1 00:00:06,000 --> 00:00:08,400 Speaker 1: You can listen to the Front on your smart sneaker 2 00:00:08,520 --> 00:00:12,639 Speaker 1: every morning to hear the latest episode. Just say play 3 00:00:12,680 --> 00:00:23,439 Speaker 1: the news from The Australian. From the Australian, Here's what's 4 00:00:23,480 --> 00:00:26,520 Speaker 1: on the Front. I'm Claire Harvey. It's Friday, August thirty. 5 00:00:30,520 --> 00:00:33,800 Speaker 1: Jewish creatives dogsed by a pro Palestinian activist want a 6 00:00:33,840 --> 00:00:37,880 Speaker 1: full investigation by the Australian Federal Police. The Australian's revealing 7 00:00:37,880 --> 00:00:41,080 Speaker 1: today the victims say they can identify the person who 8 00:00:41,120 --> 00:00:43,600 Speaker 1: took a tip off from a New York Times reporter 9 00:00:44,040 --> 00:00:50,120 Speaker 1: and set about revealing their identities. Working from home could 10 00:00:50,120 --> 00:00:53,440 Speaker 1: become a legal right for clerical workers and it could 11 00:00:53,479 --> 00:00:57,080 Speaker 1: be a game changer for employees in other industries. The 12 00:00:57,120 --> 00:00:59,520 Speaker 1: Fair Work Commission will conduct a major review of the 13 00:00:59,560 --> 00:01:03,600 Speaker 1: industry award, with hearings said to kick off in September. 14 00:01:04,240 --> 00:01:07,800 Speaker 1: Those stories alive right now at the Australian dot com. 15 00:01:07,880 --> 00:01:13,880 Speaker 1: Dora You Quantus made a squeak over two billion dollars 16 00:01:13,920 --> 00:01:16,720 Speaker 1: in profit and is spending two hundred and thirty million 17 00:01:16,760 --> 00:01:21,040 Speaker 1: dollars finding our lost bags and improving the food. So 18 00:01:21,240 --> 00:01:24,240 Speaker 1: will it be enough to reignite our love affair with 19 00:01:24,360 --> 00:01:28,000 Speaker 1: the flying kangaroo. That's today's story. 20 00:01:32,440 --> 00:01:47,200 Speaker 2: Lovely city and never lost a matter. 21 00:02:01,120 --> 00:02:03,480 Speaker 1: Eric, like me, you would have grown up in the 22 00:02:03,520 --> 00:02:08,480 Speaker 1: era of beautiful Quantus ads. Quantas had acchoir. They really 23 00:02:08,560 --> 00:02:11,919 Speaker 1: tugged at our heartstrings, didn't they and established this as 24 00:02:11,960 --> 00:02:14,800 Speaker 1: a brand that Australians really loved. 25 00:02:15,200 --> 00:02:19,640 Speaker 2: That's right. And now fast forward today where we're upset 26 00:02:19,680 --> 00:02:23,040 Speaker 2: about our planes been delayed or our bags being lost, 27 00:02:23,120 --> 00:02:28,200 Speaker 2: and that sense of uplift has vanished with the winds. 28 00:02:28,919 --> 00:02:32,799 Speaker 2: So this is all the job that new chief executive 29 00:02:32,840 --> 00:02:37,679 Speaker 2: Vanessa Hudson, who took over from Alan Joyce in a 30 00:02:37,680 --> 00:02:39,640 Speaker 2: fair bit of turmoil at the end of last year. 31 00:02:40,680 --> 00:02:43,919 Speaker 1: Eric Johnston is an associate editor of The Australian and 32 00:02:44,080 --> 00:02:45,359 Speaker 1: our Business Expert. 33 00:02:46,480 --> 00:02:49,000 Speaker 2: It's her job to try and bring that bling back 34 00:02:49,040 --> 00:02:51,960 Speaker 2: to Quantas, to try and bring that feeling back to Quantas, 35 00:02:52,520 --> 00:02:56,080 Speaker 2: and they've already started doing that in some ways. And 36 00:02:56,120 --> 00:02:57,720 Speaker 2: you would have seen some of the ads during the 37 00:02:57,720 --> 00:03:00,519 Speaker 2: Olympics that played that that's been a while of money 38 00:03:00,680 --> 00:03:03,560 Speaker 2: about the emotions, trying to bring some of the emotion back. 39 00:03:05,160 --> 00:03:08,600 Speaker 1: Excuse me, everybody, but I just have your attentions please. 