{"id":9442,"date":"2023-11-04T04:26:08","date_gmt":"2023-11-04T04:26:08","guid":{"rendered":"https:\/\/infundpros.com\/business\/australia-falls-out-of-love-with-qantas\/"},"modified":"2023-11-04T04:26:08","modified_gmt":"2023-11-04T04:26:08","slug":"australia-falls-out-of-love-with-qantas","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=9442","title":{"rendered":"Australia falls out of love with Qantas"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=be9beb57-05da-4fc9-9c05-e6fe2ac3510a\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>In the past three months, Qantas has been found guilty of illegally sacking 1,700 workers, been accused of offering \u201cghost flights\u201d to its customers, and lost 20 per cent of its stock market value.<\/p>\n<p>So when investors were asked at the airline\u2019s annual meeting on Friday whether they would back a pay package for its executives, the result was a resounding no.<\/p>\n<p>In a severe snub to Australia\u2019s flag carrier, 83 per cent of shareholders voted against the proposal. The fiery meeting at the Melbourne Convention and Exhibition Centre has underlined the immensity of the task facing the new board and management team at Qantas to restore its reputation. <\/p>\n<p>Andrew Charlton, a former Qantas executive and managing director of consultancy Aviation Advocacy, said Australians used to be proud of Qantas. \u201cIf you take that loyalty for granted\u2009.\u2009.\u2009.\u2009that starts to chip away. The seemingly ceaseless scandals and service lapses mean that now, Qantas has even lost Australia,\u201d said Charlton.<\/p>\n<p>The carrier, known as the \u201cFlying Kangaroo\u201d, fell out of favour with unions, regulators, customers and now shareholders during the 15-year tenure of Alan Joyce, who stepped down early two months ago.<\/p>\n<p>Joyce\u2019s steely focus on the carrier\u2019s balance sheet meant that the airline exited the pandemic in good financial health, with Qantas chair Richard Goyder praising the former chief for navigating the company through \u201cthe most challenging and tumultuous period in the airline\u2019s history\u201d in May. <\/p>\n<p>In August, Qantas reported a A$2.5bn (US$1.6bn) underlying pre-tax profit for the year ending in June and announced a A$500mn share buyback to reward shareholders for their support.<\/p>\n<figure class=\"n-content-image n-content-image--full\"><picture><source media=\"(min-width: 700px)\"  width=\"2100\" height=\"1500\"><\/source><source media=\"(max-width: 490px)\"  width=\"900\" height=\"1200\"><\/source><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/11\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/738a3a20-7a38-11ee-9899-31a5311be585-standard.pn.png\" alt=\"Line chart of Share price (A$) showing Qantas' share price has fallen \" data-image-type=\"graphic\" width=\"2100\" height=\"1500\"><\/picture><\/figure>\n<p>However customers were fed up with lost bags and cancelled flights as a result of cost-cutting measures introduced by Joyce who was lambasted after describing travellers as \u201cnot match fit\u201d last year when there were long queues at airports. He later clarified: \u201cThe simple fact is our operational performance hasn\u2019t been up to the standard.\u201d<\/p>\n<p>It is now shareholders who have turned on Qantas as the company has been hit by a series of scandals. The consumer regulator sued the airline in August, accusing it of charging for ghost flights, selling thousands of tickets for flights that had already been cancelled.<\/p>\n<p>Shareholders criticised the ghost flights defence offered by the airline, namely its argument that it does not sell a ticket when the customer books a flight but a \u201cbundle of rights\u201d. <\/p>\n<p>Earlier in September, a court ruled that Qantas had illegally sacked 1,700 workers during the pandemic, leaving it facing a mammoth compensation bill. <\/p>\n<p>Goyder, who alongside two long-serving board members is standing down this year, described the annual meeting vote as \u201coverwhelming\u201d.<\/p>\n<p>\u201cWe hear the message,\u201d he said as investors lined up at the meeting to take potshots at the company. One investor demanded to know if any of the people on stage had travelled economy class on an international Qantas flight in the past year.<\/p>\n<p>Stephen Mayne, a Qantas shareholder and activist investor, said shareholders had been the \u201cbedrock\u201d of support during the Joyce era but the company had now lost that constituency too. \u201cShareholders were the last to fold, but collectively they are now quite feral and seeking restitution,\u201d he said.<\/p>\n<p>Rachel Waterhouse, chief executive of the Australian Shareholders\u2019 Association, a retail-investor body, said shareholders were \u201cvery disappointed\u201d with Qantas and needed to hear how the company would get back on track. <\/p>\n<p>That task has fallen to new chief executive Vanessa Hudson, who has been with the airline for almost three decades and replaced Joyce.<\/p>\n<p>In response to aggrieved shareholders, Hudson said the \u201ccustomer is now our number one focus\u201d and detailed various plans to refund customers, improve training for staff and improve the standard of food on its long-haul flights. <\/p>\n<p>The damage done to the Qantas brand was evident at the annual meeting when a third of investors voted against the re-election of Todd Sampson, a former advertising executive.<\/p>\n<p>Sampson said he had considered standing down but felt his experience rebuilding brands should come to the fore now. \u201cOur brand and reputation have suffered considerable damage, damage we will repair,\u201d he told shareholders.<\/p>\n<p>The job for Hudson and a new chair and board will be a rapid restoration of the airline\u2019s reputation. They will at least do so from a position of financial strength \u2014 with Qantas\u2019s balance sheet bolstered by debt reduction and cost-cutting under Joyce \u2014 and in a domestic market where it still commands a market share of more than 60 per cent.<\/p>\n<p>If they fail to turn it around within a year, then they risk further turbulence at next year\u2019s meeting. Australia\u2019s \u201ctwo strikes\u201d law dictates that investors could push to dissolve the board after a second vote against the company\u2019s executive pay proposal.<\/p>\n<p>Mayne said he was hopeful that Qantas could overcome the turmoil, especially now that Joyce and Goyder had moved on. Investors feel they have had enough \u201cred meat\u201d for now, he said. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/be9beb57-05da-4fc9-9c05-e6fe2ac3510a\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. In the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-9442","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Australia falls out of love with Qantas | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.In the past three months,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=9442\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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