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Qantas view of blue skies ahead counters gloom at AGM

October 27, 2014 Corporate, Headline News 1 Comment Email Email

egtmedia59Only 130 people attended the Qantas annual general meeting in Melbourne on Friday. The feeling that a turnaround could be on the way for the battling airline helped defuse shareholder anger over recent poor results, but plenty of those present were less than happy.

Qantas traffic filings for the month, and for the year to September, were released not long before the meeting. They show a general improvement in yields and load factors.

A sample: “Qantas Group passenger numbers for the financial year to date [to the end of September 2014] increased by 3% from the previous year. Group capacity increased by 1.1% and demand increased by 2.9%, resulting in a revenue seat factor of 80.1% which was 1.4 percentage points higher than the previous year.”

Qantas chief executive Alan Joyce referred to the airline’s record AUD 2.8 billion loss in 2013-14, but said Qantas was now on track to record a profit for the first half of 2014-15.

He told the AGM that customer satisfaction was at a record high.

Long-time critic of Qantas management and its board, Independent Senator for Souyj Australia, Nick Xenophon, was at the Qantas AGM. He recently bought 360 Qantas shares (worth AUD 500) to gain the right to question Joyce and the board over the record loss.

“The time for spin is over. This board needs to be held accountable for a series of disastrous decisions that have cost shareholders dearly, demoralised loyal staff and have tarnished the reputation of a great Australian icon”, Xenophon said beforehand.

Xenophon has criticised Qantas decisions to pour hundreds of millions of dollars into the Jetstar Asia franchises “to the detriment of the Qantas Group as a whole”.

He has also slammed the Qantas board over its confidential briefings to institutional investors.

“There can’t be two classes of shareholders,” Xenophon said. “Why should Aussie mum and dad investors be kept in the dark while the big end of town has privileged access to these briefings?”

Some speakers were angry at Qantas moves to shift jobs offshore. Qantas workers grilled management over the airline’s poor recent financial record and continuing job losses.

“Despite making promises that after the closure of the Melbourne and Brisbane call centres and the loss of over 500 jobs, [that] no call centre jobs would be offshored, Qantas has reneged on that promise by announcing in September that 50 jobs that were destined for Hobart were now going to New Zealand,” Australian Services Union National Secretary, Linda White, said before the meeting.

The Australian Services Union is the largest union in Qantas and the airline industry in Australia with members working in call centres, check in, clerical and administrative areas, IT, operations, load control, sales, freight and engineering and maintenance. It has seen almost 2000 Qantas staff in its ranks lose jobs since February 2014.

“The only staff that aren’t working productively are those at the top, like chief executive Alan Joyce, who failed to meet more than 60% of his targets in the last financial year,” Transport Workers Union National Secretary Tony Sheldon commented.

The market, however, liked the AGM – and particularly the upbeat Qantas forecasts.

Qantas shares lifted more than 3.5% on the day to close at AUD 1.42.

Written by Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    How does a company lose nearly three billion dollars in the 13-14 Fin year but be on track for a profit in the following six months? How do you make a turnaround like that with no noticable changes to the company? IMO the company still has the wrong planes, the wrong scheduling and the wrong management. They have fastracked the withdrawal of their ancient 767s but with really nothing due to replace them as, of course, everything new on order is going to Jetstar.

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