New QF Chairman of the Board.

[Global Aviator]

https://australianaviation.com.au/2024/02/ex-telstra-chairman-replaces-goyder-at-qantas/

[Slippery_Pete]

Does anyone know if ASIC be investigating the large sale of shares that occurred last year? Shareholders asked questions about this at the AGM.

[dragon man]

https://cimg5.ibsrv.net/gimg/pprune.org-vbulletin/1566x1754/img_7397_d1d84804b7f3d68fcafc81f6f396bea245d31068.jpeg
I think he is in for one hell of a shock if he ever talks to the staff at the coal face.

[stillcallozhome]

Sounds like a “like for like” swap after reading this unfortunately.

https://amp.smh.com.au/business/companies/telstra-faces-grilling-on-director-appointment-voice-support-at-agm-20231017-p5ecwz.html

[CaptCloudbuster]

Continue to excel

That’s what it’s called these days eh?

[Australopithecus]

A good mate is a senior Telstra exec. He is underwhelmed by this choice and gives me no hope for any meaningful change.

[SOPS]

Sounds like a “like for like” swap after reading this unfortunately.

https://amp.smh.com.au/business/companies/telstra-faces-grilling-on-director-appointment-voice-support-at-agm-20231017-p5ecwz.html
These people seem to fail, and just move to another position. It’s one hell of a gig.

[dejapoo]

They pull this one out of the tennis club in Peppermint Grove, too??

[Bug Smasher Smasher]

From an interview for Intelligent Investor (https://www.intelligentinvestor.com.au/investment-news/meet-john-mullen-from-building-the-abeles-vision-global-freight-asciano-ceo-an/145158):

“Now you had 10 years at TNT/Ansett through until 1994, when you left as Chief Operating Officer. You must have actually been in the thick of it with working for Peter Abeles and I guess, joint ventures with Rupert Murdoch. Did you get to know all those key players back in that journey?

I certainly did. It was an extraordinary education and a fantastic time. I learnt so much about life and business. Peter Abeles was a remarkable man whom I had nothing but the highest regard. I met Rupert Murdoch but he wouldn't remember. Certainly, the time with Sir Peter and those early building days of TNT as it went global was a real adventure. It was a fantastic time.”

[Chronic Snoozer]

These people seem to fail, and just move to another position. It’s one hell of a gig.

You mean “failing upwards”? I guess with his Telstra experience he’s been brought in to improve call waiting times.

[SIUYA]

https://cimg5.ibsrv.net/gimg/pprune.org-vbulletin/1566x1754/img_7397_d1d84804b7f3d68fcafc81f6f396bea245d31068.jpeg
I think Mr Mullen might have had a few too many in the Chairman's Lounge if he really believes that cr@p.

He obviously believes in the Tooth Fairy and the Easter Bunny if he really thinks that the current Qantas sh1tshow represents '...one of the world's very best airlines...'.

FFS. :*

[Talkwrench]

So I put my mate on category E and we took a trip to Japan on QF. He has politely informed me that its ok to take him off and nominate someone else, as after experiencing the QF offering, his preference will be to pay full fare on ANA or JAL going forward.

There's a bit of work to be done and it's gonna take a while.

It's kind of embarrassing that mullen seems to think QF is currently/continuing to excel.

[73to91]

I good mate worked at Patricks when he was the CEO at Asciano, many didn't think much of him there.

[dragon man]

Qantas’ chair must revamp the airline’s tired, profit-hungry strategyAmid falling profits, pilot strikes and an eroded public reputation, Qantas' new chair has a big job on his hands.

MICHAEL SAINSBURY (https://www.crikey.com.au/author/michael-sainsbury/)

FEB 23, 2024

Share
https://ci6.googleusercontent.com/proxy/m8iymkH9w1lE-hmnTok_oFXxuGzD6a4IoeN94z8bmeHTNr0AxCwlRVBJp4AjdN5P4oZC5FZlv ZM-mQFIDdBijAGPr6_ch29Cs4CBVtpT9MQtENcherut6X9Lor8IFPnBIkFou6gj Lf4DlGIf9jbXnz1bF1R6-MT-G44ItbXHzYku=s0-d-e1-ft#https://www.crikey.com.au/wp-content/uploads/2024/02/20240209001899911135-original-copy.jpg?w=740&h=400&crop=1INCOMING QANTAS CHAIR JOHN MULLEN (IMAGE: AAP/LUKAS COCH)Boy, does newly selected (https://www.reuters.com/business/aerospace-defense/qantas-appoints-john-mullen-chairman-elect-2024-02-20/) Qantas chairman John Mullen have a job on his hands when he eventually takes charge in July.

