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Michael Sainsbury

‘All skeleton’: Can Qantas’ new CEO salvage an airline amid the wreckage?

There was a certain sense of timing when one of Qantas’ oldest long-haul planes, an A330, was damaged by a pushback tug (used to tow vehicles) in Brisbane on Monday night. It happened just as Alan Joyce was penning his resignation letter as Qantas CEO two months early, handing the reins to his successor, Vannessa Hudson.

The tug was one of a fleet gifted to company Dnata in Joyce’s spree of outsourcing and asset sales, which has left the company “like a skinny dingo, all skeleton and barely alive, just getting by in a long drought”, as one engineer put it. He added that the “fat reserves are all but gone. That is how we feel right now. But there is hope that with a bit of rain, things will turn around.”

It was the second twin-aisle plane — after a belt loader hit a 787 on August 19, according to engineers — that has had major damage inflicted by outsourced, often low-paid and casual staff driving essential ground equipment. “You pay peanuts, you get monkeys,” a Qantas pilot said, adding that such accidents had noticeably increased since Joyce started outsourcing staff and running down on-the-ground resources.

A Qantas A330 damaged by a pushback tug manned by outsourced labor in Brisbane, September 4 (Images: Supplied/Private Media)

It is this skinny dingo that Hudson must try, somehow, to make healthy once more. And while she has been complicit in the running down of Qantas in her four years as chief financial officer — and 19 years in the finance department before that — the truth is, she’s still been flicked a hospital pass by her old boss.

When Joyce walked out on Tuesday evening, the charade was up. There was nothing left to sell and the pillaging for the greater corporate good was complete. He had sold everything: the corporate headquarters, sold and leased back; all of the catering centres and the revenue that provided food for customer airlines are gone; the airport terminals, gone; large properties of corporate real estate, gone; the last tract of Qantas land in Sydney flogged off by Joyce for $800 million to cover a recent debt crisis. 

“Our world-class flight simulators are a shadow of their former selves,” the engineer said. “Joyce wrote down the value of aircraft years back to claim a huge loss on paper, further devaluing Qantas assets. There is nothing left to sell. He gifted all of the cargo loading and ramp equipment to Dnata and Swissport when he sacked 1700 ramp workers. The list goes on.” 

The problem for Hudson is that she has been in lockstep with the strategy established by the board and Joyce. As CFO, she was responsible for ripping $1 billion in costs out of the company during COVID, including the unlawful sacking of 1700 baggage handlers in a case now waiting for judgment by the High Court. Hudson promised further cost cuts of $300 million only last month.

In her first video address yesterday, she told staff the company needed to get the “balance right” between customers, staff and the business. “Right now, achieving this balance must first start with our customers, and that’s what we will be focused on with our new management team,” she said. It left many of them cold.

“I can’t help but feel that they cut the cancer out but the metastasis has spread already,” one international pilot said. “I laughed when Hudson said she was confident she could count on the help of employees to show customers ‘why we deserve to be their trusted first choice’. Wait a minute, she was part of the management team that burned the place down.”

A Qantas corporate executive had a similar view. “It was pretty bland. References a new management team, but they are really just internal movements. It’s very hard for new people to come into the organisation at a senior level. And then she thanks Alan … embarrassing and cringy, time to move on. I am not sure she is really a break from the past. Time and actions will tell.”

A Qantas engineer said that the maintenance crew had been in a jovial mood on Tuesday. “But we all wait with bated breath for what the next chapter brings. Everyone lives in hope that Vanessa will finally think of more than shareholders and share prices.”

“What she needs to realise is that she won’t get customers back until she gets the staff back,” another pilot said.

Hudson already has industrial problems looming at the Perth-based Network Aviation (NA), where flight attendants restarted negotiations — on Joyce’s last day at the company — after management took fright after they gained protected industrial action. Management has resuscitated an offer it made earlier in the year, but tinkered with to the point that the attendants had had enough, insiders said.

They are hardly treated well. There are multiple stories of flight attendants being left in far-flung Western Australian towns like Geraldton without overnight accommodation. In some instances, they have been forced to sleep on benches in terminals after aircraft breakdowns, insiders told Crikey. COVID-era cost-cutting has seen all pillows and blankets taken off flights and unreturned.

Network Aviation started life as a mining charter specialist, catering to the countless thousands of fly-in-fly-out (FIFO) workers who operate Australia’s mines. But it has expanded into regular passenger services, taking over routes from Perth to Darwin, and plans to add flights from Perth to Adelaide and Hobart are well advanced, insiders said. Yet it pays wages that are, in many cases, below award, according to comparisons provided by the Australian Federation of Air Pilots.

NA pilots voted this week on their own protected industrial action, and pilot sources say the affirmative vote is expected to be near 100%. A stop work looms as pilots demand the closure of the yawning 40% pay gap between them and Qantas mainline pilots for flying essentially the same single-aisle jets (A320 v 737s). Pilots at two other Qantas regional arms, Eastern and Sunstate, are taking similar action.

Any strike action has the capacity to severely throw a major spanner in the mining sector’s operations — heaven forfend. Gina Rinehart and Andrew Forrest would not be happy with Qantas chair, and fellow Western Australian, Richard Goyder. 

So Vanessa Hudson has jumped, going on the front foot and flying to Perth today to meet with NA pilots.

The new CEO’s choice is invidious: ”For her sake, I hope she is not going empty-handed,” one insider said. Pilots at NA have told Crikey they are serious about an initial strike for 24 hours. “But of course, if Hudson doesn’t come empty-handed, then everyone will see that the real threat of industrial action gets results.”

It will be the first of many such choices that will reveal, soon enough, whether Hudson is the change the company needs and customers demand, or simply same shit, different channel.

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