Nothing beats a bit of community spirit.
Let's bring this one home, boys.
Yeah!
At Qantas, we see it all over Australia. Together, we're people that like helping people.
Stunning conversation. It's a great first step.
Sometimes, not even people.
Good boy.
Wherever you find Aussies, you find community spirit. From our iconic beaches to our treasured reef. At Qantas, we look up to the communities around Australia, and we're proud to be their partners.
This is for you.
Some of them we've just met. Others...
Thank you.
We've been friends for years. Being partners means more than just flying together. It means being there when we're needed, protecting the land we love. Sometimes, it means celebrating how far we've come. To us, community spirit is the spirit of Australia.
In the unlikely event of an emergency, please remain calm and listen to the instruction over the loudspeaker. The closest emergency exit is located at the back of the room. Once outside the ballroom, turn right and exit via the stairs that will lead you to the fire exits. If it is not safe to exit this way, our team will be able to guide you.
Great. I think we're ready to go. Good morning. I am your Board Chair, John Mullen, and welcome to the 2025 Qantas Annual General Meeting. The AGM is a very important event for Qantas and its shareholders, and on behalf of the Board, I'd like to thank all of you for participating, whether you're here in person or joining us online. Before we start, let me introduce your directors. From your left, which is a bit of a way for me, Dr. Heather Smith, Dion Weisler, Dr. Nora Scheinkestel, Chair of the People and Remuneration Committee, General Counsel and Company Secretary Kate Tully, Chief Executive Officer Vanessa Hudson, Doug Parker, Belinda Hutchinson, Chair of the Audit Committee, and Tony Tyler, Chair of our Safety, Health, Environment, and Security Committee.
All the directors up for election or re-election today will briefly address the meeting prior to the vote for their respective resolution. This is Dion and Kate's first AGM with us. Dion joined the board in March of this year, and Kate joined the Qantas Group as General Counsel and Company Secretary in August of this year. A very big welcome to both of you. Also here today are Julian McPherson and David Richards, the Senior KPMG Auditors, who are available to answer any specific questions you may have about the conduct of the financial year 2025 audit. I'll start today's meeting with some opening remarks, and then hand over to Vanessa for some further brief comments. After Vanessa has spoken, we will move to the formal business of the meeting, including voting on the resolutions to be put to the meeting and answering your questions.
I'm pleased to confirm that a quorum is present, and I can therefore formally declare the 2025 Annual General Meeting open. Good morning again, and welcome to our Annual General Meeting for 2025. It's a privilege to be here in Brisbane, addressing you as Chairman of this great Australian airline. Queensland and Qantas have an enduring connection, of course. In nine days' time, Qantas will mark the 105th anniversary of when our founders established the airline in the outback Queensland town of Winton. Today, Queensland is a critical hub for Qantas and Jetstar, home to almost 4,000 employees. I'll begin with a brief overview of business performance, and then touch on a few of the areas that the board and management are focused on. Before handing over to Vanessa to provide more detail on key business units, and then finally we'll move to taking questions from shareholders.
The past year has been one of delivery for the group, as Vanessa and her management team continued to execute on the strategy to improve the customer experience and restore pride and trust in the airline. The group delivered a $2.39 billion underlying profit before tax, driven by our dual brand strategy, with ongoing demand across all market segments and the continued growth of the loyalty business. The strong financial performance has enabled us to continue to make significant investments in new aircraft, customer initiatives, and our employees. We've also resumed paying dividends, which I know is welcomed by our shareholders here today and those dialing in. In August, we announced a base final dividend of AUD 250 million. A special dividend of AUD 150 million, taking dividends for the full year to $ 800 million, fully franked.
At last year's AGM, I gave my assurance that board and management were comprehensively addressing challenges within the group to regain the trust of our customers, shareholders, and our employees. I said then that as an organization, we were heading in the right direction. Our results this year have confirmed that. Online on-time performance for both Jetstar and Qantas was up. Customer satisfaction for both airlines was up significantly. The company's overall reputation index rose materially, and employee engagement was also up sharply. A big part of this success has been the effort to reset the company culture, with an unrelenting focus on our customers and our people. This was one of the areas identified for improvement in the comprehensive governance review, which we publicly released in August 2024.
That review looked at decision-making and processes that had had an impact on our performance and trust in recent years, and how the group should evolve to be more resilient, transparent, and competitive than ever. All of our responses to the recommendations have now been implemented. The board is now receiving more detailed reporting on customer feedback and pain points and employee engagement as part of broader improvements to the way that the board and management work together. Changes to executive objective setting and remuneration, and a firmer focus from board and management on risks, have also been addressed. We've had our implementation of the responses to recommendations and the actions that we've taken reviewed externally with positive findings and observations. The changes that we've made are driving better decision-making from the board and management down, allowing us to get the balance right between customers, employees, and shareholders.
I know many in this room and watching online today would travel regularly. Our pilots, crew, airport customer service teams, and engineers really are some of the very best in the business. I travel often on Jetstar and Qantas, both in economy and premium cabins, and speak to many of them and hear directly from them about how things are changing and changing for the better. They can feel the difference from the measures that the leadership team have put in place, and customers are noticing too. Last week, we received a note from a loyal frequent flyer who said, I quote, "The cabin crew had a spring in their step that I hadn't seen for ages." Like most Australians, we have a fondness for Qantas, which dissipated over recent years, but it is clear that you are rekindling that feeling amongst your staff, and it shows.
I think that this is testimony of just how far the culture of the group has progressed under Vanessa's leadership. It is just one example of the passion that our employees have for this company. Our people are at the heart of what makes Qantas a great airline, and I want to thank them for the incredible contribution they make every day, ensuring that our customers get to their destination safely. Of course, there is always more to do, but we are very pleased with the progress being made so far. Another key finding of the governance review was to ensure that the board continues to have the right mix of skills and experience that are needed to guide the group. I think we have made great progress on that front too. In March, we welcomed Dion Weisler as a director.
Dion is a very accomplished Australian who brings international, executive, and board experience across several leading technology companies, including. As former Chief Executive Officer of HP Incorporated, one of the world's largest personal computer companies formed from Hewlett-Packard. Interestingly, Dion is also a pilot in his spare time, and I'll let Dion introduce himself shortly, and you will have a chance to vote on his appointment to the board. In July, after more than a decade of service, Todd Sampson completed his tenure on the board, and I would like to express my thanks to Todd for his contribution over many years. Today, we've also announced Alison Watkins will be joining the board as a non-executive director. Alison brings deep experience as a senior executive and a director across a range of industries.
She holds a number of positions, including being a member of the Reserve Bank Monetary Policy Board, a director of CSL, Wesfarmers, and Chancellor of the University of Tasmania. Prior to that, her senior executive roles included Group Managing Director of Coca-Cola Amatil Limited and Managing Director and CEO of GrainCorp. Alison will join the board in early March. Once she joins, six of our eight non-executive directors will be new, having joined the board since 2023. This renewal is bringing fresh, diverse, and cross-industry perspectives to the board, adding to the valuable experience we have with Tony and Belinda. While we've made progress during the year, there have been some significant events that impacted our people and customers, and I'd like to address upfront.
Firstly, the penalty from the unlawful outsourcing of our ground handling during the pandemic was confirmed in August this year and amounted to AUD 90 million. This was inside the range that we had expected. I'd like to add to Vanessa's apology to the 1,820 former employees and to their families who suffered as a result. This fine has been paid, as has the AUD 120 million in compensation, which is being distributed by an independent party to impacted employees, bringing closure to the matter. The board addressed the remuneration consequences for management in August last year with knowledge of the potential penalty and compensation payment that Qantas was facing. The board therefore considered it inappropriate to reopen the matter and impose a second penalty on management for the same issue.
The second matter I would like to address is the cybersecurity incident that affected many of our customers in the middle of the year. We understand that the hackers targeted users of a well-known third-party supplier. Unfortunately, successfully impacted more than 40 companies worldwide. We've put in place additional security measures, increased training across our teams, and further strengthened system monitoring and detection since the incident occurred, with our support line and services still in place for customers. Through the New South Wales Supreme Court, we also have an ongoing injunction in place to prevent the stolen data being accessed or published by anyone. As disappointing as this incident was, sadly, cyberattacks are becoming an ongoing reality for all organizations these days. Management's response to the crisis was exemplary.
Despite this, however, in recognition of the impact of the incident, the board made the decision to reduce short-term bonuses for senior executives by 15 percentage points for FY 2025. This decision demonstrates our commitment to creating a culture of accountability and ownership. In conclusion, while there have been some significant challenges, overall, the business has had an outstanding year, delivering not just on financial metrics, but importantly, delivering for customers and our people. Vanessa and her leadership team have done a fantastic job. With the improvements I've detailed, combined with strong financial performance, Qantas is in a strong position to make the most of the opportunities in front of us. Customers are already experiencing the benefits of our fleet renewal program. With one new aircraft arriving every three weeks on average over the next few years, representing the biggest fleet renewal program in the company's history.