Former CEO Alan Joyce’s strategy (with a complicit board) was to run the joint like a private equity buccaneer: selling off assets, outsourcing, squeezing capital expenditure and slicing, dicing and driving down real wages for its most essential workers.

But such things cannot last, most especially in sectors like airlines, which are both capital intensive and customer focused. Joyce’s successor Vanessa Hudson is now beginning to pick up the pieces, but there was a pile of evidence to show just exactly what a **** sandwich Joyce left behind. At least it won’t have come as a surprise, as she had been his sous-chef and chief bean counter.
Falling profitsThe hard bottom line is that Qantas profits were down 13% on the same period last year at a $1.25 billion half-year pre-tax profit. That was 40% higher than the last half-year trading period before the pandemic, but much-needed investment in new aircraft is finally coming home to roost.

Net capital expenditure is climbing as Qantas must spend $3-3.2 billion this year (https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/2024HY/1H24-Appendix-4D.pdf) and at least double the last pre-COVID year, mainly on new aircraft. At the same time, aircraft deliveries — including A321XLRs and A350s — are running late. And in a world where pretty much every carrier is screaming for planes, this is likely to continue.

While the results were predicted by market analysts, stock market punters fled anyway, collecting their winnings while they could. This sent the company’s share down almost 7% to $5.21, well off its post-COVID high last April of $6.62 and despite yet another buyback of $400 million to go on top of last half-year’s $500 million.

Investors are clearly no longer swallowing this lazy, capital-starving method of boosting the stock price that transfers wealth from customers to shareholders, and they know it is damaging the airline’s balance sheet (increasing the liabilities over assets), leaving Qantas increasingly less protected from any future shocks. Perhaps the board is confident that the federal government will continue to prop up the company in the face of any financial crisis. Having helped steer Telstra (https://www.smh.com.au/business/companies/australians-would-have-faster-cheaper-internet-had-nbn-not-been-built-telstra-chairman-20191015-p530pa.html) through the government-created post-NBN mire, Mullen may not be so certain.

Yet some things stay relentlessly the same and herein lies the problem for Hudson. She is continuing to try and screw the only front-line workers — pilots, maintenance engineers and cabin crew (well most of them) — left after Joyce’s heady COVID-era redundancy and outsourcing spree that saw the company found guilty in the High Court of illegal sackings.
Bargaining dealsEarlier this week, Treasurer Jim Chalmers was having a moment in the sun as the wage price index climbed 4.2% during 2023, the fastest growth since 2018. Yet Qantas is insisting on a two-year wage freeze and a rise of 3% thereafter in an environment where inflation remains over 4%.

Pilots in Western Australia have paused strike action this weekend due to expected extreme weather, but they remain resolute, as underscored by an 80% no-confidence vote in local management this week in a union survey, and with strikes to resume next Wednesday.

Major enterprise bargaining deals with pilots who fly the company’s mainline red-tail aircraft are now in early stages. Outsourced ground staff companies Dnata and Menzies are also pushing for a better deal from Qantas as its own staff costs have soared, insiders told Crikey. Oil prices are also on the rise once more. A promise to spend $230 million on improving customer service and its frequent flyer service was inadequate, especially in the face of continuing pilot and engineer shortages and bare-bones ground staff, insiders said.

Qantas’ 65% or so of Australia’s domestic market is the main reason for Hudson’s upbeat commentary, as there is a far flatter outlook (https://www.fitchratings.com/research/corporate-finance/global-transportation-airlines-outlook-2024-07-12-2023) for the sector globally and it was evident in the poor performance of Qantas’ international business. As has been noted, its European business is largely outsourced to Emirates in a massive codeshare operation. Qantas only flies daily to London and less regularly to Paris and Rome.

Asian carriers are increasing their frequency weekly — Korea’s Asiana is just the latest (https://www.executivetraveller.com/news/asiana-airlines-melbourne-seoul-flights) — providing more competition both to Europe and North Asia, and the well-regarded Turkish Airlines is finally beginning flights. But it is on the Pacific routes Qantas dominated less than a decade ago that its troubles are worse. Pilots said passenger loads were “as bad as I have seen them”, according to one who spoke to Crikey. US carriers, especially United Airlines, have increased flight frequency and are exclusively using more modern aircraft (B787, A350) whose fuel requirements are a third of the Qantas A380s it uses in tandem with B787s on US routes.