40 00:03:10,120 --> 00:03:15,960 Speaker 2: This is Matthew Send off for the Powis Olympics. We're 41 00:03:16,000 --> 00:03:19,080 Speaker 2: all behind you. There's a good luck to you. But 42 00:03:19,360 --> 00:03:24,160 Speaker 2: it goes deeper than that and quantas. On Thursday, they 43 00:03:24,240 --> 00:03:27,800 Speaker 2: released their full year results. Now this is important because 44 00:03:27,800 --> 00:03:30,080 Speaker 2: it was the first set of results for Vanessa Hudson. 45 00:03:30,320 --> 00:03:34,040 Speaker 2: She was the former CFO, the chief financial officer and 46 00:03:34,120 --> 00:03:38,080 Speaker 2: promoted to the chief executive officer. Her task is to 47 00:03:38,920 --> 00:03:42,920 Speaker 2: not only win back customers, but also to win over 48 00:03:42,960 --> 00:03:47,040 Speaker 2: employees and also try and keep shareholders on site. Now 49 00:03:47,080 --> 00:03:51,560 Speaker 2: that's all those three parties pulling in different directions. That's 50 00:03:51,600 --> 00:03:53,560 Speaker 2: going to be a tough ask. But there was one 51 00:03:53,640 --> 00:03:58,000 Speaker 2: number that stood out of the results apart, and I'll 52 00:03:58,080 --> 00:03:59,920 Speaker 2: go into some of the other numbers in a bit, 53 00:04:00,200 --> 00:04:01,800 Speaker 2: there was one number that just stood out to me. 54 00:04:02,960 --> 00:04:06,120 Speaker 2: Thirty two percent reduction in mishandled bag. So it's this 55 00:04:06,280 --> 00:04:10,240 Speaker 2: low hanging fruit to Vanessa Hudson has got to start 56 00:04:10,360 --> 00:04:14,120 Speaker 2: picking to start winning over customers again. Yeah. 57 00:04:14,160 --> 00:04:16,840 Speaker 1: In fact, COUNTUS revealed it has spent more than two 58 00:04:16,960 --> 00:04:20,480 Speaker 1: hundred and thirty million dollars improving what they call customer 59 00:04:20,640 --> 00:04:25,680 Speaker 1: pain points. It's really evident that Vanessa Hudson grasped from 60 00:04:25,720 --> 00:04:28,839 Speaker 1: the beginning that this was her main job, isn't it. 61 00:04:28,960 --> 00:04:31,919 Speaker 2: Yeah, Alan Joways ran the airline for shareholders. He was 62 00:04:31,920 --> 00:04:35,960 Speaker 2: the investor's friend. He was able to really hack into costs, 63 00:04:36,200 --> 00:04:38,680 Speaker 2: take billions of dollars out of the cost space. He 64 00:04:38,760 --> 00:04:41,800 Speaker 2: ran it fairly tight in terms of investment, didn't invest 65 00:04:41,839 --> 00:04:44,560 Speaker 2: in new planes, ran the old planes as hard as 66 00:04:44,560 --> 00:04:47,520 Speaker 2: I could within a margin of safety of course, obviously. 67 00:04:47,680 --> 00:04:51,000 Speaker 2: So he was winning over investors delivering these huge profits, 68 00:04:51,400 --> 00:04:56,880 Speaker 2: but in doing so really got customers and also employees offside. 69 00:04:57,800 --> 00:05:00,640 Speaker 2: So Vanessa Hudson gets some bigger waiting for her bonus 70 00:05:00,720 --> 00:05:06,560 Speaker 2: on customer satisfaction and things like reputational issues and so on. 71 00:05:06,920 --> 00:05:10,240 Speaker 2: So that means that she's really motivated now to make 72 00:05:10,279 --> 00:05:12,839 Speaker 2: sure that she's winning over customers. 