These new aircraft will enable us to connect Australia to the world in new ways, continuing the legacy envisioned by our founders in Winton 105 years ago. In closing, I want to thank our shareholders, our customers, partners, and our more than 30,000 employees for the achievements of the past year. As I said earlier, our people are incredible at what they do, and their passion and commitment is what will continue to drive our success. With that, I'll now hand over to Vanessa to say a few words.
Thank you, John, and good morning, everybody. It's wonderful to be here in Brisbane at this year's annual general meeting. Excuse me. As John mentioned, it's fitting that we are gathered here today. Qantas, and Australia's first international passenger air service, departed from Brisbane for Singapore in April 1935, 90 years ago.
The journey was operated by a Qantas de Havilland DH86, carrying just two passengers and three crew. It took three and a half days and 16 stops. Today, Qantas and Jetstar operate more than 250 flights from Brisbane every week, which thankfully do not take nearly as long, as well as more than 1,800 domestic flights. In the past 12 months alone, we have launched three new Qantas international routes from Brisbane to Vanuatu, to Manila, and the Pacific Island of Palau, while Jetstar launched a new Brisbane to Bangkok service. We see more opportunities to grow in Brisbane and Queensland, and we are pleased to be holding our annual general meeting here once again. Before I turn to our recent performance, I want to acknowledge and thank our people who serve our customers with passion every day.
When I'm traveling on our network, visiting crew rooms, visiting hangars, or working alongside our corporate team, I see their dedication and passion for their work. Their professionalism and commitment are the foundation of everything that we have achieved this year. As John mentioned, the group delivered another strong result last financial year. Our profitability grew, demonstrating the value of our integrated portfolio across Qantas, Jetstar, and Loyalty, and supporting our ongoing investment in fleet and customer improvements. This was largely off the back of continuing strong demand for travel, as well as the benefits of the new aircraft that we are seeing coming in. We also saw more flights depart on schedule, with both airlines achieving their best on-time performance since 2019. Qantas was, again, the most punctual domestic airline. Our customers noticed the difference, with improvements to satisfaction across almost every metric.
Importantly, our dual-brand strategy with Qantas and Jetstar continues to provide real value for both premium and low-cost travelers and a strategic advantage for the group. Qantas benefited from the return of business purpose travel, which is now almost back to pre-COVID levels domestically, and increased activity in the resource sector. Qantas' international capacity also increased during the year as we welcomed back another A380 and added frequency on key routes. Strong customer satisfaction on our ultra long-haul routes to the U.S. and Europe is providing us great confidence as we progress towards the launch of Project Sunrise flights in 2027, and I will come back to that a little later. Jetstar also had an exceptionally strong year. It continues to open up more opportunities for more Australians to travel affordably to places which were once out of reach.
During the financial year, Jetstar carried 25% more customers internationally compared with the previous year, thanks to the launch of 11 new international routes. Domestically, the airline carried a record 16 million passengers with strong profitability. Many of those passengers experienced the new aircraft in Jetstar and the impressive product improvement that they provide both onboard and on the ground. Maintaining its focus on value, around one in three Jetstar customers traveled for less than AUD 100 during the year, an incredible result for customers. Australians' love of earning Qantas Frequent Flyer points helped deliver another strong performance for our loyalty business as program enhancements increased member interaction on the ground and in the air. The launch of Classic Plus has provided more opportunities for our members to use their points to book a flight. More than 1 million Classic Plus seats have been booked since it was launched.
Driven by this strong customer engagement, Australian businesses continue to see value in partnering with Qantas Loyalty, with David Jones being the latest major Australian brand to join the program and provide more opportunities for frequent flyers. This morning, we released a trading update which shows we are on track for another successful half. All segments are continuing to perform well and mostly in line with previous guidance. Australians' love of travel continues to drive strong leisure demand, with the resource sector and also the small to medium-sized business sector growing over the half. Corporate travel is continuing to grow, although it is less than what we had previously forecast. We are adjusting domestic capacity in the second half to match the demand profile that we are seeing.
This continued strong performance is critical as we invest in our huge fleet renewal program, with more than 200 aircraft on order and arriving over the next decade. We welcome 17 new aircraft this year across Qantas, Qantas Link, and Jetstar. Elevating the onboard experience, reducing fuel burn per seat, and improving unit economics. In late September, we marked a significant milestone when Qantas saw its first two A321XLRs enter commercial service, making Qantas the first airline in Asia-Pacific to operate this next-generation aircraft. This will gradually replace our fleet of 737s. I flew on the first A321XLR launch flight to Melbourne, and the aircraft is stunningly quiet, and it offers incredible experience for customers. Alongside new aircraft, we are refurbishing the interiors of almost 80 existing aircraft, including Jetstar's fleet of 787s and also Qantas' 737s.
The world also got the first glimpse of our Project Sunrise A350-1000 ULR today, having recently moved through several major milestones in its final production line. This is an aircraft that will change what's possible when it comes to international point-to-point air travel. Our teams are incredibly excited for the arrival of the first aircraft late next year, a landmark moment not just for international aviation, not just Qantas, but I think also for Australia. We are also developing new products for our fleet and today announced the introduction of Qantas Economy Plus, which will allow our customers to fly with extra leg room, priority boarding, and priority access to overhead luggage space. Our brand new A321XLR and A220 aircraft are being delivered with this extra leg room installed, and we will be retrofitting it to our 737s from December.
Knowing how important seating is to our frequent flyers, our high-tier customer members will receive complimentary access to this new product, enhancing the benefits available to them. Qantas Economy Plus will be available from early next year. Now, as John noted, a key focus across the group is our people, improving how we engage, reward, retain, and support them. We know that as a group and as we grow, our business improves from what our people bring every day. Ensuring that our employees can directly benefit from our success is incredibly important. Through our new annual non-executive employee share plan, which we launched in August, around 25,000 employees will now have the opportunity to receive AUD 1,000 worth of shares every year linked to our financial performance. This has been well received by our people and our frontline.
Above all, our priority is to provide a safe environment for our people and customers. While we performed well on operational workplace safety last financial year, we did experience some very serious safety events, with an airport worker being seriously injured in a fall from an aerobridge at Sydney Airport. In September this year, a worker at our freight terminal in Sydney sadly passed away after being struck by a vehicle. These incidents underscore the importance of vigilance and continued improvement in our safety practices, and our thoughts and support continue to be with those that have been affected by these events. In concluding, the last 12 months has been a year of significant achievement for the group, but also one where I reflect on the challenges that we had.
While we are pleased with our progress, we remain focused on further improving our performance and continuing to deliver for our customers, our people, and our shareholders. I won't for a second pretend that the job is done, far from it. The culture at Qantas, it has changed, it is changing, and it will continue to change for the better. We have also got a lot to look forward to over the next year. We expect to take delivery of a further 20 new aircraft, including five more A321XLRs, which will start to fly on more routes. Qantas will start flying between Adelaide and Auckland, Perth and Auckland, Perth and Johannesburg, while Jetstar will connect Brisbane and Cebu, Brisbane and Queenstown, and Brisbane and Rarotonga. The A350-1000 ULR Project Sunrise will roll off the final assembly line, and it will begin its flight tests. New lounges are opening.
More international flights will have more Wi-Fi, and new technology will be rolled out for the benefit of our people and customers. We'll create exciting opportunities for our people to progress their careers. We will, of course, continue the unrelenting focus on the safety and security of our customers and our people, whether it is safely operating flights or protecting their data. Thank you for joining us today, and thank you for your ongoing support. Great.
Before I move into the formal business of the shareholder meeting, can I thank members of the media for being in attendance this morning and ask for filming and photography to cease at this point, as we've traditionally done in previous AGMs? We'll pause for a sec for videographers and photographers to leave the room. Thank you. Okay.
Now we will turn to the formal business of the meeting, and let me first outline the procedural matters for the meeting. As this is a meeting of Qantas shareholders, only shareholders, their appointed proxies or authorized representatives are entitled to make comments, ask questions, or vote. The notice of meeting, dated 26th of September 2025, was circulated to members and made available on Qantas' investor site, and I will take that as being read. Following consideration of the reports, I will turn to general questions. Shareholders with queries relating to specific resolutions are requested to raise them at the time that resolution is being considered. If a shareholder has a specific customer-related issue, we have with us today dedicated customer care representatives from both Qantas and Jetstar who will be available at the customer care desk in the foyer after the meeting.
Similarly, for any current or former employee and ex-employee shareholder wishing to raise an employment-related issue, we have representatives from our remuneration and benefits team, as well as our industrial relations team, available after the meeting to follow up your specific questions. Those in the room who would like to ask a question are asked to move to one of the microphones located throughout the auditorium. After providing your shareholder details to the attendant, please wait to be invited to ask your questions. Only those with a handset or a blue non-voting shareholder card are allowed to ask questions. Shareholders who are attending online are able to ask questions via the online meeting platform by clicking the messaging icon on your screen, selecting the item of business relevant to your question, typing your question, and then pressing send.
