Qantas chair John Mullen AM is motivated to restore trust in the Flying Kangaroo but does not underestimate the breadth, depth or complexity of the task ahead. He is candid about the path forward for digesting learnings, reshaping leadership dynamics and navigating a new era of customer and capital investment.
“Chairing any company is a privilege, but one as iconic as Qantas is doubly exciting,” says John Mullen, fresh from his first official appearance at the airline’s AGM in late 2024. He had taken over from former chair Richard Goyder AO in September.
The airline plays a dual role — both as a business navigating the challenges of the aviation industry and as a symbol of national identity, posits Mullen. “Whether you’re a shareholder or not, you see Qantas as part of Australia’s reputation. We have a huge imperative to ensure we’re not just running it as a business, but also fulfilling broader societal ambition.”
But the privilege comes with baggage. The Qantas Governance Review Report, released on 8 August 2024, laid bare the deep challenges facing the airline’s leadership. Prepared by ex-McKinsey & Co partner Tom Saar, it is strong in its diagnosis — the airline’s approach to decision-making, non-financial risk and organisational culture, among other factors, need to change.
Saar sets the scene for the 12 months leading up to October 2023, as Qantas emerged from the COVID-19 crisis, and the sequence of actions and events that ultimately eroded stakeholder trust. Customer service issues, including flight delays, lost baggage and long call centre wait times, contributed to growing dissatisfaction. The airline’s handling of COVID-related travel credits and post-pandemic pricing drew criticism. Legal challenges dominated headlines, including the ACCC proceedings over cancelled flights and the High Court ruling that Qantas’ outsourcing of ground handling services, resulting in 1700 redundancies, was unlawful.
Media controversies added to the morass, and the company’s relationship with the government and appearances at Senate Committees were meticulously scrutinised. Internally, concerns were raised about support for frontline employees, while externally, Qantas’ strong profit performance in 2023 contrasted sharply with public dissatisfaction. Finally, discontent arose when former CEO Alan Joyce AC sold a large parcel of shares in June 2023, and shareholder backlash over executive remuneration at the 2023 AGM underscored broader frustrations with the airline’s governance.
Mullen is not shy in evaluating Qantas’ decision-making during this period, but believes context is key. “In retrospect, some of those decisions probably weren’t the best idea, but that’s quite easy looking back later on when you’re not there in the heat of the moment. I’m very satisfied no-one deliberately did anything wrong. On the contrary, they were trying very hard. But some errors were made and when the airline restarted, those issues compounded.”
The complexities of recalling furloughed staff, the unpredictability of government restrictions and an unstable workforce added to the difficulties. “I’m not excusing some of the errors, but people need to appreciate just how tough that period was.”
Mullen considers the aviation sector was uniquely impacted. “As Telstra chair during COVID, I saw the dramatic effects on the company, but we weren’t about to go bankrupt. Airlines, restaurants and hospitality businesses were devastated.”
To recover, transparency was the order of the day, he says. “A critically important decision to rebuild trust was to be transparent. I’m sure you’ve seen many examples where the cover-up is worse than the original sin. We were extremely focused on making sure, warts and all — on showing this is what happened and this is what we’re going to do about it. There’s nothing hidden away in there.” Mullen is determined the review learnings stimulate forward momentum. “Getting a balance between acknowledging the past, dealing with the past, being transparent, but at the same time, not dwelling in the past. We have to move forward.”
Managing management
The first test of this careful balancing act will be played out in a reshaped board’s relationship to the refreshed executive. The review highlighted the previous board’s excessive deference to the former long-tenured CEO, who some regarded as having successfully navigated past operational and financial crises. That dynamic limited robust board engagement and delayed key issues from reaching directors. Saar challenged the board going forward to address past failures to engage the former group leadership team, which he said operated under a “command-and-control” leadership style.
Mullen agrees the board should have been more proactive. “Although management ended up probably getting half the blame, the board could have stopped a number of the things that happened,” he says. “They could have done, they should have done, and they didn’t.”
Recalling his own experience as an executive (Mullen was CEO at Asciano, DHL and TNT Express Worldwide), he champions early problem-solving. “Bad news shared early is the best investment. If you sit on it, by the time it blows up, it’s your fault. But if you bring it to the board straight away, it’s our problem and we’re all in it together.”
New CEO, and former CFO, Vanessa Hudson will play a foundational role in resetting company culture. “None of us [on the board] are perfect,” says Mullen. “I’m sure we’ll make lots of mistakes, but hopefully we won’t make big ones like that. I believe Vanessa and the team have the trust now to share the good with the bad.”
Mullen acknowledges stakeholder concerns that 30-year company veteran Hudson represents continuity rather than change. “I was aware of the chatter — people questioning why would it be any different? For a while, the jury was out. But I can unequivocally say she is very much her own person, with a distinct culture and approach.”