Much will depend on Mullen who will succeed Richard Goyder in October after joining the board in July, though why not immediately is testimony to the power of Australia’s tight-knit directors club. Mullen of course is a member, and while he has logistics experience, like Goyder before him, he has none in the unique world of airlines.

The same can be said of the other new director so far unveiled, Nora Scheinkestel, who comes out of financial services and has been on many of the same boards as Mullen, such as Brambles and Telstra. At least their hands are clean of the Joyce era and Hudson’s cosy appointment.

Mullen’s biggest job is to set a new strategy — because the old one, like too many Qantas planes, has reached its use-by date

[unobtanium]

imagine removing all the duplicate's exec managers admin staff IT support safety department's etc etc etc for all the different business unit's all the cost saving's not to mention all the complications of working between departments of the same company, and then there are ceos of everything including ceo of ceo's

[LivingtheDream46]

Out with the old & in with the old! Absolutely NOTHING will change. Just moving the chairs around on the deck of the Titanic.

[SOPS]

I will say this again. It amazes me how, for years, we all on here could see what Joyce was doing to the once great Qantas. But now, it’s only after he has gone…it appears all the high high payed individuals are waking up and saying..”WTF happened?”. I really don’t get it.

[nomess]

I will say this again. It amazes me how, for years, we all on here could see what Joyce was doing to the once great Qantas. But now, it’s only after he has gone…it appears all the high high payed individuals are waking up and saying..”WTF happened?”. I really don’t get it.
Was the same over at Virgin. You basically wait until the place collapses until you do something.

[C441]

I will say this again. It amazes me how, for years, we all on here could see what Joyce was doing to the once great Qantas. But now, it’s only after he has gone…it appears all the high high payed individuals are waking up and saying..”WTF happened?”. I really don’t get it.
He and Dixon shafted the loyal staff for years but it was only when the loyal passengers began to realise Alan was shafting them too did it begin to get traction in the media.

Until then, Alan was genius and the best CEO in the country for his ability to relentlessly drive down costs.

[dragon man]

Best CEO in Australia by a country mile. I wonder if that’s a $275 off your power bill moment for Goyder.

[JamieMaree]

Best CEO in Australia by a country mile. I wonder if that’s a $275 off your power bill moment for Goyder.

Dragon,
please list the attributes you have that makes you a good judge of a good CEO.
Getting your info from Crikey and Joe Aston doesn’t need to be listed.

[CaptCloudbuster]

You keep squeezing (https://www.afr.com/politics/federal/goyder-is-spread-too-thin-afr-readers-want-qantas-chairman-gone-20230917-p5e5b3) on to that 20% JM :rolleyes:Almost 80 per cent of readers surveyed by The Australian Financial Review believe that Qantas chairman Richard Goyder should resign and that former chief executive Alan Joyce should be stripped of his bonuses following a string of controversies involving the airline.

[JamieMaree]

You keep squeezing (https://www.afr.com/politics/federal/goyder-is-spread-too-thin-afr-readers-want-qantas-chairman-gone-20230917-p5e5b3) on to that 20% JM :rolleyes:

So!
What makes AFR readers experts?
I accept that they are dissidents.

BTW I am not an AFR reader in recent times and I don’t pretend to be an expert on CEOs. I prefer to let the shareholders decide.

I’d suggest that a lot of the keyboard warriors on here are not shareholders. Just the disgruntled. Maybe even employees.

[dragon man]

Dragon,
please list the attributes you have that makes you a good judge of a good CEO.
Getting your info from Crikey and Joe Aston doesn’t need to be listed.


Quite simply if you don’t like what’s on here don’t read or participate. You seem to be the only one who constantly complains , people can make their own minds up.

[JamieMaree]

Quite simply if you don’t like what’s on here don’t read or participate. You seem to be the only one who constantly complains , people can make their own minds up.​​​​​​

I’m not complaining. I am putting my 2 bobs worth on the credibility of your arguments.