You can view your submitted messages along with any written responses by selecting my messages. You can also ask a question verbally by clicking on request to speak at the top right corner of the broadcast window. You will then be prompted to confirm your name and enter the topic of your question, submit your request, and follow the instructions to allow access to your microphone and connect to the queue. You will be able to listen to the meeting on the audio line while you wait for your question. To allow as many shareholders as possible to participate, do please keep your questions concise and at the limit of two questions per shareholder. Questions that are relevant to the business of the meeting will be read aloud to me by a Qantas staff member, and we may amalgamate questions if there are multiple questions on the same topic.
We will save answering questions specific to the resolutions until the relevant time. However, those online are able to start submitting their questions now. At the time that each resolution is considered, I will invite any questions specific to that resolution from the room and from online attendees to ensure that all shareholders are given a fair opportunity to ask questions. I'll now summarize the voting procedures. All items of business will be voted on by poll, which I now declare open. If you did not cast your vote prior to the meeting and have not appointed a proxy to attend on your behalf, those attending online may cast a direct vote using the online platform or via the handset you were given if you're here in the room with us today.
You may cast your vote at any time during the meeting, and voting on the platform will close five minutes after the end of the meeting. I will give you a warning when this five-minute period starts. For those using the online platform, please click on the voting icon and follow the prompts. To cast your vote, simply select one of the options. Your selected option will change color, and your vote is automatically recorded. There's no need to press the submit or enter button. For those in the room with a voting handset, please cast your vote for each resolution using the handset. Use the trackball to highlight the resolution you wish to vote on. You can then vote by pressing the green square to vote for, the red triangle to vote against, or the blue trackball to abstain.
Once you have entered your vote, use the blue trackball to scroll to the next resolution. For those voting online or in the room, you can change your vote at any time up until the time I declare voting closed. I confirm that where undirected proxies have been given to me as board chair, I will vote these in favor of the resolution to the extent permitted. During the meeting, we will display the votes received prior to the meeting on each resolution, but only after discussion on the resolution if there is any has occurred.
I know that some disagree with that practice and want the votes received displayed ahead of any discussion, but our view continues to be that shareholders should not be discouraged from asking questions on any resolution due to a feeling that their contribution or concerns will be moot or futile, having already learned of the voting outcome. The final results will be lodged with the ASX as soon as they are available following the conclusion of the meeting. Now, if you experience any difficulties using the online platform, the helpline number is displayed at the bottom of the platform's homepage, along with other instructions on how to watch, how to vote, and how to ask questions. MUFG Corporate Markets and Lumi Technologies are acting jointly as the returning officer for this meeting.
Now, turning to the first item of formal business for this meeting, which is to consider the reports contained in the 2025 Qantas annual report. The annual report was made available to shareholders in September. It contains the financial report of Qantas Airways Limited and its controlled entities, the director's report, and the independent auditor's report. The financial report has been approved by the directors and audited by Qantas' independent auditor, KPMG. As required by Section 317 of the Corporations Act, I now lay before this meeting the financial report, the director's report, and the independent auditor's report for the financial year ended 30th of June 2025. Shortly, I will take any general questions or comments about the reports or any other general matters. As stated earlier, our auditors from KPMG are available to answer any specific questions you may have about the conduct of the audit.
I will now take questions from shareholders on the financial statements, the group's performance over the last year, the director's report, or the auditor's report. We'll start with a few questions from those in the room and then from those attending online. Those attending online who wish to ask a question and have not yet submitted one, please do so now. Can those in the room who wish to ask a question please move to one of the microphones? We got all three microphones occupied. Who's first? Ready to go, number one? Thank you.
Chair , may I please introduce Chris Maxworthy?
Chair. In the category of brick bats and bouquets, I'd like to offer a bouquet to Qantas. Two years ago, I was at the Melbourne AGM, and some of you may recall that I had the unfortunate experience of the previous chair turning off my microphone.
It was not microphone one; it was microphone two at the time. As a result of that unfortunate experience, simply because I was asking some questions that were relevant to the style of the board, I got my 15 minutes of fame. I suppose that would be a fair comment. What I would like to say is that in the past two years, last year was in Hobart at the AGM. That was a difficult time for most, as we still had the clout of the former CEO. This is just continuing a small observation, then I have a question. I have spent the last two months traveling around the world and with Qantas partners, and I have got to say that Qantas has come a long way simply in terms of, I think, staff feeling valued and listened to. That the management has.
Got a more strategic focus that is more than just the numbers, and that all the stakeholders feel that we're in this together and that the product is getting better. I would, however, say that it would be nice to see a somewhat better offering on domestic flights for those of us in economy that choose to fly with Qantas through loyalty. The key thing I'd like to see, and this goes to Doug Parker in his previous role with American Airlines, is the opportunity that we make Wi-Fi more broadly available as a subscription service. It was obvious to me in flying around the United States and into South America that the availability of Wi-Fi on AA Flights, American Airlines flights was extraordinary, and they were doing it via ViaSat. The economies of it were that you could pay for a subscription service associated with your loyalty program.
Or that you could buy casual rates. I think, particularly for those of you that commute a lot with Qantas and travel great distances, the inability to have access to things that help you be more productive in your working life or your social, personal life would be a real kick-along for Qantas. I would offer the idea that perhaps, rather than being reliant upon the offerings that might come with the platform manufacturer, we look to innovate and we look to give Australian companies that work in this space the opportunity to pilot, to test, to provide something that can be innovatively referred to as Australian and that provides value. A final comment. The three founding members of Qantas, their graves are scattered around. I come from Sydney, and up Jurral Way is the grave of Hudson Fysh.
It's in a state of disrepair at the moment, and my colleague here, Malcolm Fraser, who I've met at several AGMs ago, commented that it would be nice, particularly in this stage of commemorating the value and the heritage of Qantas, that we actually look to doing something. It's not cost. I think it's more symbolic and represents the spirit of this airline. So well done to all of you, and I'd really like to see Joyce's bonuses for last financial year trimmed, but I recognize that that's probably not likely to happen. Thank you.
Thank you very much. I appreciate that. I wasn't here for that famous meeting where your microphone was cut off, but I hope that never has to be repeated anytime in the future. I thank you sincerely for the bouquets. The airline and companies rightfully receive criticism and brick bats when they're due, but it's not so common that you get to recognize when things are doing a bit better. To hear you say that. On behalf of the management team who do all the hard work, I'd like to say a big thank you. On the Wi-Fi, I think you may be aware that the Wi-Fi is rolling out progressively. All our new aircraft coming in carry Wi-Fi. I think pretty much most of the domestic fleet now, Vanessa, has Wi-Fi.
I'm happy to give some detail on that. 737s, all of our 220s, XLRs domestically all have Wi-Fi. We've now enabled that when those narrowbody aircraft fly short-haul international. We will have all of our international fleet, the majority of it, with Wi-Fi on by June 2026. We have 330s and a 787 currently now flying with it. We know that we need to do that as quickly as possible, and I think you make a really good point. We also did not want to move quickly and not have an experience for our customers where it was really fast. Because of that, now geography, we needed Viasat. We also use Viasat. We needed them to launch some strategically placed satellites, which they have now done. We are moving with pace. Thank you. I appreciate that comment.
Great. Lastly, your comment about the grave of Hudson Fysh. I was not aware of that, but I think you can take an assurance from all of us here that we will look into that straight after this meeting. Number two, please.
May I introduce David Losemoore.
Thanks. Good morning. My name is David Losemoore, and I'm a volunteer for the Australian Shareholders' Association. Today, we hold proxies from 65 ASA members and non-members for 387,000 shares. There's been significant interest in the workload of the chair, and at our pre-AGM, you assured us that you'd be addressing this in the coming year. Could you please elaborate on this, please?
Yep, I can. So I am still committed to do that. It's taken a little longer than I expected due to issues in one of the companies in particular that I'm involved with when I didn't think it was appropriate to not to follow through and look after shareholders' interests. I'm still committed to that, and I will do that. I would say also that, in respect of all of us, including myself, we have a very rigorous.
Performance review of directors' contribution, including mine, every year, and we're assessed by all of ourselves independently and by an external party. I can assure you that my colleagues here would tell me if I was not fulfilling the role of chairman, and I would not be doing it. I stick to that commitment. It just took me a bit longer than I thought.
For the Qantas 2022 Climate Transition Action Plan, what practical steps will management take to reach the target of 10% sustainable aircraft fuel by 2030? Usage was only 0.2% in financial year 2024 and 2025. What are the main obstacles, and can you clarify the likely impact on company costs and customers?
I'll have a go at that, and then maybe Vanessa can add a little bit. This is a rapidly evolving space. You are correct in the amount of SAF that we acquire this year. I think next year, or this current year, we're aiming at 1% and then 2% in FY 2027. I realize that's not 10%, but for all airlines to achieve these ambitious goals, it's going to need a tripartite activity between government, agriculture and feedstock, etc., and companies using it. I mean, right today, firstly, SAF is very expensive, considerably more expensive than regular jet fuel. Obviously, nobody wants to be passing on very large costs to our customers. Secondly, even if we could do that, the SAF is not available. We've been purchasing it from overseas, and there's very little production in Australia, even though I think the CSIRO estimated that we could produce 5 billion liters here in a relatively few years with the right incentives. That's going to require government involvement, the potential.
