The Times Australia
The Times World News

.
Beatbot

.

the challenge ahead for new chief Vanessa Hudson

  • Written by Volodymyr Bilotkach, Associate Professor, Purdue University
the challenge ahead for new chief Vanessa Hudson

Vanessa Hudson, who will replace Alan Joyce[1] as Qantas Airlines’ chief executive in November, inherits an airline still struggling to resume services after the pandemic and border closures shuttered much of the global aviation industry in 2020.

The silver lining for Qantas has been that high demand for air travel has enabled it to charge higher airfares[2]. It even managed to report a A$1.43 billion profit[3] in the second half of 2022.

But these conditions won’t last. As Hudson – an accountant who joined Qantas in 1994[4] and has been chief customer officer since 2018 – deals with the highly unusual short-term challenges that come with recovery, she will increasingly have to turn her mind to all the long-term challenges that existed for Australia’s flagship airline before 2020.

High demand, but not enough planes or staff

There are two main reasons demand for air travel is recovering faster than supply.

First is the time and effort to return to service the aircraft stored during the pandemic, parked at regional inland airports[5] and plane storage sites. Qantas put about 100 of its 126 planes[6] into storage, retired six ageing Boeing 747s and deferred delivery of new Airbus A321neo and Boeing 787-9 planes.

A Qantas plane parked at Southern California Logistics Airport in Victorville, California, in December 2022.
A Qantas plane parked at Southern California Logistics Airport in Victorville, California, in December 2022. Shutterstock

Never in the history of civil aviation have airlines had to store so many aircraft. Returning them to service requires exhaustive maintenance checks and tests. Limited skilled maintenance crew can only ready so many aircraft to return to flying.

Which leads to the second, more important, issue: the need to fill jobs.

Even before the pandemic, the industry was grappling with a global shortage of experienced pilots. Now it’s grappling with replacing all the workers – air and ground crew – retrenched when borders were closed in 2020.

Qantas laid off almost a third[7] of its 30,000 employees, included unlawfully retrenching almost 2,000 ground-crew workers. It is now looking to recruit about 2,000 workers by the end of 2024[8] and a total of 8,500 by the end of the decade.

Many who have found employment in different industries are not returning. Some in the industry fear aviation is no longer an attractive career. And the pilots, flight attendants and mechanics that are being re-employed all require refresher training before being cleared to work.

Read more: Averting a plane crash: what to do about the global pilot shortage[9]

Incoming CEO Vanessa Hudson with Alan Joyce at the airline's headquarters in Sydney, August 20 2020.
Incoming CEO Vanessa Hudson with Alan Joyce at the airline’s headquarters in Sydney, August 20 2020. Dean Lewins/AAP

Labour shortages are affecting the entire aviation supply chain, including manufacturers. Qantas currently faces delays of about six months[10] on new aircraft deliveries.

Competing for customers

Competition for customers will be a relatively minor concern as Qantas struggles to catch up to demand. But this won’t last as airlines rebuild fleet capability, and current high prices for air travel decline. In the US market, for instance, airfares returned to their pre-pandemic levels[11] (in inflation-adjusted terms) at the end of 2022.

By the end of 2023 or early 2024, I expect Qantas will be grappling with substantially the same competitive pressures that drove its pre-pandemic cost-cutting and outsourcing. For this, it can partly blame global government assistance to airlines, which had the perverse consequence of fewer airline collapses in 2020 than in 2018 or 2019[12].

While Qantas turned a profit for each year between 2015-2019[13], profit margins were quite thin.

There has been a lot of talk that the pandemic changed the air-travel market irrevocably. Business travel, for example, may never recover. Consulting firm McKinsey predicted in February 2021 that the post-pandemic market of business travel would be 20% smaller[14].

With the jury still out on this and other questions, the challenge for Qantas and other airlines will be to plan and adapt services accordingly.

Read more: Qantas, the trying kangaroo: why things won't get better any time soon[15]

New challenges for an ageing fleet

Longer term, Qantas must reduce its environmental footprint.

From 2027, all international air carriers will be required to offset the carbon emissions associated with flights – a condition set by the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation[16].

More generally, the drive to decarbonise commercial aviation also makes stricter domestic environmental requirements very likely.

This will be harder for Qantas than competitors, due to airline’s extensive network of medium and long-haul flights (which use more fuel) and ageing, less fuel-efficient fleet.