73 00:05:14,760 --> 00:05:19,520 Speaker 1: Quantus has started closely measuring customer satisfaction, and they're claiming 74 00:05:19,600 --> 00:05:22,560 Speaker 1: people like them more, a twenty two percent lift in 75 00:05:22,600 --> 00:05:26,560 Speaker 1: their net promoter score and twelve points up on reputation. 76 00:05:27,360 --> 00:05:32,120 Speaker 1: Thursday's results also showed staff attrition had fallen from almost 77 00:05:32,279 --> 00:05:36,880 Speaker 1: nine percent to six percent, so people are quitting less. 78 00:05:38,160 --> 00:05:40,719 Speaker 1: Now let's talk about the numbers, Eric, and I'm hoping 79 00:05:40,720 --> 00:05:44,120 Speaker 1: you can explain them for me. Quantus delivered a two 80 00:05:44,160 --> 00:05:47,800 Speaker 1: point zero eight billion dollar underlying profit for the year, 81 00:05:48,080 --> 00:05:51,159 Speaker 1: and that's down a little bit from the previous year's 82 00:05:51,160 --> 00:05:54,880 Speaker 1: profit of two point four to seven billion. But there's 83 00:05:55,000 --> 00:05:59,360 Speaker 1: what seems to me to be an interesting contrast. Underlying 84 00:05:59,400 --> 00:06:03,320 Speaker 1: earnings were nearly sixteen percent, but revenue was up ten percent. 85 00:06:03,640 --> 00:06:05,400 Speaker 1: Can you unpack all that for me and explain what 86 00:06:05,440 --> 00:06:06,000 Speaker 1: it all means. 87 00:06:06,360 --> 00:06:10,760 Speaker 2: So, what we're seeing here that although more money is 88 00:06:10,800 --> 00:06:13,520 Speaker 2: coming in the door, less of it is sticking around. 89 00:06:13,680 --> 00:06:16,560 Speaker 2: And the reason is that all these initiatives that Vanessa 90 00:06:16,600 --> 00:06:20,159 Speaker 2: HUDs says is doing is more costly. She's got to 91 00:06:20,200 --> 00:06:22,360 Speaker 2: spend a lot more money to win over customers, to 92 00:06:22,839 --> 00:06:26,000 Speaker 2: put wine back into to the service, or the sweet 93 00:06:26,040 --> 00:06:28,240 Speaker 2: biscuit ram and the dry biscuit. That all that comes 94 00:06:28,279 --> 00:06:31,400 Speaker 2: at a cost. It's a really big costly thing when 95 00:06:31,400 --> 00:06:35,040 Speaker 2: you when it accumulates over a huge network. There's another thing, 96 00:06:35,120 --> 00:06:37,920 Speaker 2: and she's doing a lot to win over her own workers. 97 00:06:39,080 --> 00:06:43,159 Speaker 1: Quantus offers bonuses for staff to stay and they're committed 98 00:06:43,200 --> 00:06:46,279 Speaker 1: to sixty million dollars to enact the federal government's same job, 99 00:06:46,440 --> 00:06:50,000 Speaker 1: same pay reforms. That means a contract cabin crew member 100 00:06:50,120 --> 00:06:52,839 Speaker 1: will now be paid the same as a Quantus staffer. 101 00:06:53,720 --> 00:06:57,240 Speaker 1: Quantus dealt with its negotiations with the union quickly, something 102 00:06:57,400 --> 00:06:59,800 Speaker 1: Eric says was a signal to the unions that Vanessa 103 00:06:59,839 --> 00:07:04,120 Speaker 1: huh And is choosing her battles and something else is 104 00:07:04,160 --> 00:07:08,240 Speaker 1: making us all feel a little kinder. Prices are coming down, 105 00:07:08,640 --> 00:07:11,320 Speaker 1: thanks in part to the arrival of airlines like Singapore 106 00:07:11,320 --> 00:07:16,840 Speaker 1: Airlines and Emirates all flying out of Australia into international destinations. 