Imposition of mandates, and other things to get there. It is very hard to say. We can see the route to how we get to 10%. It is very hard to say what the exact costs of those will be, but obviously, we seek to minimize it as much as possible. Have I missed anything there, Vanessa?
No, look, I think we have always said it is going to be hard, and it will be hard. We are seeing and picking up SAF right now out of the U.S., and at the moment, it is pretty close to actually parity with fossil fuels. That is because of the U.S. government and local incentives that really encourage demand and take up. We are taking a lot of those learnings at the moment, and we are working really.
With the Australian government to see what we can do here because we need to be able to produce SAF in Australia. 70% of our fuel is out of Australian ports. One of the things that's important, it's important for us in terms of our sustainability journey, but we think it's also important for a new industry, new jobs in Australia. We also think it would be great for fuel security as well, which is in the national interest. We think that because there are so many of these aligned interests, there will be an opportunity for us to really work well with the government on that. Just on cost, as John said, it's hard to predict cost. We know that cost, ultimately, SAF will be a part of our fuel cost. We know fuel costs.
Need to be recovered, and so we will look to make sure that the net income or net impact of SAP is managed through fares as well.
Thank you. Number three.
Chair, may I introduce Dan Steiner.
Mr. Chairman, and particularly the new CEO, I want to welcome you both. As a long-term Qantas frequent flyer member, as a long-term shareholder, you and your board are extremely welcome and refreshing, and I have every optimism that as I continue to fly Qantas, things are going to get even better than they are. I want to thank my colleague from the ASA. They've done a wonderful job with the extensive review and report on your performance this year.
I have a question that initially will be directed at the auditor, but I also want the subject that I'm going to cover to be picked up by either the Chairman, Chief Executive, or the appropriate person. There's an awful lot being said about artificial intelligence. AI is being rolled out at a pace that is beyond my ability to comprehend. I would like to direct a question to the auditor. What is the extent to which artificial intelligence is used in the audit process? Has it improved both the speed of the audit, the accuracy of the audit, and the ability to provide objective, constructive input to the airline into how it can improve its financial reporting?
The second part of my question is directed to Qantas itself in that we have Mr. Weisler, who is presented to us, and I'm pleased that he is, as someone who has an enormous technological background, and consequently, he may be one of the people on the board that can provide input into encouraging the widespread use of AI where it is a benefit and don't use it as something that hides the transparency to us mere shareholders of what can happen, what can be delivered, and when. The auditor first, and then I'll wait for an answer on the other question.
Okay. I will indeed ask the auditor to respond, but prior to that, thank you for your opening comments about the welcome. We won't get everything right all the time, but we're trying really hard. I think I can say that on behalf of our board and 30,000 loyal Qantas staff members out there. Please.
Thank you, Chair. I think that's a great question. We do use technology really extensively as part of our audit procedures. We do use technology in a really thoughtful way, and AI is part of the way that we deploy technology on the Qantas audit. I should emphasize that that's done in a very thoughtful way, in a very contained way. All the AI technology tools that we used are tested, not just locally, but globally, because they have to obviously withstand the rigor of meeting the stringent auditing standard requirements and obviously all the independent regulatory reviews that occur on our audits, both locally and globally. We have what we call a trusted AI framework at KPMG. That means deploying AI in a really thoughtful way. We never rely on AI in isolation.
Any AI tools or outputs that are used are cross-checked and cross-tested by other audit procedures. Our staff are properly trained to make sure that any AI outputs through the audit process are properly validated and that they really just deliver an enhanced enhancement of audit quality. It is driving some efficiency, but obviously, there's cost and there's training and a lot of rigor that goes around it. That's a great question. Hopefully, that gives you a bit of color about how we use the tools.
Thank you. Thanks so much. Let me just try and answer the last part. We are indeed extremely fortunate to have Dion on our board. He knows more about this subject in his little finger than I probably do in my whole body. I would also say two things. One, it's the responsibility of all directors to be across these trends, and AI is going to affect everybody, whether in your personal capacity or at home or what. We have all got a real responsibility to make sure that the group is as up-to-date as possible. The second point I would make is that people should not see this through a lens of fear, of job losses, and some of the other things that you see in the media. To the absolute contrary. I think one of the great things, capabilities of AI, is to analyze masses of amounts of data that is very hard for a human being to do and to reach conclusions from that. I cannot think of many industries where there is more data than airlines, whether it is in.
I cannot think of many industries where there is more data than airlines, whether it is in f light scheduling, whether it's in maintenance procedures, analyzing all of the incidents that have happened over years, trying to draw common threads out of it. I think AI is going to be hugely beneficial in making us a more efficient airline and a safer airline. I'm not worried about the job loss side at all. I hope that answers your question.
Number two, please.
Chairman, please introduce Spiro Agoutsis. Thank you, Angie.
Hello, good morning. Good morning, board. Good morning, Chairman. Good morning, Vanessa. Good morning to the institutional shareholders and the retail shareholders and everybody here today. I'd like to say thank you to all of the wonderful staff on entry here, on the wonderful welcome. I'd like to say thank you to Kev, who is welcoming all of the shareholders and myself. So thank you for that very warm welcome, Kev.
Firstly, I'd like to share from first-hand experiences. My multiple flights this year with Qantas and Jetstar. Congratulations to Vanessa and her team because customer service and customer attitude towards Qantas and Jetstar has been amazing. I'd have to say thank you. I'd even like a letter and a box of chocolates to go to each and every one of the cabin crew, the senior captain, and the first officers of all of those flights for doing such a remarkable job. I definitely see the change. The culture change, the attitude, everything is as what your frequent flyer rewards member had written in that spring in the step. I definitely see that. I feel that. And it's wonderful to feel that as a customer.
All I can say is that keep that great work up because your customers, as equal as all of your staff, are so vital to your business. They are your biggest marketing program. They will talk to other people, both your staff and your customers. They will improve your business to no end. The shareholders, yes, we're all important, but we are not to be put first. Your customers and your staff are first always. You will reap the benefits. You'll be so proud of your staff for looking after them and training them and giving them what they need. I like to see that we bring Qantas back as a brand and as it was a family when James Strong was at the head many years ago, using that as a benchmark.
I can see that Vanessa will be one of the greatest CEOs of Qantas now and in the future, and we will bring Qantas back up to where it once was and beyond. I want to share from first-hand my experiences. I can understand John being on flights, but he'll be known as the Chairman of Qantas, so people will be on their best behavior. I'm not known. From that position, when I hear wonderful comments, it's enlightening. It lifts me up as a shareholder. Also, what's important is that I take the time to ask questions to your cabin crew, your senior captains, your first officers, your ground staff, everybody that I meet in Qantas. I ask questions. What do you see that we need? How can I help to improve, to bring these questions to the board so that action can be taken?
The important thing is, across collectively with the board and middle management, it's important that middle management work to support the board and support Vanessa Hudson. If you get anything coming through there, it can't just stop there. It has to be transparent and get to the top of the board so that the board members can act upon that. If I can encourage the whole team of Qantas to work together like a family, we will see greater things. Under Vanessa's stewardship, the best is yet to come. Thank you, Mr. Chairman.
Thanks, Spiro. It's good to see you. A Qantas AGM would not be complete without you. Thank you for your kind comments. On a serious note, what you say about the employees of the airline, you're 100% right. They're the public face of the company. The board meets people from time to time, but it's the crew on the aircraft. It's the crews in the terminals. It's the engineers. And they're the people in whose our future depends. We are very, very proud of them. I flew up myself, and we had a CSM on the flight. It's probably one of the best experiences I've ever had. Interestingly, to your point, if I travel on Qantas business, usually they know my role on the board, but I also travel with other businesses, and they don't know in that respect because I'm there as a private person. I make a point of talking to them. I don't want to trap them and make them think that I'm interrogating, but I really do take the trouble to see what it's like for not a Qantas director, but for someone else.
I know it's anecdotal, but enough anecdotes make a data point. The change over the last 12- 18 months with the crews has been dramatic. That's leadership, most definitely, but it's also new aircraft. If you're working in the cabin and the customer's seat back doesn't recline and the video doesn't work or something, it's hard to always keep that positive spirit. We need to double down on that, and we are on that fleet replacement program to make people proud of the place they work, not just the way they work.
Thank you, John. Look, if I can just add one last point. It's real interesting when you speak to people who are Qantas customers. From 24- 36 months ago, I can't repeat what was said, but now it's like a refreshing breath of fresh air. The comments that I'm getting back are amazing. Customer service, the attitude, everything, just the energy, a positive, a real positive energy. Your customers are a great barometer. We have to thank them as well.
No, they are, Spiro. Thank you. I often talk amongst ourselves as CRO, it is almost in two parts. One, we obviously have to run an airline. Airlines are not the easiest of businesses, but have to run that, deliver returns, and all the other things. We are also, Qantas is a part of the reputation of our country. Even those overseas who maybe do not know much about Australia, they will have heard of Qantas. We feel a very heavy weight of responsibility to look after the brand, not just for Qantas and our 30,000 employees, but for Australia as well. We take that very seriously.
Thank you, John. Appreciate it. Thank you.
Number three, please.
Chair, may I introduce Michael Ritchie?
