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Crikey
Business
Michael Sainsbury

Post-Joyce, Qantas’ legal stoush shows nothing new under the Hudson

Qantas chief executive Vanessa Hudson is nothing if not a chip off the old block. Contrary to her calming words on her coronation, it’s clear she is spoiling for a fight on a number of fronts: with customers, staff and unions.

Rather than trying to show that the Alan Joyce era is behind the airline by working with the Australian Competition and Consumer Commission (ACCC) on a settlement, it lodged its defence in the Federal Court this week to the damaging probe by the competition regulator. 

In fighting the charges, the airline is seeking to justify its actions. Just when Hudson should have read the room and settled, she instead signalled a long legal fight that will have lawyers rubbing their hands. Tying itself in knots trying to account for an inadequate and antiquated booking platform and management attitudes, the submission is a serious error of judgment, serving only to further damage its tattered brand while handing critics years of ammunition — particularly about flights really being a “bundle of services”.

Yesterday Qantas faced a Senate inquiry into the industrial relations closing loopholes bill that could torpedo the airline’s model of dividing and conquering its staff by creating myriad companies with different pay rates. It claimed that to stay afloat, it needed to pay staff (not management, of course) less — and admitted it had negotiated 43 separate pay deals in the past two and a half years.

It appears Hudson is determined to plough on with Joyce’s strategy and that of the board, which will face shareholders at the AGM on Friday. So much for Hudson saying she could count on the help of employees to show customers “why we deserve to be their trusted first choice”.

Pilots, engineers and white-collar staff who spoke to Crikey all said morale remained extremely low and Hudson had not moved the dial.

Indeed, she and her industrial relations team refuse to budge on giving a better deal to pilots at Qantas’ regional airline subsidiary Network Aviation, who are paid only 60% of the wages of mainline pilots, despite flying the same planes. A two-day strike this week has been pulled “in good faith” by the union after the two sides were ordered into mediation for four days next week by the Fair Work Commission (FWC).

It’s an early test of new rules brought in by the Albanese government and will be a closely watched battle, one the union has told its members in documents seen by Crikey to expect to be “long and hard”.

To counter an industrial action, Qantas has sacrificed regular Melbourne-to-Canberra flights, inconveniencing its customers in the east and to cover strike action with a Boeing 717. It also showed it was prepared to sacrifice other routes, such as Adelaide-Perth, flights that were cancelled today to bring in more aircraft in preparation for the strike.

“Unfortunately it’s too late to unwind these plans,” Network Aviation COO Trevor Worgan said in a staff note yesterday.

A pilot familiar with the FWC talks said: “Qantas keeps crying poor but has no financial statements to provide. We have already replaced Qantas on the Perth-to-Darwin route and many Western Australian passenger routes, so where has the money gone? There seems to be plenty of money to pay executives millions.

“Network HQ is in crisis meeting after crisis meeting and Worgan was called over to Sydney last Friday for a meeting with Hudson and there are growing concerns amongst pilots about safety.”

In the meantime, Hudson has raised fares across the group board by 3-3.5% — a bid to contend with, she claims, rising fuel costs, as well as to presumably try to lock in its monopolistic profits ($2.47 billion last financial year).

But there are signs the continuing industrial relations hardball may be counterproductive, as miners who rely on Network Aviation are rumoured to be exploring other options with Perth-based Alliance, a company similar to Network Aviation. It was the subject of a takeover bid by Qantas but was rejected by the ACCC and dropped by Hudson two weeks ago.

Into this mix comes newly appointed QantasLink CEO Rachel Yangoyan — yet another member of Hudson’s team with minimal operational experience — who is responsible for Network Aviation and other regional subsidiaries. She’s an accountant who worked her way up in the company for 20 years through its loyalty division.

Some of the comments on her welcome note to staff, signed simply “Rachel”, had staff eyes rolling: “Outside of work I like to spend time with my family (including my five-year-old spoodle who definitely loves me the most), attempt to stay fit and love cooking and travel.”

Stay tuned.

Is Qantas charting new territory under Vanessa Hudson, or circling the same old tarmac? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publicationWe reserve the right to edit for length and clarity.

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