[dragon man]

Qantas hits turbulence with "accounting and strategic trickery" and an ageing fleet
The national carrier has been in the spotlight for all the wrong reasons, and Roger Montgomery doesn't see things improving any time soon
19 HOURS AGO
PRINT WIRE (https://www.livewiremarkets.com/wires/qantas-hits-turbulence-with-accounting-and-strategic-trickery-and-an-ageing-fleet#)
https://assets.livewiremarkets.com/rails/active_storage/representations/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNXA5Q0E9PSIsImV4cCI6bnVs bCwicHVyIjoiYmxvYl9pZCJ9fQ==--83f9380a27167b1ae01f33ce751af844ae5cb84d/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCem9MWm05eWJXRjBTU0lJY0c1 bkJqb0dSVlE2RTNKbGMybDZaVjkwYjE5bWFXeHNXd2RwQWNocEFjZz0iLCJl eHAiOm51bGwsInB1ciI6InZhcmlhdGlvbiJ9fQ==--c306068f01ab83c3650795f1865f4e6da1f93433/CC1.png (https://www.livewiremarkets.com/contributors/chris-conway-4adcdb2d-4420-4352-a849-19d20ded0144)
Chris Conway (https://www.livewiremarkets.com/contributors/chris-conway-4adcdb2d-4420-4352-a849-19d20ded0144)Livewire Markets



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CONTACTThe last six months have been tumultuous for Qantas Airways (ASX: QAN (https://www.livewiremarkets.com/stock_codes/asx-qan)). Former CEO Alan Joyce departed amid controversy around Qatar being denied an opportunity to fly routes in Australia and the alleged sale of tickets on flights that were already cancelled.

Trust in the national carrier has plummeted, something acknowledged by new CEO Vanessa Hudson, who is aware that rebuilding that trust will be crucial to Qantas' fortunes moving forward.

So, how are they doing so far?


https://assets.livewiremarkets.com/rails/active_storage/representations/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNXA5Q0E9PSIsImV4cCI6bnVs bCwicHVyIjoiYmxvYl9pZCJ9fQ==--83f9380a27167b1ae01f33ce751af844ae5cb84d/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCem9MWm05eWJXRjBTU0lJY0c1 bkJqb0dSVlE2RTNKbGMybDZaVjkwYjE5bWFXeHNXd2RwTjJrMyIsImV4cCI6 bnVsbCwicHVyIjoidmFyaWF0aW9uIn19--645eec5de15df687a8b5a37637bced8c8b42e5ce/CC1.png
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Based purely on the latest numbers, which beat consensus expectations, one might be forgiven for thinking Qantas is faring 'OK'. But the share price reaction post the results yesterday tell a different story, as does Roger Montgomery (https://www.livewiremarkets.com/contributors/roger-montgomery), from Montgomery Investment Management, who is unequivocal in his thoughts on the company;
"After years of accounting and strategic trickery, the true cost of running the airline is only just beginning to be revealed".In the following, Montgomery doesn't hold back, laying out the case for why he wouldn't want to own the stock and why he and his team don't see it as "quality".

As an added bonus, he names a handful of stocks he believes do fall into the Quality bucket and outlines his bullish thesis for markets out to 2026.

Key first-half results


H1 underlying PBT $1.25 billion vs expectations of $1.17 billion
NPAT $869 million vs $852 million
Revenue $11.13 billion vs $10.89 billion
EBITDA $2.20 billion vs $2.22 billion

Outlook:

H2 travel demand remains strong across the portfolio
Unit revenue is expected to remain stable for domestic and continue to normalise for international as market capacity return
Group RASK to continue to moderate vs 2H23 as international capacity returns to pre-COVID levels

For more information and market data on Qantas, head to Market Index (https://www.marketindex.com.au/asx/qan).

Note: This interview took place on Friday, 23 February 2024.
https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBMVJWQ2c9PSIsImV4cCI6bnVs bCwicHVyIjoiYmxvYl9pZCJ9fQ==--de0f3ba5fbfc3a8ad493a3f1565d626144a0b94b/ReportingSeason_Feb24_Qantas_Primary.jpg Roger Montgomery (https://www.livewiremarkets.com/contributors/roger-montgomery), Montgomery Investment Management1. In one sentence, what was the key takeaway from this result?After years of accounting and strategic trickery, the true cost of running the airline is only just beginning to be revealed.

2. Were there any major surprises in this result that you think investors should be aware of?
This isn't a high quality business. Investors should focus on quality, just as we do in the funds that we manage and distribute. For example, in the Montgomery Small Companies Fund, businesses like Megaport, Macquarie Technology is high quality. In The Montgomery Fund, we've got Macquarie Group, Cochlear, and CSL. And then over at Polen Capital, the managers of our Global Small Cap Fund, are businesses like Topicus and Fevertree. And in large caps, they have Amazon, Alphabet, and Adobe.