107 00:07:17,760 --> 00:07:20,160 Speaker 2: This comes at a time when there's more capacity coming 108 00:07:20,240 --> 00:07:25,280 Speaker 2: to the Australian aviation market too. So international carriers, Singapore Airlines, 109 00:07:25,600 --> 00:07:28,240 Speaker 2: your Emirates, they're all sort of trying to jockey to 110 00:07:28,280 --> 00:07:31,200 Speaker 2: fly bigger planes here and they're there child jocking for 111 00:07:31,320 --> 00:07:34,240 Speaker 2: more to what capacity? Do have to try and get 112 00:07:34,280 --> 00:07:35,160 Speaker 2: more entry points too? 113 00:07:35,280 --> 00:07:40,880 Speaker 1: Or someone to Australia In the UK and US right now, 114 00:07:40,920 --> 00:07:45,360 Speaker 1: a controversy is raging about how airlines, particularly budget carriers, 115 00:07:45,480 --> 00:07:50,200 Speaker 1: treat their passengers. In particular, should parents be able to 116 00:07:50,280 --> 00:07:53,400 Speaker 1: sit next to their young children? There are the woman 117 00:07:53,440 --> 00:07:55,880 Speaker 1: who refused to give up her airplane seat for a 118 00:07:55,960 --> 00:07:59,200 Speaker 1: mom who was in distress. In Australia, We'd say, of course, 119 00:07:59,240 --> 00:08:03,320 Speaker 1: the answer is but on budget carriers, which require passengers 120 00:08:03,400 --> 00:08:07,400 Speaker 1: to pay extra for particular seats. Some families are faced 121 00:08:07,440 --> 00:08:11,000 Speaker 1: with the fear of being separated from little kids on 122 00:08:11,080 --> 00:08:11,560 Speaker 1: a flight. 123 00:08:12,320 --> 00:08:15,720 Speaker 2: It's such a tough industry, such a tough industry to 124 00:08:15,840 --> 00:08:18,840 Speaker 2: work in, and there's one There was one famous aviation 125 00:08:19,040 --> 00:08:22,000 Speaker 2: CEO who once quipped, don't forget the olives. 126 00:08:22,280 --> 00:08:24,200 Speaker 1: The point of that is you can land all the 127 00:08:24,240 --> 00:08:28,640 Speaker 1: planes safely but still enrage the customers if you don't 128 00:08:28,680 --> 00:08:30,000 Speaker 1: get everything right. 129 00:08:30,720 --> 00:08:34,800 Speaker 2: It's really capital intensive. You've spend so much money to 130 00:08:34,840 --> 00:08:40,360 Speaker 2: get these things moving around. We as traveling public, demand 131 00:08:40,679 --> 00:08:44,160 Speaker 2: a more personalized service. We do that with we expected 132 00:08:44,200 --> 00:08:46,840 Speaker 2: when we order things on Amazon, we expected when we 133 00:08:46,880 --> 00:08:50,120 Speaker 2: go to the supermarket. Aviation has tried to step up 134 00:08:50,160 --> 00:08:52,880 Speaker 2: to the market that and many times it has failed 135 00:08:52,920 --> 00:08:57,200 Speaker 2: to do that. That's the challenge that it's got to 136 00:08:57,240 --> 00:09:02,080 Speaker 2: continue being a mass tran an option but offering a 137 00:09:02,120 --> 00:09:03,720 Speaker 2: personalized service. 138 00:09:07,240 --> 00:09:12,679 Speaker 1: Coming up? Can Vanessa Hudson rescue this battered brand. Subscribers 139 00:09:12,679 --> 00:09:15,080 Speaker 1: to The Australian a first to hear breaking news from 140 00:09:15,160 --> 00:09:18,319 Speaker 1: the business world, Join us at the Australian dot com 141 00:09:18,360 --> 00:09:20,720 Speaker 1: dot au. It's a lot cheaper than a packet of 142 00:09:20,720 --> 00:09:24,040 Speaker 1: ice cold peanuts and a glass of warm Chardonnay on 143 00:09:24,080 --> 00:09:39,199 Speaker 1: a plane. We'll be back after this break. I've often 144 00:09:39,320 --> 00:09:43,440 Speaker 1: wondered if in retrospect we would consider Alan Joyce as 145 00:09:43,440 --> 00:09:47,559 Speaker 1: a kind of business genius who kept Quantus flying after 146 00:09:47,600 --> 00:09:50,040 Speaker 1: the pandemic, who ripped a huge amount of cost out 147 00:09:50,040 --> 00:09:52,560 Speaker 1: of the business, who was pretty ruthless in some of 148 00:09:52,559 --> 00:09:56,079 Speaker 1: the decisions that he made, or if we would think, actually, 149 00:09:56,120 --> 00:09:59,920 Speaker 1: he destroyed this airline's brand. How do you think history 150 00:10:00,160 --> 00:10:00,880 Speaker 1: judging Joyce? 