In case you missed it, this was in paper yesterday, a public holiday. - (
my bold)
QANTAS chief executive Alan Joyce says investors can still make returns out of aviation and defended the company not paying dividends for the past few years.
"Qantas hasn't been paying dividends because of the global environment we've been in and with regards to the importance that we maintain our investment-grade credit rating.," he said.
Speaking at an Australia-Israel Chamber of Commerce lunch in Sydney yesterday, Mr Joyce said the airline remained focused on turning its international business around.
The value created by its low-cost arm, Jetstar, was as great as the successful Irish carrier Ryanair and Britain's easyJet, Mr Joyce said. "Jetstar today, after seven years, is bigger than Ryanair was after seven years," he said.
Singapore-based Jetstar Asia, in which Qantas invested $80 million, was another example of shareholder value being created, he said.
"Based on Tiger being listed on the Singapore Stock Exchange, Jetstar Asia is worth $250m to $300m. That's not a bad return for shareholders in the space of a few years."
Mr Joyce reiterated calls for changes to be made to the Fair Work Australia Act, namely the removal of the prohibitive content clauses. "Before this act came in, there were a whole series of items that you didn't have to talk to the unions about which were general strategy about the company and our ability to have flexibility and to adapt," Mr Joyce said.
Under current laws, Qantas has had to negotiate a series of items around the strategic direction of the company, including restrictions on the airline building infrastructure for future projects.
"One of the proposals was to build a 787 or A380 hangar for aircraft that do not need maintenance until 2025," Mr Joyce said.
The success of Jetstar, Qantas domestic and the frequent-flyer business meant the company's focus remained on the turnaround of its international business after a $200m loss last year.
Mr Joyce compared the international business to the car and steel industries, saying it was a trade-exposed operation with its cost base mainly in Australian dollars, and that had hurt efficiency. "We're implementing a huge change to our core operations, change in the way we do maintenance, change in the way we do catering and change in the aircraft," he said.
Asked if Qantas was making Jetstar international larger at the expense of its international arm, Mr Joyce said millions were being invested in new aircraft and new services to keep customer service at the highest levels.
"We have a capital discipline approach and we will allocate capital to the businesses that are making the return," he said. "But I have a fundamental belief that we can grow Qantas and we can grow Jetstar because I think there is a role for a premium airline and (one) for a low-cost airline."
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