Qantas has fallen out of favour with unions, customers and shareholders who have thrown out a pay package proposal for the beleaguered airline’s bosses.
More than four-fifths of the votes went against the company’s remuneration report, a tally shown at the meeting on Friday (November 3) shows.
Chairman Richard Goyder told the meeting in Melbourne: “This is obviously a very clear message from shareholders.”
The company’s new board faces a huge task in turning its fortunes around after a slew of disappointing headlines in recent months, with 1,700 workers sacked, accusations of “ghost flights” and a plummeting share price.
Former Qantas executive, Andrew Charlton, managing director of consultancy Aviation Advocacy, said Australians used to be proud of the carrier, known affectionately as the “flying kangaroo”.
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He told the Financial Times: “If you take that loyalty for granted . . . that starts to chip away. The seemingly ceaseless scandals and service lapses mean that now, Qantas has even lost Australia.”
Former CEO Alan Joyce stepped down early two months ago, despite leaving Qantas in a good position after the Covid pandemic.
He won praise from Mr Goyder for steering the company through what he said was “the most challenging and tumultuous period in the airline’s history”.
Qantas reported a £1.3billion (Aus$2.5bn) underlying pre-tax profit for the year ending in June and announced a A$500mn share buyback.
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But cost-cutting measures led to lost bags and cancelled flights, upsetting the airline’s customers.
A consumer regulator accused Qantas of selling thousands of tickets for flights which had already been cancelled and sued the carrier in August.
The FT reports that shareholders criticised the airline’s so-called “ghost flights” defence after the company argued it does not sell a ticket when the customer books a flight but a “bundle of rights”.
A court ruled in September that Qantas illegally sacked 1,700 workers in the pandemic, leading to a huge compensation bill.
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Qantas shareholder and activist investor, Stephen Mayne, said shareholders had been the bedrock of support during Mr Joyce’s tenure, but the company had now lost them too.
He said: “Shareholders were the last to fold, but collectively they are now quite feral and seeking restitution.”
Rachel Waterhouse, Chief Executive of the Australian Shareholders’ Association, said shareholders were very disappointed with Qantas.
New chief executive Vanessa Hudson said customers are the airline’s number one focus now, outlining plans to improve training, refund customers and improve food on long-haul flights.
If Qantas bosses fail to turn the company’s reputation around, even though it is in a strong financial position, then they risk more turbulence in 2024.
Under Australian law investors can push to dissolve a board if a second vote on a company’s executive pay proposal goes against it.
Qantas has been approached for comment.
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