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Colossal Qantas loss: Senator reveals complaint to ASIC

August 29, 2014 Aviation, Headline News 2 Comments Email Email

egtmedia59Independent Senator for South Australia, Nick Xenophon, has revealed that he made a formal request to the Australian Securities and Investments Commission (ASIC) early last month for an investigation into Qantas, and met with ASIC Chair Greg Medcraft and senior officers.

Xenophon’s request for an investigation is attached, complete with details, and can be downloaded as a PDF file. Xenophon wrote again to ASIC yesterday (Thursday) following Qantas’ record AUD 2.84 billion loss. eGlobal Media-ÃÇÁ

Broadly, Xenophon has asked ASIC to investigate whether Qantas has breached its continuous disclosure requirements, under which companies must share information relevant to share prices with the Australian Stock Exchange (ASX), so that all shareholders have equal access to the information.

“Qantas has admitted to me via a Senate inquiry process that it has had commercial in confidence briefings with institutional investors,” Xenophon said.

“My question to ASIC is whether this breaches Qantas’ obligations in terms of continuous disclosure to the share market.”

“Institutional investors have stood by silently while Qantas, under Joyce’s leadership, has lurched from crisis to crisis,” Xenophon said. “You would expect them to be baying for blood, but they haven’t made a squeak.”

“It makes me wonder what information institutional investors may have received in these meetings,” Nick said. “Are they privy to information that smaller, ‘mum and dad’ shareholders aren’t?”

Xenophon also contrasted yesterday’s Air New Zealand results with those of Qantas. The New Zealand carrier brought home a bumper annual result, declaring on Wednesday this week a statutory profit after tax of NZD 262 million, up 44%.

“Unlike Qantas management, Air New Zealand’s management doesn’t appear to be at war with their employees,” Xenophon said pointedly.

Xenophon also highlighted that Joyce’s pay packet of AUD 5.1 million in 2012/13 was about equal to the combined pay of the chief executives of Singapore Airlines, Cathay Pacific and Air New Zealand, all of which are in much better shape than Qantas.

In marked cnmtrast, Air New Zealand top executives famously took a 20% pay cut a few years back, to make a pay freeze for lower-level employees more palatable in the heavily unionised New Zealand airline. Middle management took a 10% pay cut.

The strategy worked, and within two years the Kiwi airline was able to pay a bonus to its entire staff.

Xenophon was also scathing of Joyce touting yesterday’s results as “clear evidence of a brighter future”. Xenophon called the results “disastrous “.

Xenophon is not convinced that the future will be brighter for Qantas under current management.

“Just look at Mr Joyce’s comments over the years; he’s been promising a turnaround since 2010,” Xenophon said. “His credibility is in tatters. In fact, I’m convinced he must be wearing asbestos pants.”

MEDCRAFT, Greg (Qantas), 8 July 2014. SKM

Edited by : Peter Needham

Currently there are "2 comments" on this Article:

  1. AgentGerko says:

    Qantas has not had a good boss since James Strong. Mr Joyce couldn’t run a sausage sizzle without burning the snags. The alliance with Emirates has been a disaster that just sees EK’s market share going up and QF’s share going down. Why stick with QF and its one route into Europe when you can fly EK into dozens of ports across the continent. They bought the wrong aircraft, missing the 777, and are now stuck with a bunch of A380’s that they haven’t enough routes for and can’t fill them anyway. The routes they have are timed poorly and don’t meet the needs of the business community. And all the new planes go to Jetstar whilst QF lumbers on with a bunch of old 767’s and 747’s. Mr Joyce and most of the board just have to go.

  2. Rod says:

    I’m an Air NZ (AIZ) shareholder 😀

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