The average age of the Qantas fleet is just over 15 years[17], more than double that of rivals such as Singapore Airlines. Fleet renewal will be a formidable task.

References

  1. ^ replace Alan Joyce (www.abc.net.au)
  2. ^ higher airfares (edition.cnn.com)
  3. ^ A$1.43 billion profit (www.reuters.com)
  4. ^ joined Qantas in 1994 (investor.qantas.com)
  5. ^ parked at regional inland airports (www.smh.com.au)
  6. ^ 100 of its 126 planes (onemileatatime.com)
  7. ^ laid off almost a third (www.smh.com.au)
  8. ^ 2,000 workers by the end of 2024 (www.travelandleisure.com)
  9. ^ Averting a plane crash: what to do about the global pilot shortage (theconversation.com)
  10. ^ six months (www.reuters.com)
  11. ^ returned to their pre-pandemic levels (www.bts.gov)
  12. ^ than in 2018 or 2019 (theconversation.com)
  13. ^ turned a profit for each year between 2015-2019 (investor.qantas.com)
  14. ^ be 20% smaller (www.mckinsey.com)
  15. ^ Qantas, the trying kangaroo: why things won't get better any time soon (theconversation.com)
  16. ^ Carbon Offsetting and Reduction Scheme for International Aviation (www.icao.int)
  17. ^ just over 15 years (www.theguardian.com)

Read more https://theconversation.com/qantas-cant-charge-these-prices-forever-the-challenge-ahead-for-new-chief-vanessa-hudson-204903

The Times Features

How Does iCare And High-Quality Clinical Support Aid Patient Recovery?

Recovering from a workplace injury, automobile accident or managing a chronic condition can be overwhelming. Whether you're a patient or a family member, you may ask: “How can I ...

Finding the Best SMP Clinic in Perth: Tips and Recommendations

Hair loss can be a tough experience. It’s not just about losing hair; it can feel like you’re losing a part of your confidence, too. That’s why Scalp Micropigmentation, often cal...

How Does iCare And High-Quality Clinical Support Aid Patient Recovery?

Recovering from a workplace injury, automobile accident or managing a chronic condition can be overwhelming. Whether you're a patient or a family member, you may ask: “How can I ...

How can brands recognise the very important role that visual content plays in the real world?

For nearly three decades, Getty Images and iStock have developed unparalleled expertise in understanding the impact of visual content on our world. During this time, one truth ...

Long COVID appears to be driven by ‘long infection’. Here’s what the science says

Around 5–10%[1] of people with COVID infections go on to experience long COVID, with symptoms lasting three months or more. Researchers have proposed several biological mechan...

Evaluating Costs and Benefits of DIY Plumbing vs. Professional Services in Newcastle

Plumbing is an essential service for homes and businesses in Newcastle, ensuring the smooth flow of water and sanitation facilities. As residents and businesses strive to maintai...

Times Magazine

Understanding Different Types of Child Care

In New South Wales, Australia, parents are faced with a myriad of choices when it comes to child care. From long daycare centres to family daycares, preschools, and occasional care services, each option offers its own set of benefits and considerat...

Critical situations that indicate it is time to hire expert removalists

Given how expensive moving is, it is understandable that you would look for any opportunity to reduce your expenses. You may even be thinking about making the move on your own. This will depend on your work, where the relocation is, and how much ...

Volodymyr Nosov, WhiteBIT: Australia is another stage of our mission to spread the blockchain globally

Volodymyr Nosov, WhiteBIT: Australia is another stage of our mission to spread the blockchain globally Australia is a country of ardent fans of cryptocurrencies and people familiar with the latest trends in the global financial market. Given t...

The Benefits of Getting Professional Suspension Repair

Benefits of Hiring a Professional for Suspension Repair When it comes to vehicle repair, suspension repair is one of the most important services a professional mechanic can provide. Suspension systems are vital for keeping your vehicle running s...

Understanding How a Solar Inverter Works in a Residential Solar System

As the world shifts towards sustainable energy sources, residential solar systems have become increasingly popular. At the heart of these systems is a critical component known as the solar inverter. Understanding how a solar inverter works is ess...

Interview with author Christian White. His latest book The Ledge is out now

What inspired you to write the book? I’d always wanted to write a coming-of-age thriller. The book started as a love letter to all the coming-of-age books and movies that shaped me as a teenager: Lord of The Flies, It, The Body / Stand By Me, The ...