Good morning, everyone. I'd like to thank everyone for turning up. It's good. Vanessa and Doug might remember me from Melbourne two years ago, where I think the tone of the AGM was very different. Doug, I'm sorry, I didn't introduce myself properly yesterday when we bumped into each other. I'd like to congratulate Vanessa and the board and the CEO team. One of the things I have noticed as a frequent flyer, and I've got a green dot on my card and I'm not talking green tier, having flown on about six different Qantas planes, is that the customer-facing teams from check-in, lounges, on planes are a lot happier. It shows, and the service improvement is appreciated and experienced. I think that was backed up by the improved staff satisfaction surveys. Particularly for someone who.
In a previous life managed customer service staff, I think the key metric that really impressed me was the improvement in the participation rate in those surveys because I think that that is a metric that is undervalued in a lot of instances. Vanessa, I hear and see comments and read comments. In the platinum Facebook chats that you wander around in lounges. That gives you a lot of kudos, so well done on that. One, I guess, weak point, and I'm not talking specifically about the privacy breach, which I was caught up with. And apart from all of the privacy data, the dark web now knows what my seat preference is, which will be very useful to someone, I'm sure. But that's just something that will happen to me again, I'm sure. Is the service center in Manila needs work. I do have one question for you.
It might be Vanessa might. There are, and have been for some time, a lot of logistic and supply chain issues impacting aircraft delivery. Do you have any senses to whether or not that is improving, or is it still just rolling along with different issues continuing to crop up? Do you see how that is going to pan out moving forward?
Firstly, thank you for your opening comments. Again, I think we've touched on the customer service, but if our customer-facing employees are happy, it shows, and people see that. Get that. I'm not sure about Vanessa's comments on the platinum website, but I'm sure they were very positive. On the aircraft, I'll let Vanessa answer, but basically, the industry, the manufacturers really, and it's not just the airframe, it's the engines and other components, really haven't fully recovered from COVID. They are very extensive delays.
I think Airbus have like 2,800 aircraft and options on order, something an enormous number. I do think that our management have done an exceptional job in sort of punching above our weight. Vanessa mentioned we have 200 aircraft on order, the biggest capital expenditure, fleet re-equipment program the company's ever done. I think in that difficult environment, Qantas is really coming out of it very well. Maybe did you want to add any detail?
Yeah, look, it's a great question. The supply chain, particularly in aircraft delivery, engine repair, manufacture, it's really tight still. We're not through it yet. I think if Airbus or Boeing were sitting up here answering the same question, they would say the same thing. We're not going to sit back and just accept it is what it is.
Our engineering team across Jetstar and Qantas, we are all over. Right through the supply chain. We now have somebody on site in the Airbus manufacturing facility where we inspect the production process, the quality of the process. We will do that with Boeing as well when the 787s are delivered. We do that with seat manufacturers as well because one of the challenges in that supply chain, it's not just all in the hands of Boeing and Airbus. There is a lot of regulatory hurdles that now have seat manufacturers have in terms of certification, where it's all increased. We are seeing that there's a lot of pressure still in the system. We are going to have absolute relentless focus on all of everything that's delivered, but also even the in-service aircraft as well.
The A380s are an aircraft that need ongoing care until they retire, as do all of our older aircraft. We will do that, and whatever it takes to make sure that our aircraft have the highest level of performance. One call-out that I would like to say, and I say that because we've got one of our largest engineering facilities here in Brisbane. We are so proud of the job they do up here. In the month of September, the Qantas 737 fleet had the best performance and reliability metrics in the whole globe for 737 fleets. That has been a turnaround pretty much over 12 months. I think that I share that because we have just got such incredible people in the organization.
Yeah, no, that's good to know. That's the sort of information I think. You probably could blow your own trumpets a little bit better on.
Okay.
I do understand that the global supply chain issues are causing grief around the globe. Tim Clark, I know, who's the CEO of Emirates, has been particularly vocal about concerns, as have a range of your peers.
Some of the other airlines, like I feel for Air New Zealand, for instance, who have aircraft sitting on the ground, but they cannot get engine repairs, etc. If you ask a question, could you speak to the attendant there, please? Number two.
Chairman, please introduce David Brown.
Thanks, Chair. I have been traveling on Qantas for 40-odd years now when I used to go to Saudi Arabia and dropped off at Bahrain from Perth Airport. I remember the ducks and swans that used to be at Perth Airport as well. It goes back quite a few number of years. I recently had a trip to Singapore. Thanks again to your staff and your captain service manager. She wrote me a lovely note. It would be best for an operational that's going through. I just thought it was really wonderful that your staff have reached that stage these days that they appreciate the customers that they're serving. Two questions I've got. One is, are you going to reintroduce DRP again, as you had some years ago as a long-time shareholder? I used to get that as well. I'm also a lifetime member of Qantas. I was very surprised yesterday to see all the prices of frequent flyer Qantas Club membership was going up. I thought, how much money I'm saving. It's all I'm 94, I'm told.
The other question that I had was, I did a TripADeal trip. Eleven months ago. I was a bit surprised about some of the occurrences that occurred on this trip to Japan. I was wondering, what sort of supervision are you undertaking on the contractors who are obviously providing the service to TripADeal, which is now a fully owned subsidiary of Qantas? Also, the health standards of the staff that are actually providing the service to you. The bus driver for 18 days had recently just come back from a back operation to the extent that all the male passengers used to load the bus each day with all the cases for the 30-40 people that are on board, not the driver. He could not do it. I am just wondering for a safety issue. The other issue was that we had to complete a questionnaire form.
We had to return the questionnaire form in an envelope that was numbered because the supervisor lady said that unless she got every one of these envelopes back with her tips in it, she would be fined by the company that was providing the service. So I'm just wondering what sort of work that you were doing through TripADeal in saving some of your customers having to go through that sort of issue.
Okay. I think that's definitely one for Vanessa. Let me just comment on your first comment about the DRP. We review that every year. Currently, we obviously don't have that program in place, but we review it annually. As and when it's appropriate, we will reintroduce it. No, no, definitely haven't forgotten. I take the easy ones and Vanessa gets the difficult ones.
Thank you for sharing that experience that you had with TripADeal. TripADeal, as you said, we acquired fully that business and it is doing incredibly well. We absolutely have policies and standards, operating procedures around safety, the safety of our contractors as well, which is as high as it would be for Qantas. Although I cannot answer specific on your trip, I will come and connect with you after this and understand where you went. I will follow that up because we need to make sure that your experience is a great one, but also the service providers that are looking after you have got the right standards. Trust that I will do that. Thank you.
Thank you very much.
Great. Number one, please. Thank you, sir.
Chair, may I please introduce Mr. Malcolm Fraser? Thank you very much.
I'm delighted to hear about the engineering achievements in the Brisbane facility. I actually worked in Qantas for 39 years in Sydney and got to know a lot of the people there. Such helpful people. I left long ago in 2007. I just wanted to bring to everyone's notice that this year was the passing of Mr. Bob Alcorn, who was the longest-serving member of Qantas in any category whatsoever. I think he was in the company for 55 or 56 years of continuous service. He was given a special award in London by the Royal Aeronautical Society. I was privileged to have him as my manager for a period while I was working there. Thank you.
That's absolutely lovely to hear. Thank you for your dedication of all those 39 years. Vanessa, did you want to say anything on directly?
Yeah, look, just one thing I'd like to reflect on is that wisdom of experience that is across the group now in Jetstar, a lot in Qantas. We as a leadership team recognize that that is one of our core assets, is that we've got this experience. And just to share with you, to recognize that and to celebrate, although we couldn't be there for Bob's celebration, we regularly have 35, 40, 45, 55. And across the group. Across every workplace, engineering pilots, cabin crew, ground staff, Jetstar, QantasLink, we have instituted this year celebration and recognition where everyone who's met a major milestone will connect with their partner at an event. And that is something that happens now. Right through the year. So thank you for sharing that story.
Thank you, Malcolm. Number three, please.
Chair, may I introduce Brian Fuller?
Thank you. My name is Brian Fuller. I live here in Brisbane. First of all, I'd like to say a big thank you to Vanessa for her work. And the whole board, because the amount of work that's taken place since the pandemic to bring this airline back to where it is today is really wonderful. Just wanted to extend a very big thank you to Vanessa and the whole board. There are certain issues I'd like to discuss, and I'd just like to get feedback on this. One is, Qantas is described as the spirit of Australia. You are actually in a very special company. This is a company that is very different from any other company in Australia. It has a parliamentary control that not more than 51% of this company can be foreign owned. I'm concerned on that issue. I'd like to know how much of Qantas at present is foreign owned.
The other thing is we've just seen one other airline, Rex Airlines, just be bought out by America. Also Virgin Airlines. That's not Australian owned. I'd hate to see this company go the same way as Virgin and Rex. I'd like to see it continue to be Australian. There are other issues I'd like to talk about. Right here in Australia now, we have a very bad situation. Here in Australia, one in seven people live in poverty. One in six kids live in poverty. That's not a good situation for any country. I'd like to see a situation. I know that you donate to a lot of charities, and I love your work you're doing there. I'd like to know if there's a special section of the company that is dedicated to charities and the support of charities here in Australia. There are certain charities like the Smith family.
