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Qantas Airways Faces Shareholder Criticism in Torrid Annual Meeting

The management of Qantas Airways had a difficult time at their annual meeting as shareholders expressed their discontent with a string of scandals and poor customer service that have damaged the airline’s reputation. Chairman Richard Goyder announced that the airline’s pay report was overwhelmingly rejected by shareholders, with 83% of proxy votes voting against it.

Goyder acknowledged the significant loss of trust in the national carrier and stated that the vote reflected broader frustration with past events. He assured shareholders that their concerns were heard and that efforts would be made to restore confidence in the company.

While the vote against the pay report is non-binding, it serves as a symbolic show of disapproval by shareholders. Under the “two-strikes rule,” if shareholders vote against the report again next year, a vote will be called to determine if all board members should stand for re-election.

In addition to the pay report, shareholders also protested against the re-election of marketing executive and TV celebrity Todd Sampson to the board, with 34% of proxy votes voting against him.

During the meeting, shareholders raised concerns about various issues, including the retention of Covid flight credits, the loss of expired frequent flyer points, the suspension of dividend payments, and steps being taken to improve customer service. Goyder faced scrutiny when questioned about former CEO Alan Joyce’s sale of shares earlier this year, which led to some members of the audience expressing their disapproval.

Goyder declined to answer a question regarding the airline allegedly granting Prime Minister Anthony Albanese’s son membership to its exclusive Chairman’s Lounge. He stated that he would not discuss matters regarding membership of the invitation-only club.

Richard Goyder, who has chaired Qantas for five years, has already indicated that he will step down before next year’s annual general meeting as part of a boardroom overhaul to repair the airline’s public standing. Other directors, Jacqueline Hey and Maxine Brenner, will retire in February, and Michael L’Estrange’s term has ended today.

The Transport Workers Union, which has clashed with Qantas in the past, issued a statement criticizing Goyder’s performance at the meeting. The union believes that genuine board renewal is necessary to regain trust in the airline.

New CEO Vanessa Hudson emphasized that the airline has taken into account the complaints of shareholders, customers, and workers. She apologized to the shareholders for the disappointment and frustration expressed.

Qantas recently faced a lawsuit from Australia’s competition regulator, seeking a record fine of over A$250 million ($161 million) for allegedly selling seats on thousands of cancelled flights last year. The airline dismissed the allegations, stating that customers were re-booked on other flights or refunded, and therefore, it did not obtain a “fee for no service.”

The lawsuit also resulted in an early departure for CEO Alan Joyce, who was originally set to step down after the annual meeting. Joyce had faced public backlash for the airline’s reliability issues as travel resumed after pandemic-era restrictions.

In addition to the lawsuit, Qantas has been criticized for retaining over A$500 million of Covid flight credits and posting a record profit due to significant fare increases during a cost-of-living crisis. The company also faced scrutiny for its involvement in the government’s decision to restrict Qatar Airways flights into Australia.

The challenging annual meeting highlights the need for Qantas to address and rectify the issues that have tarnished its reputation. The airline’s management and new leadership under Vanessa Hudson must take concrete steps to regain the trust and confidence of shareholders, customers, and the public.