologizing for the airline’s performance. She settled the ghost flights lawsuit for A$120 million, less than half the penalty the competition regulator originally sought. She also reached an agreement with the Transport Workers’ Union to compensate former ground staff who were illegally fired during Covid.
Investor faith
So far, investors have shown faith in her approach. Qantas’s stock has jumped 70 per cent over the past 12 months, making it the second-best performer on the Bloomberg World Airlines Index. Only IAG SA, the British Airways-owner that last month reported rosier-than-expected profits, has done better.
In her updates to employees, Hudson has chosen not to include the share price, a metric favored by Joyce in his staff communications. Instead, it’s been replaced by the airline’s on-time performance, a gauge of punctuality and reliability.
It’s hard to overlook other differences between Hudson and Joyce.
The flamboyant Irishman was the face of Qantas, frequently on television, and often armed with a ready soundbite. He forged a reputation as a ruthless, hard-edged executive who seldom bowed to criticism. Under Joyce, for example, the Australian Financial Review was banished from Qantas lounges after sustained attacks on his leadership by one of the newspaper’s then-columnists, Joe Aston.
But at an Australian Financial Review conference in Sydney earlier this month, Hudson said she’d read Aston’s book chronicling Qantas’s darker times. She suggested all the airline’s 28,000 employees do the same. It’s vital to be aware of your shortcomings, she told attendees.
Hudson has largely managed to switch Qantas’s focus back onto passengers, said Jakob Cakarnis, an analyst at Jarden Australia Pty. The trick is finding the sweet spot where flight reliability, customer satisfaction and the airline’s bottom line are all in balance, he said.
“It’s a delicate needle to thread,” said Cakarnis. “There’s still room to improve and we’re starting to see evidence that the investment in the fleet is worthwhile.”
