Qantas' $12b Question For New CEO
Her main challenge will be balancing shareholder returns, customer service, and staff engagement with investing capital. This is a common balancing act in the airline industry. Airlines need large amounts of capital to invest. It can be difficult to balance investing with pleasing shareholders, customers, and staff. Finding a solution to this challenge will be crucial for her success.
Qantas is going to invest a lot of money. This is the biggest investment they have ever made. People know about it.
Qantas needs to invest in its business. The pandemic caused financial troubles for the airline. It also disrupted plane manufacturing. Qantas needs to spend around $10.1 billion in next three years. This is according to Jarden's calculations. UBS estimates the cost to be around $12 billion. This investment is needed over the next five years.
Hudson is Qantas' finance boss. Qantas has two programs, Project Winton and Project Sunrise. Hudson helped with the fleet investment part of these programs. Qantas plans to get at least 40 narrow body airplanes. Project Sunrise is for long-range flights.
Hudson has a big job as CEO. He needs to manage a lot of deliveries. One plane comes every three weeks. This will continue for three years.
Investors are curious about how the person in charge will manage to balance large expenditures with profit, cash flow, and keeping shareholders content.
Hudson thinks she can do it. She doesn't agree with what the market is worried about with Qantas' capex program. She thinks it won't hurt Qantas financially.
She said that her cost-cutting plan, which saved the airline $1 billion during the pandemic, included job cuts of nearly 10,000. She believes this reset the airline’s cost base. Also, she stated that the technology on the new aircraft will allow the airline to make another significant change.
Hudson says the new planes are cheaper per seat than old ones. They can also fly further.
Project Sunrise brings more growth.
We are sure that we can handle the capex that's coming. We can also keep rewarding our shareholders during this time.
Qantas shareholders made the stock go down by almost 3% on Tuesday. This is weird because it was already known that Joyce would leave. The chairman, Goyder, wanted to keep the same strategy by choosing Hudson instead of someone from outside.
Hudson was the likely choice for many fund managers and analysts. She helped guide the group through the pandemic and has an abundance of experience in various aspects of the business, including fleet renewal.
A person who invests predicted that Hudson will be less public than Joyce. They also think Hudson won't create as much division. We don't know if this means Hudson can handle talking with governments and unions like Joyce did.
The cost-cutting program of Qantas made the relation with unions bad. She stays close to the program, so she will keep the bad relation. However, she thinks that Qantas treats their staff, shareholders, and customers well. She mentioned the $400 million Qantas used for customer service and the bonuses for their staff.
More and more women are becoming CEOs in Australia. Hudson is the latest one, joining a list of powerful women like Vicky Brady and Meg O'Neill. Shemara Wikramanayake, Fiona Hick, and Leah Weckert are also leading big companies.
Hudson is happy to be a CEO who's a woman. Her daughters, who are 18 and 21, gave her the best feedback. She appreciates their words and wanted to show them how to lead by example. It made her feel really good to hear their thoughts.