He believes Hudson’s leadership style is the key asset. “She has no ego, which I really admire. It’s critical in business management and boards. She’s humble, capable and knows the industry.”
For Mullen, leadership is fundamentally about respect and relatability. “People will follow because they think they have to, but they won’t follow it because they really believe in it,” he says. “In the boardroom, loud voices can crowd out more diffident voices who often have a lot to add. As chair, your role is to draw that out and let people speak. The same applies to management. If a CEO is too dominant, people don’t question and there’s not a culture where speaking up is encouraged.”
Going forward, trust between the chair and CEO will be crucial, but not too cosy, affirms Mullen. “You’re never going to be best friends, but they need to know you have their back. If something is about to go wrong, the first instinct should be, how do we help? I hate seeing boards abandon executives just because of public criticism, but actually, everyone was in it.”
While he knows there’s no exact formula for a perfect board dynamic, Mullen is clear on the board’s role to foster open communication. “We protect shareholders’ interests and the company’s reputation, but we’re not police officers,” he says. “If you err too far on that side, you end up with a management team who are very nervous as to what they share, in an environment where you want them to be absolutely transparent.”
Board reboot
Mullen sees Qantas’ board renewal as a work in progress. “It’s early days. We’ve lost quite a few people during this transition and are now defining what a best-in-class board should look like. We’re evaluating what skills the industry needs, overlaying the skills we have and identifying the skill gaps.”
Taking lessons from his extensive experience, what is Mullen’s framework for board composition? Diversity, he says, is essential and has held him in good stead over his career — not just for representation, but for better decision-making. “It’s hard for people trained in the old way of just being focused on capital returns, to open their mind enough to that.”
His comments seem particularly apposite against a backdrop of growing discontent and discourse about corporate diversity initiatives. In Mullen’s view, a benefit of diversity is it produces a less hierarchical outcome. A former CEO doesn’t necessarily possess a superior perspective.
He categorises an effective board into three key groups. First, industry experts — directors with deep sector knowledge who can challenge management with authority. However, he warns against overloading a board with insiders. “You don’t want everybody in that area, otherwise you would end up all the same as management.”
The second group consists of governance specialists — directors who scrutinise every detail, ensuring robust oversight beyond audit, into remuneration and risk.
The third group, he says, is diversity “in the real sense of the word”. “Directors who come from totally different backgrounds to the rest of us — different values, probably different nationalities, geographies, different experiences in life — challenge the traditional way of thinking around a board. You so often see people trying to end up back where they’re comfortable, where everybody looks like they do. You need to fight that the whole time and make sure you bring in totally different perspectives.”
Mullen says board composition should be substance-driven. “We sometimes get caught in process as much as outcome. A capability review where we tick all the boxes might say we’re all geniuses, but have we actually achieved diversity around the board?”
He cites Brambles as an example of change done right. “Conventional wisdom says board members should be ex-CEOs or senior partners from top firms. We’ve got some very capable people with no big-company board experience, and they contribute just as much, if not more, than [those with] the classical backgrounds. I’m very motivated by that, it’s very rewarding.”
He is committed to ensuring the right governance structure is in place at Qantas, with recruitment for new directors commencing in earnest in early 2025. “We’ll be recruiting people from quite different backgrounds to come in to help management build the future.”
Customers, capacity and capital
In the short term, Qantas starts 2025 on a mixed footing for a key pillar of its uplift strategy — restoring customer confidence. Recent data from the Bureau of Infrastructure and Transport Research Economics shows it remained Australia’s most on-time major domestic airline for the fifth consecutive year, with 76.1 per cent of flights departing on time in 2024 — improving from 74.1 per cent in 2023. It outperformed Virgin in 10 out of 12 months, although in December, its on-time departure rate was lower than its competitor.
Mullen notes strong demand for air travel complicates the messaging. “We’re a slightly positive victim of circumstance,” he explains. “Demand is really high, which creates the perception that fares have risen.”
He argues the reality is more nuanced. “The industry hasn’t raised fares, but when flights are full, the cheapest seats sell out first. That means travellers are left with higher-tier tickets, making it seem like prices have increased.”
In a climate of cost-of-living pressures, pricing perception is a sensitive issue. “We have to deal with it — it affects all B2C businesses, from banks to supermarkets,” says Mullen. “Customers need to feel they’re getting value for money and not being taken advantage of.”
Communicating these dynamics will be an enduring challenge, where many consumers don’t distinguish between rising average fares and actual price increases, adding to broader public frustration. While fluctuations in corporate earnings may go unnoticed, higher supermarket prices are felt immediately, he argues. “As a corporate sector, we haven’t done enough to explain the real facts behind these perceptions.”
