Alan Joyce questioned about $17m personal decision amid Qantas FY23 results
Qantas CEO Alan Joyce appeared surprised by a question about a recent personal decision as he announced the airline’s huge yearly profit.
Qantas CEO Alan Joyce was excited to announce an underlying profit before tax of $2.47 billion for the financial year on Thursday and described the company’s financial position as the “strongest it’s ever been”.
The Qantas Group posted a statutory profit after tax of $1.74 billion – the first full-year statutory profit since 2019.
Mr Joyce, who will retire as CEO in November after extending his time to see the business through the pandemic, said the company’s future “has never look better”.
But when it was time for questions at Qantas’ media briefing, Mr Joyce was first hit with a question about his personal investment in the company and it appeared it wasn’t what he was expecting.
The outgoing CEO was asked why he sold the majority of his shares in the airline two months ago if Qantas was in such a good financial position.
“Ah, well, I still have a huge amount of shares there I hold but I had to sell shares for a personal purchase I was making,” he said.
“It was the timing to do it given the market update, all information was disclosed. But I’m still a very large shareholder in Qantas and I more than meet the minimum level that the CEO is expected to hold by quite a multiple amount.”
On June 1, Mr Joyce sold 2.5 million Qantas shares worth $16.9 million.
The sale came just days after he purchased a penthouse in The Rocks overlooking the Sydney Opera House for $9 million.
He accumulated the share stake since 2012 after becoming chief executive. And at that time they were trading at about $1.50.
Following the sale through ANZ for $6.74 on June 1, he will be left with 229,000 — worth around $1.45 million, according to market prices at the time.
While the shares were sold on the market, it’s unusual for a CEO to liquidate nearly their entire holdings when they’re still in the role, the Herald Sun reported in June.
Usually they sell down their stake after they have left the company — which for Mr Joyce is in November this year when Vanessa Hudson takes over.
The chief financial officer will become the first woman to lead the company.
Ms Hudson has worked in a number of executive positions across the company over 28 years, including chief customer officer and senior vice president for Qantas across the Americas and New Zealand.
Speaking to media at the press conference on Thursday, Ms Hudson said she was “excited” about the future and said Qantas’ FY23 full-year results were “not as good as it gets” as the future earnings potential of the business was expected to continue to grow.
Mr Joyce will face more tough questions next Monday after the Australian Senate summonsed him to appear before an inquiry into the cost-of-living crisis.
It is understood he will be grilled on high airfares, his personal bonuses, the airline’s Covid travel credit scheme and outsourcing of ground handling staff.
Earlier this week, class action law firm Echo Law announced it had lodged proceedings against Qantas in the federal court on behalf of “hundreds of thousands” of Qantas customers whose flights were cancelled during the Covid pandemic due to travel restrictions.
Echo Law partner Andrew Paull alleged Qantas failed to immediately issue refunds to customers and instead pushed out travel credits.
He said the airline needed to be “held accountable and refund that money with interest”.
But Qantas said it “completely” rejected Echo Law’s claims.
On Thursday, Mr Joyce and Ms Hudson were asked how much of Qantas’ profit was because of unredeemed flight credits, which expire at the end of this year.
“We actually haven’t taken any material profit in unredeemed Covid credits at all,” Ms Hudson said.
Mr Joyce added: “We really are keen for people to use the credits.”
“My message to everyone out there is that if you have a credit, call a call centre,” he said, adding there was a dedicated team to deal with this.
“Ring that, get the credit, either use it for a booking … or ask for your money back and we’re very happy to do that.”
He said there were still $370 million worth of unclaimed credits in Australia and 80 per cent can get refunds.
Qantas’ Travel Credits Concierge Team can be contacted on 1300 171 505.
Qantas’ FY23 results
The Qantas Group posted an underlying profit before tax of $2.47 billion for the financial year.
The airline said it was expecting $2.45 to $2.47 billion for the 2023 financial year and it appears it was right on the mark.
It had a statutory profit after tax of $1.74 billion. Its net debt also declined to $2.89 billion.
Qantas said its return to profit comes after three years and $7 billion of cumulative statutory losses.
The company said underpinning the profit was completion of its $1 billion recovery program (launched in the first year of those losses), a 132 per cent increase in flying compared with FY22 and strong travel demand driving significantly higher revenue.
New aircraft on order
Qantas also announced on Thursday a firm order for 24 widebody aircraft, including 12 Boeing 787s and 12 Airbus A350s, which are expected from 2027.
The intention is for the new aircraft to replace the bulk of the Qantas Group’s current A330 fleet.
It is in addition to Qantas’ order of 12 specially modified A350s to operate Project Sunrise flights, which will arrive from late 2025.
Project Sunrise is about launching ultra long-haul flying with non-stop flights from the east coast of Australia to Europe and New York.
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