They've got about 15,000 kids that are in desperate need just to go to school and get support of school. There are other companies, other charities like LifeLine and others like that that need support. As I said, a situation where one in six kids in this country live in poverty is a total disgrace for this country. I'd like a situation where 5% of my dividend is set aside to go to charities like the Smith Family and other charities to support them to improve that situation. I want to do that voluntary. I would also suggest that that voluntary thing is also provided to other members. I know some people can't afford it. Other people can afford it.
If 5% of my dividend is set aside to go to charities, like I said, the Smith Family or other charities to help bring some of those kids out of poverty, and that goes in particular to Indigenous kids. I know the company here supports Indigenous because you have traineeships in regards to supporting Indigenous kids. That is one suggestion I have. In regards to the statement that this company is the spirit of Australia, there are two other suggestions I would like to make. I was just in Oxley, and I just met the president of the RSL in Oxley, and that was only about one year ago. I would like to make the suggestion that every annual general meeting is opened up with the Australian National Anthem to highlight this is an Australian company, and it has not been sold off to foreigners.
The other suggestion I'd make. In about four days' time, you have the armistice. Where, at 11:00 A.M., we have one minute silence for the guys that fought in Gallipoli, who fought up on the Kokoda Trail to make this country free. I would like each AGM to finish with one minute silence to remember those people who died, so we have a democracy and we have freedom. It's interesting. This is your 100th anniversary book, and it's interesting that this company was founded by two Gallipoli veterans, and I believe a Western Front veteran. There's a saying, "We have less we forget." I think sometimes we forget. During the Second World War, Qantas was the only flight from Australia to London. No other one. People risked their lives flying across the Indian Ocean just so that connection. Qantas staff died during that time just to keep this airline going.
Those are a few of the suggestions I have. I put that to the board and to all the shareholders here. As I said, I want to thank you very much for what you've done and the hard work you've done over the last few years to bring this company back to the state it is right now. Thank you very much. Bye.
Thank you, Graham. I think you've obviously had a very impassioned and caring series of suggestions and remarks. I don't think there'll be anybody in this room who doesn't share your views and agree. Let me try and go through—I made a note here—let me just try and go through some of the things you said. Firstly, in regard to foreign ownership, and that's not a regulation imposed by ourselves. That's a government decision.
I think it's extremely unlikely that certainly in the foreseeable future the government would change that. I think you can rest assured that Qantas will remain Australian owned for many years still to come. We do actually have one of the most open aviation regimes in the world, actually, where anybody can come here and start an airline. Hence, ownership of a number of the airlines that have come and gone have been overseas ones. I think we're part of the bedrock. We'll still be here for quite a while yet. In terms of your comments on poverty, look, I think, again, I couldn't agree more. It's a tragedy that there's even one child in poverty, let alone one in seven. I think our response is twofold. One, we have 30,000 employees.
We offer a lot of Indigenous and ordinary training programs, apprenticeships, engineering apprenticeships, etc. We can play a real role in giving opportunity to young people, and we do. The company has a very extensive, I think, one of the leading charitable and sponsorship activities of any large corporate in Australia. I'm sure if you want more detail, Vanessa can probably provide that. I'm personally aware of many of the programs that we support, which are very much aligned with your sentiment. Regarding the National Anthem, etc., we review how we run these meetings every time, and we get lots of suggestions of different things. Let me take that on board. We'll think about it and try to make a decision. Likewise, your comment on "Lest We Forget." I declare a personal interest in that.
I'm a bit of a military history tragic myself. One of the things that I've done is go to look for old shipwrecks. A few years ago, I found the shipwreck in the South China Sea of the Montevideo Maru, which represented the greatest loss of life in a single incident in Australia's history. Over 1,300 servicemen died in a torpedoing in the sea. We did hold a minute's silence. We went there. We put wreaths in the water. I absolutely get where you're coming from. I hope that the rest of Australia never forgets as well. Thank you for your comments and very much taken on board. Number two, please.
Chairman, please introduce David Lewis Moore.
Hi, David Lewis Moore, Australian Shareholders' Association. Can you outline the company's capital allocation philosophy for the next few years? Considering recent spending on remediation, penalties, share buybacks, and dividends, how will you ensure the balance sheet is restored and profitability maintained, especially with major fleet upgrades ahead?
Thank you. It's a very good question, obviously. We have quite a well-publicized financial framework. If I sort of summarize that in layman's terms, we've got to do four things. Firstly, obviously, we've got to be very profitable, deliver the cash flows that allow us to invest in anything. Once those cash flows are generated, which they are now due to the hard work of management, as you can see, firstly, we need to meet our investment needs. We need to be able to keep the airline refreshed and growing. We need to be able to afford the CapEx that goes with all these aircraft, which is, as I said, the largest one in the airline's history.
That's one. Secondly, we need to obviously service our debt. Our debt is not excessive. We have a well-publicized range within which we try to keep debt, and we are doing so at the moment. We need to be able to service that. Thirdly, we need to be able to pay a sustainable dividend. Airlines in particular have had such cyclical history that it's been hard for shareholders to see you've got a dividend one year and not the next year. We've all been working very hard on trying to get a sustainable, steady dividend that should increase over time barring disasters. The fourth and last bit of commitment is that as we generate excess cash on top of that, we will redistribute that to shareholders, whether by way of a buyback or other mechanisms.
We believe, and obviously, Vanessa and Rob and many others go into a huge amount of detail, making sure that that all lines up and we can rely on it. At the moment, we can see a clear pathway for certainly the next few years where we can achieve all four of those objectives.
There has been a lot of positive feedback, I think, at this meeting about how the fortunes of the company are improving and staff feeling better about the future. We also had some examples such as the CEO and chairman visiting lounges and other operations to see how things are going. Could you give us a few more specific examples of where Ms. Hudson has added real value to the company over the year?
I'm not sure we have long enough to answer that. No. In all seriousness, no, we have a fantastic management team. There's no egos. They're humble. They get out and mix with people every day. They know the flight crews. They don't sit there in isolation in business class. They're very much one and the same. At the board level, we have a director's education session every single board meeting, and that often involves a physical visit where we go and learn more about a certain aspect of the company's operations. I'm comfortable that that's in good shape. Number three.
Chair may introduce Dan Snyder.
I'm really enjoying this meeting. I think it's.
Not as much as I am.
All of you. It's nice to meet Mr. Mullen, and I have admired everything I've read about Vanessa Hudson. Seeing her just adds to it because she's smart. My question relates to the comment about increasing the fleet, new aircraft, all of that. New aircraft involves training pilots. I had the pleasure of flying the A380 from Dallas to Sydney recently. I was upgraded to first class. A few frequent flyer points, but the A380 had just been introduced to Dallas Sydney. Not many customers knew that they had the option of getting first class. I've been flying the 787 back and forth for years. Wonderful aircraft. I was a little disappointed because I really like the 787. During the flight, the cabin crew manager asked if I would be interested in, after we landed in Sydney, meeting the pilot. I'm very interested in aviation, have been for a long time. I'm not a pilot, but I've flown private aircraft under a chief pilot. I was thrilled, and I met Steve in the cabin. I was amazed at how uncomfortable his seating was compared to first class. I learned things.
My A380 flight out of Dallas was delayed. Not delayed for an hour, delayed for a day. Why? Because Qantas identified a maintenance issue in Sydney which had to be rectified. The pilot explained that it was a hydraulic issue, and it was Qantas' practice to do these things. Even though it was delayed, it was still a wonderful flight. I enjoyed first class. I can't afford first class, but it was pleasant. My question to you, Mr. Chairman, but particularly Chief Executive, is you've got a lot of new planes coming on. There have been media reports about the fact that the number of aircraft being revitalized, brought back into service, and the pandemic, which n ecessitated a number of pilots being let go, raised the question in my mind, are you going to have enough cabin crew, cockpit crew, to satisfy the demand that you are facing to get experienced people trained up to run that fleet? And I'm waiting. I'm waiting for the A350-1000 XLR. So really excited about that. The question is, you need staff to run these planes. Vanessa may be very talented, but she's not t hat good in the cockpit.
Yeah. Thank you. Let me just comment on the first thing you said, and then I'll hand again to Vanessa, perhaps on the specifics. The delay that you experienced, obviously, nobody wants a delay, but I think it does absolutely highlight the commitment to safety and that anybody who has any concern in Qantas about the safety of an aircraft can delay that flight, have that airplane inspected, etc.
It's a wonderful culture, and it's overwhelmingly the most important thing. Obviously, when it's long haul like that, it's difficult. You don't have airplanes sitting in Los Angeles waiting for the event of a breakdown. If it's a domestic one, it's much easier to respond. I think those things will happen from time to time, but I think we should all be very glad that they do. On the crew numbers.
Look, it's a great point. A couple of things. We are training a lot of pilots at the moment. Absolutely. We have invested in a new simulator center so that we've got all of the infrastructure that we need to recruit the pilots. A couple of things is that we are very fortunate being Qantas. We attract a lot of pilots. When we recruit, we don't have a shortfall. That's great.
