Qantas mea culpa fails to fly with investors

Save articles for later

Add articles to your saved list and come back to them any time.

The Chairman’s Lounge may have protected Qantas chairman Richard Goyder from the airline’s post-COVID customer service chaos, but there was no hiding from the investor fury at his last annual meeting for the airline on Friday.

“It’s clear there has been a substantial loss of trust in the national carrier. And we understand why,” he assured shareholders.

But all the apologies in the world were not going to protect Goyder and his board from the invidious position they created for themselves.

Ad guru Todd Sampson scraped through with his re-election to the Qantas board despite a strong protest vote. Credit: Eamon Gallagher

Even at the meeting, Goyder could not hide his admiration for the chief executive under whose watch this mess unfolded: Alan Joyce.

“He guided this company through some of the biggest challenges, which meant making some tough decisions,” Goyder said in his opening speech.

But as one investor pointed out, this raises an obvious question. Given the laudatory comments for Joyce, and his now-departed loyalty boss Olivia Wirth, how are shareholders and employees meant to be reassured that there is a real intent to reset customer and employee relationships as promised?

All the apologies in the world were not going to protect Goyder and his board from the invidious position they created for themselves.

And how could investors pass a remuneration report detailing the multimillion-dollar payouts to a CEO who had presided over the airline illegally sacking baggage handlers and trashing its brand?

Goyder has not helped by staying on when the full scale of the airline’s woes became apparent.

A new chairman and CEO would have been able to sell a more credible story of its intent to win back the trust of customers – and regulators. Just ask Crown Resorts.

The remuneration report was always going to be a target for investors, who vented their frustration in spectacular style with 83 per cent of proxies directed to vote against it – delivering one of the largest first strikes seen in corporate Australia.

But they might not have delivered such a brutal riposte to the chairman’s pleas for board stability.

Goyder has already orchestrated significant boardroom renewal ahead of his own exit next year, with three directors standing down between now and February. He can’t afford to lose more among a board of nine non-executive directors – two of whom are already new.

But it almost became four departures on Friday with about 34 per cent of proxies directed against the re-election of ad guru Todd Sampson to the board.

As another astute investor pointed out: what good is a brand expert who spectacularly missed the disaster unfolding at Qantas over recent years?

Sampson himself admitted to prevaricating on whether to seek reappointment.

“Of all the times in Qantas history, especially with a new CEO, this is when my experience will be most valuable,” he told everyone.

At least shareholders were targeted with their anger.

Former Qantas chief Alan Joyce. Credit: Eamon Gallagher

Newly appointed directors Doug Parker and Dr Heather Smith sailed through their election to the board, along with corporate veteran Belinda Hutchinson.

It is almost unfathomable to think that barely 10 weeks ago, Qantas was flying high with a record $2.46 billion underlying profit and the promise this would be the start of a golden run for investors who had watched the share price soar over the previous year.

It took just weeks for this shareholder triumph – at the expense of customers – to start souring, when the Australian Competition and Consumer Commission (ACCC) took legal action over so-called “ghost flights” where Qantas had sold tickets on flights that had been cancelled.

This may continue to cloud the airline’s future despite hopes for a settlement with the ACCC after Qantas lodged its defence this week.

When asked on Thursday if the regulator planned to settle the case, ACCC chair Gina Cass-Gottlieb indicated they were prepared for a legal battle.

“We took it in a defined and strong way, and we will continue to proceed in that manner,” she told reporters at a Melbourne conference.

It is the last thing Qantas needs.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Most Viewed in Business

From our partners

Source: Read Full Article