High demand also limits operational flexibility. “When flights are full, resilience is lower,” says Mullen. “In quieter times, you can deploy extra aircraft. But right now, with the industry stretched, delays are harder to recover from.”
This fuels passenger frustration. “People think, ‘Not another delay’ and at the same time, feel like they’re paying higher prices.”
The main lever to address capacity issues, he confirms, is expanding the fleet. Qantas is undergoing its largest capital investment plan, although deliveries have been slower than expected. In FY24, the airline received 11 new aircraft, with 20 more scheduled in FY25.
Mullen is firm that even Qantas’ harshest critics want it to succeed. “It has a lot of goodwill. That’s a great place to start from.”
A full dance card
John Mullen is one of Australia’s most experienced directors and chairs, with Brambles, Treasury Wine Estates and, a personal passion, the Australian National Maritime Museum, rounding out his current chair portfolio. He says that taking on the Qantas role was an unexpected addition.
“It came out of the blue. It was such an honour to be asked and I wasn’t going to turn it down. I wasn’t looking for another board seat at the time, I was comfortable with what I had. But I inherited it and now I’m extremely conscious of trying to do a good job.”
He acknowledges concerns about his workload, but remains confident in his ability to balance responsibilities.
“I know I have to reduce my commitments over time — proxy advisers and others have their benchmarks. But you can’t just suddenly walk away from a company.”
A responsible transition is critical, especially if there may be ongoing matters behind the scenes, like CEO transitions or other structural changes.
Mullen has had frank discussions with external observers regarding their assessments.
“I’ve asked them, have you ever been a director of a large ASX company? Have you asked my boards or fellow directors whether I’m doing a good job? Have I missed board meetings? Have I been absent for key decisions? The answers are no, no, no and no. So, with the greatest respect, if I am doing a good job or not, it’s unfair to judge my performance based purely on the number of board seats I hold.”
Ultimately, Mullen’s motivation is simple. “I love it. I enjoy business. I feel committed.”
“In the boardroom, loud voices can crowd out more diffident voices who often have a lot to add. As chair, your role is to draw that out and let people speak.”
Hitting reset
Challenging assumptions is central to Qantas’ future governance and overcoming the perception hangover of recent times.
Balancing financial and non-financial risk, Mullen sees a need for recalibration. “Some businesses focus entirely on the customer and have gone broke trying to do it,” he says. “Qantas probably erred too far the other way — driving shareholder returns at the expense of reputation, service and customer experience. That was a clear lesson from recent years.” While not always intentional, he acknowledges this belief had taken hold in the market and among the public.
Workforce relations could also have been handled differently. Legal advice may have justified the airline’s position in some instances, but that alone shouldn’t have dictated an adversarial approach. “One of the self-inflicted wounds was a very legalistic approach to some of these things. If the legal advice was: ‘We’re in the right, so you should fight’, there was a tendency to follow that. But even if you are right, is it worth it in the eyes of the public? They got that balance a little wrong. With Vanessa’s leadership, we’ve been working hard to put that behind us and move forward.”
He believes progress will come from focusing on solutions rather than assigning blame. “We need to correct it properly in the eyes of employees, unions, government, the public, and move on.”
Some gaps will be harder to bridge. Mullen pushes back against claims of political favouritism, particularly regarding upgrades for government figures. “It became a political battle. Upgrades happen all the time — many politicians are frequent flyers. The way it was represented as some sort of special favours for this or that is an unfair characterisation. Unfortunately, we live in a world where all sides of politics try to score points on the other, and these things get picked up and overblown sometimes.”
His view is that the national airline of any country is inevitably going to have a political role. “Every country zealously guards its air traffic rights. If you opened up the whole industry and said, ‘Anybody can fly anywhere’, Qantas would go out of business along with most other airlines. No government wants that. They want to protect their own sovereign status.”
One area of disconnect he sees — although it belies a positive insight about the business — is the contrast between Qantas’ bottom-up safety culture and its top-down leadership approach.
“Tom Saar’s review highlighted a management culture where people struggled to speak up. Yet in safety, the opposite was true. Anyone, even a cleaner, can ground an aircraft if they suspect a safety risk, with no penalty for a false alarm. That’s an extraordinary contrast. If that safety culture flowed through to management, it would be a different place.”
Safety, insists Mullen, remains the airline’s highest priority. “I’ve worked in industrial businesses all my life and, unfortunately, any company can have a fatal accident. But few industries have the potential to lose 300 lives in a single event. Before joining the board, my biggest concern was whether Qantas had lost its safety culture with all this going on. I was very satisfied it hadn’t.”
This article first appeared under the headline ‘Altitude Adjustment’ in the March 2025 issue of Company Director magazine.
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