I think that there is an obligation in recruitment that we have to make sure that we don't strip pilots from really other important general aviation or flying doctor service. We are very conscious of our recruitment process and making sure that we stagger that. We are also investing and have invested in Toowoomba, actually, so Queensland investment of a pilot academy that is producing up to 300 pilots a year now. Qantas will normally take around 200 of those pilots, of which we are trying to get 50-50 male and female as well. We've also got indigenous scholarships as a part of that. Our retention across the group for pilots is really high. We have a very low resignation rate, which is a great asset, again.
I think it comes back to the point we've been talking about, which is the strength of our brand in Australia. It is something that we treasure and will make sure that we cultivate going forward.
Great. Thank you very much. Number one, please.
Chair, may I please introduce Mr. Patrick Bathor?
Good morning, Chairman. Whilst I wasn't actually on the Singapore flight in 1935, I'm sure that when I was a young man taking my first flight on Qantas, then an international flight, of course, you were probably five years old.
I'm older than you think.
Yeah, I'm older than you think. Anyway, bringing things to the point of status credits and all this marvelous stuff, of course, I am a lifetime member of Qantas Club, and I do manage to achieve my platinum regularly on many an occasion. I find that when I was p ast my retirement, that the bench level for lifetime Platinum suddenly becomes quite beyond me. I've worked out I probably need to fly for another 38 years or perhaps become a politician. Neither of those prospects actually are viable. My question is, are you looking at hurdles for people who are of a certain age? Obviously, we're never going to get to 75,000 status credits, not between now and whenever. Do you have hurdles in your mind, or should you have introduced them at the beginning when you had these wonderful ideas?
Yeah. Look, I'm very conscious. I think we're all very conscious that this is a difficult subject, and a lot of people feel quite emotional about it. There are always 100 examples that come to me, and a lot more to Vanessa and colleagues of very deserving people who want to change the status credit situation that they have or whatever, or the level of frequent flying. The reality is it's obviously a very contested space. We have to have some rules and structures, which we try to make as transparent as possible about the flying you need to do to generate both status credits and your level, etc. We would, from time to time, review that in individual cases if somebody has a particular reason. By and large, we really have to have a framework and try to stick to it as much as we ca n. You happy to?
Yeah.
Number two, please.
Chair, may I please introduce Spiro Agoutsis?
Thank you, Andrew. Mr. Chairman, I won't keep you too long. Firstly, I'd also like to thank you, Vanessa, because you've taken the time to go to the different airports and meet the staff. That's a very big morale-boosting program. I encourage you, and I'm sure you've got it on your radar, to do the rest of the large airports and possibly regional airports throughout Australia in your tenure. I'd like to thank you because I've had feedback from people saying it was so wonderful to have Vanessa come through and speak to us. On another level, I'd also like to take the opportunity to thank Georgina Sutton for her 36 years of amazing service for Qantas. We have amazing pilots in Qantas and Jetstar and amazing training. We want to keep that standard. Part of that standard is within our training, even as I've encouraged at previous AGMs, that we actually set up.
Our own simulator facilities on an international level and invite the training from other airlines, that we have that as a business, but also that we and our pilots have the first dibs for the training to keep them at the very best and at the very top nationally and internationally. That was an encouragement and a point that I thought I would share with you. I would like to congratulate Georgina Sutton for her 36 years. I would also like to personally invite Georgina Sutton to our Sunshine Coast Aero Club and Flying School anytime that she is available to speak to any of our students or children that would like to look at becoming pilots. I think that pretty much concludes my points. I think the last ideas I have is in the vertical and lateral horizontal integration within Qantas. Is that bringing everybody together, all of the.
Various arms, like our National Jet Systems. Our other carrier in Western Australia, QantasLink, that we bring everybody together under the same level. It brings that family. It brings family together. Everybody feels equal. I know that we're running a business, but our greatest assets are our staff and our teams and our customers. In relation to the question the gentleman raised over here, we produce around about 500 commercial pilots a year in Australia. About half of them come through to Qantas. We have also got to retain our pilots so that if they get better incentive somewhere else, we want to keep them for us.
I just encourage on those points our training, if you'd consider we set up our own training facilities and integrating vertically and horizontally and bringing all of our Qantas teams together under the same structure, including our flight attendants to be directly under Qantas. Thank you. Thank you, John. Thank you for listening. Thank you for listening, Vanessa.
Look, Spiro, I mean, I think broadly we do have what we do. You heard already about the pilot training we do, and not all of those pilots are Qantas pilots. Some of those, I think a hundred of them, are for other airlines. I think we certainly play a very strong role there. In terms of bringing everyone together, I'm not quite sure what you mean, but I know that every part of Qantas is treated with equal value by Vanessa and the team as any other aspect.
Obviously, there are some parts of the group which are not majority-owned, so there will be a slightly different ownership structure there and management structure there. Actually, everybody's treated equally now.
Oh, yes, for sure. I was specifically talking about Network Aviation and National Jet Systems, that that is integrated within the total of Qantas and those pilots on the same remuneration packages. Forgive me that I had to bring that up. Across the board, like our domestic champions in the piloting area directly for Qantas.
Yeah. It's not possible to have everyone who is a pilot on the same terms and conditions. It depends where they work, which section of the routes, which country, what aircraft types. There are lots of differences there, and we have multiple units within the group, as you know, and they don't all have exactly the same pay scales b ut everybody is treated equally within Qantas.
Thank you, John.
Thanks very much .
Thank you for listening.
Wow, that looks like we are getting close to exhausting the room. To ensure that we give everybody an opportunity to ask questions, we might move to questions from those participating online or via the phone. Alex, do we have any such questions?
Yes, we do, Chair. The first question is from Mr. Samuel Tiberi, who asks, "Would Qantas consider flying Perth to Manchester?"
We would consider it, because we're always considering new routes. Obviously, London is probably one of the major destinations that we have. I think Perth, Manchester is probably not on the drawing board for this year, but no doubt Vanessa and the team will have a look at it again next year.
Thank you, Chair. The next question is from Mr. Stephen May. Chair, we have shortened this question for brevity. He asks, "Could the Chair and the CEO comment on their overall approach to getting the balance right between refreshing the executive team whilst also maintaining continuity and corporate memory in the business, including retaining long-serving executives like Steph Tully, who appears to be doing a great job as Jetstar CEO?"
I will start by saying I second that. Steph's doing a super job. I would hope that the experience of the last year or two would be the answer to that question. We have got a refreshed management team. Vanessa is a new CEO, and has changed her team quite significantly. Some of those executives were there for a long time in other roles, and others are new. I think that is a very good balance. We are trying to do the same at the board as well.
We've got Belinda and Tony, who've been here for a longer time, which is really important because we need to retain corporate memory. We need to retain some of the experience of what's happened in the past. Equally, we have a whole lot of new directors now bringing new skills and new ideas and a fresh approach. Hopefully, we've got that balance about right.
Chair, the next question is from Mrs. Gail Donaldson, who asks, "How does Qantas decide which regional towns get access to its resident fares program? I live in Emerald, Queensland and don't currently have access." That one I have to defer to Vanessa, all the hard ones. I don't know the answer.
Yeah, thank you for that question and for everyone who's listening. We do have quite an extensive program of residents' fares, both in Western Australia and also here in regional Queensland. We spend around about AUD 60 million a year, which enables those who live in those communities to access our fares at a discounted rate. We look at many markets, many regional areas. We work with councils to determine from any one year what needs to be added. Some of those regional centers and the drivers of that can be large corporate business that is flying, which actually causes regional fares to go up disproportionately. We also look at the proportion of travelers and demand on those routes. We review it all the time, and we will continue to do that going forward. We know how important it is, and we know how important accessible air services are to major city centers. I think it is something that we are also really proud of in terms of the role that QantasLink plays in regional Australia.
We are investing as well to continue that with new Q400s, A220s, and it's an ongoing thing that we will do.
Thank you.
Chair, the next question is from Dr. Vanessa Solomon, who asks, "Why have you purchased the A321XLR for your domestic fleet? Why not go with another variant that are lighter and less costly? Is this in line with your focus on cost minimization?"
Yeah, good question. The XLR is replacing the 737, largely on trunk routes. We have, I think, six variants of something of the 737. There is a huge synergy in having as few aircraft types as you can. Our particular mix of geography, distance, population centers, domestic and international, means that the XLR is pretty well the only aircraft that can service all of those destinations. By having a single fleet that can do all of it, yes, okay, maybe the range of the XLR is a bit excessive for Sydney, Melbourne, but the synergies we get from having that one type across a wide range of our flying is very significant. There's a main reason that we made that decision. The case for the XLR was further enhanced, I think, by the work that the team did some years ago in negotiating a very favorable purchase price for the aircraft as a launch customer in Asia-Pacific. We're very happy that it was the right call.
Chair, the next question is from Mr. Kent and Mrs. Suzanne Donaldson, who ask, "Why does Qantas continually get its aircraft configuration wrong? The Sunrise aircraft should have at least 10 first-class seats, and the A321XLRs should have a consistent layout.