151 00:10:01,559 --> 00:10:04,520 Speaker 2: He was there far too long as a CEO. Fifteen years. 152 00:10:04,520 --> 00:10:07,920 Speaker 2: It's too long for a publicly listed company. In recent weeks, 153 00:10:07,960 --> 00:10:10,959 Speaker 2: we've seen a board review come out and would take 154 00:10:11,040 --> 00:10:13,720 Speaker 2: look and so we're crawing back nine million dollars of 155 00:10:13,880 --> 00:10:16,520 Speaker 2: Alan Joyce's bonus from his last year. Now, he did 156 00:10:16,600 --> 00:10:19,800 Speaker 2: get a fair bit amount in previous years, so I 157 00:10:19,840 --> 00:10:23,480 Speaker 2: don't think he will be crying poor. He did transform 158 00:10:23,760 --> 00:10:28,520 Speaker 2: expectations around Quantus, because the Quantus ads to circle back 159 00:10:28,559 --> 00:10:32,800 Speaker 2: where we started. That was of an era of less competition. 160 00:10:34,640 --> 00:10:39,080 Speaker 2: There weren't discount carriers in the world. That was, ticket 161 00:10:39,080 --> 00:10:43,040 Speaker 2: prices were high, less flexibility was in the system, so 162 00:10:43,080 --> 00:10:45,880 Speaker 2: the margins were much higher. So they could afford that. 163 00:10:46,200 --> 00:10:48,440 Speaker 2: We couldn't afford to fly like that, but they were 164 00:10:48,480 --> 00:10:52,360 Speaker 2: certainly as a different era. Alan Joyce came. He actually 165 00:10:52,440 --> 00:10:55,800 Speaker 2: worked at Ryanair and came to Quantas. He's made genius. 166 00:10:55,800 --> 00:10:59,040 Speaker 2: When he started at Quantus was his mathematician. He's a 167 00:10:59,160 --> 00:11:02,640 Speaker 2: trained as actually a rocket scientist. His mate genius was 168 00:11:03,640 --> 00:11:08,240 Speaker 2: figuring out more efficient waves and routes to fly the 169 00:11:08,240 --> 00:11:12,440 Speaker 2: aeroplanes that on the margins saved on fuel on every flight. 170 00:11:12,480 --> 00:11:14,880 Speaker 2: But you add that up through the network again, suddenly 171 00:11:15,440 --> 00:11:20,439 Speaker 2: marginal increases is quite significant in terms of savings. He 172 00:11:21,600 --> 00:11:24,600 Speaker 2: built up jet Star, started jet Star under the former 173 00:11:24,679 --> 00:11:29,480 Speaker 2: CEO Jeff Dixon. Now in today's results fast forward to today, 174 00:11:29,720 --> 00:11:33,800 Speaker 2: Suddenly Jetstar was a really strong performer. It really appeals 175 00:11:33,840 --> 00:11:36,640 Speaker 2: to this type of environment that Australia is in at 176 00:11:36,640 --> 00:11:39,200 Speaker 2: the moment. Everyone is saving their pennies at cost of 177 00:11:39,280 --> 00:11:42,120 Speaker 2: living is such a big issue. But he managed to 178 00:11:42,160 --> 00:11:46,400 Speaker 2: do what many many major airlines, main brand airlines that 179 00:11:46,480 --> 00:11:48,360 Speaker 2: haven't been able to do. And he's able to have 180 00:11:48,440 --> 00:11:51,160 Speaker 2: this low cost airlines sit within the same structure as 181 00:11:51,200 --> 00:11:56,000 Speaker 2: a full freight mainline airline. So presh Shareways has tried it. 182 00:11:56,080 --> 00:11:59,120 Speaker 2: They didn't work for them. Luftans has tried it didn't 183 00:11:59,160 --> 00:12:02,640 Speaker 2: work for them even and I've tried it. But perhaps 184 00:12:03,160 --> 00:12:06,360 Speaker 2: history over time will look at it and say he 185 00:12:06,760 --> 00:12:10,599 Speaker 2: stayed too long and it was the airline that needed replenishment. 