In an era where trust is paramount, Qantas Group, under the watchful eyes of Chairman Richard Goyder, has released its annual report for the financial year 2023 (FY23), highlighting the airline’s achievements and key areas for improvement.
Financial and Non-Financial Highlights
The annual report sheds light on the financial and non-financial performance of the airline group, which shows a favorable trend in many areas. The company has seen an impressive doubling in the number of passengers, with 46 million individuals choosing Qantas for their air travel needs. Moreover, the company surpassed its net emissions reduction goal by 3%, making significant strides in its environmental commitments.
In terms of punctuality, Qantas has outperformed its primary domestic rival for 11 of the past 12 months. This commitment to time management further enhances the brand’s reputation in the aviation industry.
Rebuilding Trust Amid Challenges
However, it’s not all sunny skies for Qantas. The airline acknowledges the community’s diminished trust and growing customer dissatisfaction. A significant part of this loss of trust revolves around recent allegations from the Australian Competition and Consumer Commission (ACCC). Despite the ACCC taking Qantas to court, the airline argues it has always held a clear stance on cancellations: offering customers an alternative flight or a refund. Qantas faced another setback with the High Court ruling against it on the airline’s decision to outsource ground handling.
Qantas FY23: Executive Remuneration in Focus
An integral part of the report is the disclosure of Executive Remuneration for Qantas FY23. While operational safety was commendable, with customer satisfaction seeing an uptick, it still falls short of the desired standard. Consequently, senior executive pay was impacted. The Board decided on a 20% reduction in short-term incentives for senior executives for FY23, considering the cumulative impact on the brand and customers.
Given the ACCC’s allegations, the Board has opted to withhold the balance of the FY23 short-term incentive for senior executives while this matter progresses. Significant amounts, such as the $2.2 million short-term bonus for CEO Alan Joyce, have been withheld. Additionally, $8.3 million from Joyce’s $21.4 million total remuneration is under review for possible clawback, should the Board find it essential.
To align executive incentives with customer outcomes, the Board has increased the emphasis on customer results for remuneration in FY24 and has introduced it as a metric for future long-term incentives.
The Path Ahead
Chairman Goyder emphasized the company’s commitment to regaining its stature as one of the most trusted brands.
“While there is much work to do right across the Group, we can’t lose sight of the many positives. This includes the fact we are tackling the current challenges with strong financial foundations, in stark contrast to the past few years, giving us the ability to invest in customers, new aircraft, and more people.
“We’re determined to bring Qantas back to its position as one of the most trusted brands. That can only happen by consistently delivering to the standards people rightly expect, and the Board is working closely with Vanessa Hudson and her new management team to ensure that happens.”
The journey ahead for Qantas is about more than just profits; it’s about rebuilding trust and staying true to the brand’s legacy.