Qantas chair Richard Goyder may soon be thinking twice about his hubristic decision to hang around so long as he begins his 12-month valedictory slither out of the airline’s directors’ suite following a litany of failures.
While still juggling time-consuming roles as the chair of Woodside, the Australian Football League, the Western Australian Symphony Orchestra and the Channel 7 Telethon Trust — as well as travelling back and forth between his Perth home and the east coast — Goyder must find a suitable replacement. He must also find directors to replace him and two other “retiring” directors with more airline experience than has been the case at Qantas on his watch.
Meanwhile the company’s new senior management team, under Vanessa Hudson, does not look fit for purpose.
The Transport Workers Union has slammed Goyder’s decision to hang around, saying it was an attempt “to leave in a dignified manner with another year’s pay in his pocket, after presiding over the largest case of illegal sackings in Australian history”.
“A fresh start for Qantas governance requires a new board composition that excludes the CEO and embeds a worker representative to avoid a repeat of the colossal errors of judgement,” TWU Secretary Michael Kaine said. Governance experts agreed with Kaine.
To add to the company’s woes, pilots at Network Aviation, the company’s Perth-based subsidiary (Goyder’s own backyard!) that provides critical charter services to the mining sector as well as passenger services, are expected to vote down the enterprise agreement (EA) they describe as “insulting and unsafe” after talks with management on Wednesday failed. This will lead to further industrial action. Crikey understands two other Qantas east coast subsidiaries, Eastern Airlines and Sunstate, which fly QantasLink planes, are expected to follow suit.
Until the appointment of former American Airlines CEO Doug Parker in May this year, only one of the eight Qantas board members had any airline experience — the other is former Cathay Pacific CEO Tony Tyler. Curiously, staying on is one of corporate Australia’s most immovable time servers: Belinda Hutchinson, who has been on the board since 2018. The rusted-on Sydney University chancellor (since 2013) is also the Australian chair of French arms dealer Thales (since 2015) and has a stint at gambling giant Tabcorp among her variety of board positions — she had to resign as chair of insurer QBE after presiding over a $250 million loss in 2013.
Yet it is not only on the company’s board where real experience is lacking. As Qantas chief executive Vanessa Hudson settles into the cockpit, she appears determined to run the airline with a senior management team almost completely bereft of actual airline operations experience. In fact, just two of the expanded 13-person team (with two still to come) that Hudson announced have any such experience, herself not included. The lack of experience is such that the departing regional chief John Gissing will stay on as a “consultant”.
The operational experience, or lack of it, lies in stark contrast to Virgin Australia and Rex Airlines. At Virgin, seven of the 12 in the leadership team have operational experience, including chief executive Jayne Hrdlicka, who ran Jetstar. Virgin’s strategy and transformation chief Alistair Hartley spent four years running operation strategy and crew logistics at UK’s Virgin Atlantic Airways and five years with Jetstar running strategy and networks. Even Virgin’s loyalty chief Nick Rohrlach ran Jetstar Japan.
Rex boasts the deepest hands-on experience, where five out of nine have operational experience and several of them have actually flown or repaired aeroplanes. For example, Rex’s chief operating officer Neville Howell has over 38 years of aviation experience. He operated the Saab 340 as a first officer and captain for over 18 years for both Hazelton Airlines and Regional Express. Prior to his role as general manager of flight operations (GMFO) and chief pilot, Howell was manager of training and checking and deputy chief pilot. Rex also has — unusually but sensibly — on the management team a deputy general manager of engineering, Mark Burgess, who is a licensed aircraft maintenance engineer with over 30 years of experience, and general manager of flight operations and chief pilot Paul Fisher, who has more than 20 years of experience as first officer and captain.
Qantas has no pilots or engineers, or anyone that has run an airline, anywhere near its management team. Apart from “consultant” Gissing, who has long run the regional division (and the search for his replacement continues at a time when regional pilots are restless), the closest it gets is the new chief risk officer Andrew Monaghan, who has been COO at QantasLink and Qantas.
But perhaps most depressingly for Qantas staff and customers, new head of Qantas Domestic Markus Svensson has climbed the company ladder with a focus on revenue and marketing.
Svensson previously served as the executive manager of network, revenue management and alliances, where he was responsible for a large part of the commercial strategy for Qantas International and Qantas Domestic.
Qantas International and Freight boss Cam Wallace is a former Air New Zealand sales guy; Jetstar CEO Stephanie Tully a marketer.
Pilots, engineers and former senior staff at Qantas said with such a team that it was, as one pilot put it, “hard to believe the company was running an airline”. The lack of detail shown by Hudson, her legal counsel Andrew Finch and corporate affairs chief Andrew McGinnes at recent Senate hearings bears this out.
Hudson’s team is already showing signs of trouble, with loyalty chief Olivia Wirth taking a board seat at Myer this week. While she remains on her multimillion-dollar Qantas salary, insiders say her position, which must surely have been signed off by Goyder, is now untenable. Core to Myer’s business is its own loyalty scheme which includes Virgin’s Velocity Frequent Flyer program. Hrdlicka must be thrilled. As well, Qantas Loyalty has its own retail aspirations, which it must meet if it is to hit its heady revenue targets.
“With most pilots currently below minimum award wages, and a company proposal that remains the lowest and worst deal in the market, the pilots remain deeply unsatisfied and disenfranchised with the national carrier,” pilots at Network Aviation said.
“Yes, the money is poor, but the deal doesn’t just represent a bad deal financially, it represents a lack of respect in a deeply unhealthy organisation. They do not take any of the many, many issues seriously. Literally not a single market-standard pilot clause is available. But you can tell they try to play dodgy tricks in the negotiations — that is evident in this current proposal. They have a history of this.”
Qantas management is well aware of the impending “no” vote on the EA proposal, expected to be the worst result in Qantas’ history of pilot relations. Management has been sending more emails to pilots akin to saying, in effect, “we don’t care how low the EA vote is, the deal will not improve”.
“With safety and employee satisfaction clearly a low priority at Network Aviation under the Qantas financial business model, the recent waves of resignations has seen our best and most experienced pilots flocking to overseas jobs,” according to Network Aviation pilots. “The recent combined losses represent literally hundreds of years of combined experience, leaving nothing behind but a vacuum.”
That’s certainly something for Goyder to chew on as he ponders whether he has chosen the right person in Hudson to help him resurrect the mess that he and the board have presided over. He should be careful, for what he has wished.