186 00:12:13,200 --> 00:12:15,640 Speaker 1: Vanessa Hudson came in and one of her first acts 187 00:12:15,720 --> 00:12:18,600 Speaker 1: was to apologize to people and to the flying public 188 00:12:18,640 --> 00:12:20,480 Speaker 1: and to the Quantus staff and say, I'm going to 189 00:12:20,520 --> 00:12:25,160 Speaker 1: be different. Do you think she's capable of rebuilding Quants 190 00:12:25,200 --> 00:12:28,880 Speaker 1: to back where it was as a really beloved Australian brand. 191 00:12:29,240 --> 00:12:31,240 Speaker 2: It can be done. So all of us that have 192 00:12:31,280 --> 00:12:33,400 Speaker 2: been overseas and it's the middle of the night, we 193 00:12:33,440 --> 00:12:36,120 Speaker 2: don't know where we are, and then suddenly we're walking 194 00:12:36,120 --> 00:12:39,559 Speaker 2: through an airport and we see a Quantus tail somewhere. 195 00:12:39,720 --> 00:12:43,000 Speaker 2: You know, the old heartstrings of cool. She doesn't have 196 00:12:43,040 --> 00:12:45,680 Speaker 2: to win over people. She just has to make sure 197 00:12:45,720 --> 00:12:49,440 Speaker 2: that Conus doesn't push people away. Now she's fighting in 198 00:12:49,440 --> 00:12:52,160 Speaker 2: a really tough market. So you've got the Middle Eastern 199 00:12:52,200 --> 00:12:54,960 Speaker 2: airlines em Roots and the Antyads and they run on 200 00:12:55,000 --> 00:12:59,200 Speaker 2: a different cost structure too, so they're really competitive and 201 00:12:59,200 --> 00:13:03,760 Speaker 2: they're offering full service and new araplanes. Vanessa Hudson and 202 00:13:03,920 --> 00:13:07,160 Speaker 2: these are decisions made many years ago, but she's now 203 00:13:07,240 --> 00:13:10,600 Speaker 2: getting the beneficiary she's benefiting from getting all these brand 204 00:13:10,640 --> 00:13:13,520 Speaker 2: new eraplanes. Now these were signed off by Allen Joyce 205 00:13:13,640 --> 00:13:15,560 Speaker 2: in the midst of COVID. It was a long term 206 00:13:15,600 --> 00:13:20,040 Speaker 2: decision that's now starting to come to fruition. You walk 207 00:13:20,080 --> 00:13:21,920 Speaker 2: on a brand new plane, you think, oh, this is okay, 208 00:13:21,920 --> 00:13:24,040 Speaker 2: this is good as opposed to a fifteen or twenty 209 00:13:24,080 --> 00:13:28,600 Speaker 2: year old old war horse. But that also these new 210 00:13:28,600 --> 00:13:31,160 Speaker 2: planes make a big difference too. They're much more efficient 211 00:13:31,160 --> 00:13:33,240 Speaker 2: to run. They don't need to don't need to run 212 00:13:33,280 --> 00:13:35,640 Speaker 2: as many staff around them, you don't need to. The 213 00:13:35,679 --> 00:13:40,000 Speaker 2: engineering costs come right down as well. So Vanessa Hudson's 214 00:13:40,280 --> 00:13:42,880 Speaker 2: trick is to not push people away, to win them 215 00:13:42,920 --> 00:13:47,800 Speaker 2: over and don't lose their bags. 216 00:13:49,920 --> 00:13:55,000 Speaker 1: Eric Johnston is an associate editor with The Australian. Thanks 217 00:13:55,040 --> 00:13:57,160 Speaker 1: for joining us on the front this week. Our team 218 00:13:57,320 --> 00:14:01,280 Speaker 1: is Kristin Amiot, Jasper lik LEAs Temmaglue, Josh Burton, Tiffany 219 00:14:01,320 --> 00:14:09,719 Speaker 1: de mac and may Claire Harvey.