New Qantas CEO Hudson Grilled by Lawmakers Over Raft of Scandals

Angus Whitley
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(Bloomberg) -- New Qantas Airways Ltd. Chief Executive Officer Vanessa Hudson was grilled, rebuked and chided by a parliamentary inquiry, piling more pressure on an airline already under fire for its treatment of passengers, staff and competitors.

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Appearing before a senate committee in Canberra on Wednesday, Hudson first said sorry for the airline’s service levels, repeating an apology she made to passengers last week. But Senator Bridget McKenzie, chair of the committee, took Hudson to task for the airline’s failure to make a written submission to the inquiry like smaller rivals Virgin Australia and Rex.

McKenzie then criticized Hudson, Chairman Richard Goyder and General Counsel Andrew Finch, seated in a row, for not knowing the dates of certain policy decisions inside Qantas. Neither could they name the colleague liaising with government on one particular matter. The lack of a submission and ready answers, McKenzie told them, “shows a level of disrespect.”

The inquiry — ostensibly formed to investigate a government decision to block more Qatar Airways flights into Australia — on Wednesday ignited into a fiery and unrestricted attack on Qantas.

The airline’s brand and reputation are suffering from a relentless wave of negative headlines, and Qantas stock is down 24% from a June peak.

Australia’s antitrust watchdog is suing Qantas for allegedly selling fake seats on thousands of flights it had already canceled. The country’s highest court earlier this month ruled that Qantas illegally sacked almost 1,700 ground workers during the pandemic. The revelations saw then-CEO Alan Joyce bring forward his retirement and step aside for Hudson, who took over the top job just three weeks ago.

Compounding the airline’s troubles, Hudson is being forced to increase spending to bolster service levels that slipped under Joyce’s repeated cost-cutting programs. While Joyce’s tenure ended with record profits, he left many disgruntled passengers waiting for flights, looking for lost luggage, or searching for replacement services.

Read More: Virgin Australia Blindsided by Government Block on Qatar Flights

Goyder on Wednesday defended his own position, telling the committee he has the support of the company’s largest shareholders to carry on. The airline’s pilots union on Tuesday called for him to step down.

The answers from Hudson and Goyder weren’t good enough for Senator Tony Sheldon — a long-time critic of Qantas — who said he had lost count of the airline’s apologies.

“I’ve only got 10 fingers and 10 toes,” Sheldon said. He accused Goyder of failing to take responsibility for sacking the 1,700 ground workers, a decision repeatedly found by courts to be illegal.

“You refuse to hold yourself to account,” Sheldon told Goyder.

Goyder said the airline apologizes “for what happened.” But he said there were “sound commercial reasons” for the decision.

Rachel Waterhouse, CEO of the Australian Shareholders Association, said in an interview that Goyder ought to step down by the end of the year. But he must first field questions from shareholders at the annual general meeting in November, and lay out a succession plan for his role, she said. Like Joyce, Goyder must answer for decisions made under their joint watch, she said.

“They’re both absolutely responsible,” she said.

Hudson, meanwhile, reiterated a commitment to lift performance.

“There are still issues, and cancellations are higher than they should be,” Hudson said. “We’re reviewing all our customer policies and processes to ensure that they are fair. You have my commitment that we will be serving Australians better.”

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