Qantas CEO Vanessa Hudson says carrier has let Australians down
Ayesha de KretserSenior reporterSep 22, 2023
New Qantas chief executive Vanessa Hudson says the airline should never feel “entitled” to customer loyalty, pledging to invest more than $150 million to restore trust and rebuild the battered reputation of Australia’s flag carrier even though bookings remain solid.
In a dramatic about-turn since she endorsed Qantas’ strategy under her predecessor, Alan Joyce, as recently as full-year results on August 24, Ms Hudson said she is now reviewing customer operations, including whether to bring call centres back to Australia from offshore.
Qantas chief executive Vanessa Hudson has apologised to customers for the carrier’s performance. Edwina Pickles “We should never feel entitled to [our] customer loyalty. We have to be focused on making sure that we win that loyalty on every flight in every moment and in every interaction,” Ms Hudson told reporters on Friday.
Ms Hudson stressed that Qantas has not seen any slowdown in bookings or impact from the brand damage on its bottom line. But she acknowledged that spending on customers, including new aircraft, lounges and food and beverage would come at a cost to the airline’s record earnings.
The airline has already set aside $150 million for future investment in customer service, but Ms Hudson said investors were supportive of more spending being allocated as needed as Qantas builds back trust and heads off a regulatory onslaught that could hurt its dominant market position.
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View QAN related articles “I have spent time with investors, and they are very supportive of the focus that I’ve got now on regaining trust and investing in the customer,” she said.
Forager Funds chief investment officer Steve Johnson said the brand damage already sustained was not irreversible and Qantas would be “silly not to” invest to fix things, even though its booking pipeline is strong.
“People love whinging about Qantas, but I don’t think it’s actually affected the consumer’s preference,” he said. “But there is going to come a time here when there is more supply of aircraft in the next five years and people have more choice.”
Last month, Ms Hudson said Qantas’ record $2.47 billion profit in FY23 was not as good as it gets, and in May,
Qantas said it was targeting earnings before interest and tax margins of 18 per cent for its domestic operations and 10-12 per cent for international.
Ms Hudson did not confirm whether these targets would be revisited but flagged fuel costs have risen 30 per cent in the past three months.
In a video message to Qantas customers, Ms Hudson acknowledged that the airline had fallen short of its responsibility to customers.
“We want to get back to the national carrier that Australians can be proud of, that’s known for going above and beyond. We understand we need to earn your trust back. Not with what we say, but what we do and how we behave,” she said.
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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 i...
Ms Hudson acknowledged that the airline had let Australians down. “I’ve been reading complaints and I think it is clear that we have let them down and that we’ve disappointed and frustrated many customers,” she said.
She said she has not spoken to Mr Joyce since he left the company earlier this month, eight weeks earlier than planned. She also confirmed that her own short-term incentive had been docked by 20 per cent for failure to satisfy customers.
Asked if the airline had struck the right balance between customers, staff and investors over the past two years, Ms Hudson acknowledged Qantas’ service has fallen short.
“I think it’s important to recognise that we have not delivered to our customers’ expectations and I think that that is the context of what is in my apology today,” she said.
Qantas will also need to answer the Australian Competition and Consumer Commission, but she didn’t rule out negotiating a settlement, again turning away from the
airline’s combative stance that saw it fight sacked workers all the way to the High Court, where it lost.
Ms Hudson said she has apologised to TWU national secretary Michael Kaine for the difficult decision that was made to sack nearly 1700 ground staff at airports.
“I have also spoken to Michael Kaine and expressed my apology in person to him and I will be attending the mediation session that we have coming up in the coming weeks,” she said. “My focus now is looking forward and making sure that we resolve the compensation as quickly and as reasonably as we can for all involved.”
As a first attempt to quell customer anger, Qantas will add 5 million Frequent Flyer seats and look at ways to empower frontline staff to more quickly answer questions, offer refunds and fix “unfair” policies around issues such as name changes on tickets.
Asked if part of the investment in customers was also designed to head off increased political scrutiny, Ms Hudson stressed it was important for Qantas to maintain strong relationships in Canberra, adding that competition helps make Qantas a better airline.
“A really important part of the debate around Qatar is that traffic rights into Australia are a matter for the government. The comments that we made around our submission at the time was in the context where we were in, that we hadn’t recovered from COVID and what we have seen is that the capacity have come has come back into Australia the way we thought,” she said.