When I look across all of our managers, who all put quality first, none of them own Qantas.
Most importantly, Qantas will be a very, very different business over the next 10 years compared to the last 15 years. And here's a really important insight: over the last 15 years to 2023, presided over, remember, by a single CEO, and using statutory after-tax profits as they were contemporaneously reported by the airline, total net profits over that 15 years amounted to a loss of $116 million.
In other words, no money was made on a net basis over the last 15 years. And here's the interesting thing: the business spent $2.2 billion buying back shares and it spent another $1.7 billion on dividends. So the question is, if it made a loss, how did it fund almost $4 billion in dividends and buybacks?

Well, the answer to that is partly with borrowings, which rose by just over $1 billion in those 15 years. And then that leaves a shortfall of about $2.8 billion, which happens to match the $2.7 billion the government handed Qantas in COVID support.



So remember, those economics... and this is the other thing: those economics aren't allowing for the airline's fleet of aircraft to age. In other words, if the airline had purchased aircraft such that its fleet hadn't aged, the numbers would've been a lot worse.
3. Would you buy, hold, or sell this stock on the back of this result?Rating: SELL

I wouldn't want to own the stock over the next period, when the fleet needs to be largely upgraded. And that's really important.
4. What’s your outlook on this stock and the sector over the year ahead? Are there any risks investors should be aware of?The average age of a plane in Qantas's fleet is 15 years, which is the highest of any major international airline in Australia. So, if you look at Cathay, Emirates, and Qatar, the average age of a plane is 10 years. And Qantas's average age back in 2006 was eight years, and just before the pandemic, it was 11. So the profits that it's reported recently have been - one way of saying it is - artificially boosted by the fact that they haven't been keeping their fleet up to date.

[Chronic Snoozer]

What would be revealing is whether Montgomery owned the stock over the preceding 15 years and whether his fund made any money off the back of the share price resurrection from less than $1 a few years back. In other words, is this an epiphany or years of consistent assessment of Joyce's tenure?

[neville_nobody]

What would be revealing is whether Montgomery owned the stock over the preceding 15 years and whether his fund made any money off the back of the share price resurrection from less than $1 a few years back. In other words, is this an epiphany or years of consistent assessment of Joyce's tenure?

He was rubbishing QF 15 years ago with the same rhetoric. Not sure if he changed his mind in the intervening years, at a guess I'd suggest not. It appears he sees through the Joyce spin.

In defence of the airlines though the rest of the world has better tax depreciation scheduling than Australia which is why QF have traditionally had old fleets.

[dragon man]

None of the other research I have read has been as critical. Is that because they are from major finance institutions with CC membership I will never know.

[Lead Balloon]

An oldie but a goodie…

An airline was interviewing candidates for one of its senior executive positions. The interview comprised just one question: "What is two plus two?"

Various candidates gave various answers but the successful candidate, on being asked the question, got up from his chair, went over to the meeting room door, closed it, came back and sat down. He then leant across the table and said in a low voice, "How much do you want it to be?"

[MickG0105]

He was rubbishing QF 15 years ago with the same rhetoric. Not sure if he changed his mind in the intervening years, at a guess I'd suggest not. It appears he sees through the Joyce spin.

In defence of the airlines though the rest of the world has better tax depreciation scheduling than Australia which is why QF have traditionally had old fleets.
It would certainly be interesting to know if his Long Short Fund has shorted QAN; you might expect so.

[B772]

Another ex Ansett person at QF.

[SOPS]

So!
What makes AFR readers experts?
I accept that they are dissidents.

BTW I am not an AFR reader in recent times and I don’t pretend to be an expert on CEOs. I prefer to let the shareholders decide.

I’d suggest that a lot of the keyboard warriors on here are not shareholders. Just the disgruntled. Maybe even employees.

I would suggest employees have a big right to complain. It sounds like, in your world, they should work for nothing, to keep the shareholders happy.

[framer]

I’d suggest that a lot of the keyboard warriors on here are not shareholders. Just the disgruntled. Maybe even employees.
Surely not. The cheek of it!

[dragon man]

Welcome new chairman.

https://michaelwest.com.au/qantas-whats-the-scam/

[Traffic_Is_Er_Was]

But they are not increasing the fare, then discounting it. That's illegal. They are offering another intangible product as the "reward" for purchasing a ticket during the promo period. It would be up to the customer to decide if the cost outweighed the benefits.
I guess the issue the customer has is if they choose not to take up the offer, they still pay the new price. Again, their choice.

[Parrot Pilot]

I just watched the latest episode of John Oliver’s show. It’s all about Boeing and its corporate culture…

The similarities between the strategy at Boeing and Qantas are striking….

https://m.youtube.com/watch?v=q8jP70NDNRY&pp=ygUSSm9obiBvbGl2ZXIgYm9laW5n