Firstly, I would respectfully disagree. I do not think we get configurations wrong. Obviously, lots of different opinions on these things, but the Sunrise layout that has been chosen was the result of a lot of serious work and analysis. We will have fewer seats on those aircraft than any other airline's operation of the same aircraft. I think it will have more premium seating than any Qantas aircraft as well. We will have 16, once the program is fully implemented, we will have 16 lie-flat business seats and 32 with recliner business seats. A good mix. That mix is intentional. Both the recliner layout can be used more for domestic and short-haul international, and the lie-flat for the longer routes. I think it was the right call.
Chair, the next question is from Mr. Antonio Masila, who asks, "When will Qantas stop treating Perth customers poorly and using old small 737 planes on transcontinental routes?"
Okay, I would respectfully say I don't think we treat Perth customers with disdain or poorly. Perth is obviously a very important hub for Qantas, and we are investing significantly there. We do already have a mix of aircraft flying east-west. In September, when we launched the A321XLR, that started actually on the Sydney to Perth route, which is now flying daily. We are expecting more XLRs to come, and they will go on to the Perth route in the coming months. From 2028, we will take delivery of the XLRs with the lie-flat business seats. On top of that, we are upgrading 40 of our 737 fleet with all new interiors as well.
Lastly, we're working with Perth Airport on a new combined international and domestic terminal, which will be a fantastic outcome and which should be completed, I think, by 2031.
Chair, the next question is from Mr. Angelos Kinos, who asks, "Why is your board nomination and election process so di fficult?"
I wasn't aware that it was so difficult, in all honesty. We undertake a very rigorous process like any large company does. We use external executive search companies, and we scan the market for the best possible people to join our board who can bring the most value. I think I'm very proud of my colleagues here. I think we have achieved that. Ultimately, the board election is down to the shareholders. So it's up to you to agree or disagree. I think we've got an outstanding board.
Chair, the next question is also from Mr. Angelos Kinos, who asks, "Why do directors not resign at the AGM and allow debate and comment on this rather than in between AGMs?"
If a director is coming to the end of a term and it is a scheduled retirement, then yes, the AGM is usually the time chosen for that. Directors are individuals, and they have individual lives. Sometimes individuals choose to retire for personal reasons, and we have no con trol over that.
Chair, the next question is from Mr. Kevin and Mrs. Fay Eyre, who ask, "Should the board be targeting younger directors as part of the board refresh?"
Yes, and I think I have got a reasonable track record in corporate life of doing that. It is a very significant and important decision. We look at experience, independence, diversity of backgrounds, perspective, gender, governance experience, and a whole range of others to try to choose the directors that are best suited to the board. I absolutely agree over time. You do not want all the board to be made up of stuffy old ex-CEOs like myself. You need some young people with new ideas and a fresh approach. We will certainly continue to try to renew the board in that manner.
Chair, the next question is from Mr. Derek Brock, who asks, "Why does the Qantas Group continue to use overseas-based cabin crew on both Jetstar and Qantas international services?"
Firstly, we employ a lot more Australian-based crew than overseas crew. It just makes operational sense. If you're flying particularly long routes, you're flying all the way to London, as an example, you need to have crew based in London to service those flights backwards and forwards. If you have everybody here, then you've got to fly them from Australia to London just to bring the flight back, which just doesn't make sense. So crew bases will continue to be primarily in Australia, but they will be overseas as requirements dictate.
Chair, the next question is from Mr. Stephen Mayne, who asks, "The former CEO Alan Joyce recently announced that he is writing an autobiography, which will be released before we gather at the 2026 AGM. Did we know this was coming, and have we subsequently communicated with Mr. Joyce setting out our position in terms of confidentiality and any potential public disintegration of Qantas personnel? Are we permitting any Qantas personnel to cooperate with Mr. Joyce on his research, and has he undertaken to allow us to vet the draft manuscript before it is released?"
He hasn't wronged me about it. No, look, this is something that Alan is doing as a private citizen. We are aware of the publicity, but only what I've read in the media. We have no further contact than that, so I can't comment. Obviously, we would very much hope that if he does go ahead with the book, it doesn't in any way disparage Qantas or our employees.
Chair, the next question is from Mr. Antonio Masala, who asks, "Do any board members take responsibility for the reputational damage caused to Qantas in recent years?"
Obviously, all of us, board and management, we all deeply regret some of the decisions and events of the past, their impact on employees, shareholders, and other stakeholders. I think we've been very open and transparent about that over the last year or two. The company and individuals have faced consequences for those decisions. However, in life, it's important that you draw a line and move on, that you learn from the past, but you put the past behind you and look to the future. Certainly, that's where we are focused today. Will we get everything right going forward? No, I'm sure we won't. I would be very disappointed if we repeat some of the problems that occurred in the past.
Chair, this covers the main online questions. We will respond to any questions not covered after today's meeting. Thank you.
Great. Thank you. If there's no further discussion on the reports, we will now move to the next item of ordinary business. The second item of formal business for the meeting is the election and re-election of your directors. Dion Weisler offers himself for election at today's meeting. Dr. Heather Smith and Doug Parker will be offering themselves for re-election today, pursuant to the Qantas Constitution and the ASX listing rules, which require each non-executive director to seek re-election by shareholders at least every three years. The notice of meeting and the 2025 annual report contain details of the background and experience of those up for election or re-election. Each director will address you shortly in turn, ahead of the voting on their respective resolution. Let me start. I have the pleasure in moving the election of Dion Weisler. Dion was appointed to the Qantas board in March 2025 as non-executive director.
He is a member of the Safety, Health, Environment, and Security Committee and a member of the Audit Committee. The board believes that Mr. Weisler's international and technology experience adds to the diverse backgrounds of the other directors and to the depth and breadth of experience required for the board. I would now like to invite Dion to say a few words.
Thank you and good afternoon. Thank you, Chair, fellow directors, and Qantas shareholders. It's indeed a privilege to join you for my first Qantas AGM as a director and as I seek election to the board. I want to acknowledge the board and the Chair for nominating me for the role of non-executive director. For me, Qantas is far more than just a company. It's an iconic Australian brand.
Organization, one that I've been connected to since a very early age, seeing and hearing the advertising campaigns as a kid, flying across the country with my parents and grandparents, and of course, as a loyal customer for many, many years since. To now serve on the board is an honor, especially at a time of significant opportunity and innovation in aviation. Since joining in March, I've seen the commitment of the board and the executive team to put customers and people at the center of all we do. The actions being taken across Qantas and Jetstar are about earning back trust and delivering consistency for all of our stakeholders.
As a proud Australian, my career has taken me around the world, including five years as President and CEO of Hewlett-Packard, where I led a workforce of over 50,000 people through a period of significant transformation in the technology sector, within our own business, and in a political environment that saw incredible change during that time. Over three decades from my early days at ASA and Telstra through senior leadership roles at Lenovo and HP, I've developed a deep understanding and connection to global business. Technology, innovation, and political environments. I also hold an airline traffic pilot's license and aviate regularly, which helps me keep perspective on safety, customer experience, and operational discipline from the flight deck through to the boarding gate. Today, I serve on the boards of BHP.
International Life Sciences, LEADR, Thermo Fisher Scientific, and Intel Corporation, a design and manufacturing microprocessor company, all of which keep me close to the challenges and opportunities facing diverse sectors globally. This experience complements Qantas's focus on performance, resilience, and long-term value creation. Beyond customers, people, and fleet renewal that John and Vanessa have clearly articulated, this board is keenly focused on technology, risk, and opportunity, including AI. Cyber, data, digital transformation, and safety across the group. That focus is grounded in rigorous governance and is informed for me by a strong linkage to Silicon Valley, hands-on aviation currency, and active participation in boardrooms across the globe. I want to thank you again for the opportunity to serve. I respectfully seek your endorsement and your vote to elect me as a director of the Qantas Group. Thank you very much.
Thank you, Dion. We're very lucky to have you with us. I now formally propose the following ordinary resolution that Dion Weisler, a non-executive director appointed by the directors with effect on 31st of March 2025, pursuant to Clause 65A of the Qantas Constitution and retiring in accordance with the Qantas Constitution and ASX listing rules, being eligible, is elected as a non-executive director of Qantas Airways Limited. The directors, with Mr. Weisler abstaining, recommend that you vote in favor of this resolution. I'll now take questions on Dion's election, starting with those in the room. Would any shareholder who has a question on the proposed resolution move to one of the microphones? Taking none. I don't think. Yeah? No. Yeah? No. Okay. In that case, do we have any online?
Chair, there are no questions on this resolution.
Okay. Fantastic. If there are no further questions, I will now turn to the details of the votes received prior to the meeting. On the screen are details of the votes received in respect of Dion's election. For those voting today, please cast your vote now if you haven't already done so. Congratulations, Dion. Welcome. The first director up for re-election is Heather Smith, as detailed in the notice of meeting as item 2B. Heather was first appointed to the board in August 2023. She is a member of the People and Remuneration Committee and a member of the Audit Committee. The board believes that Dr. Smith's significant international affairs, public service, and professional director experience enables her to continue to make a valuable contribution to the deliberations of the board. I would now like to invite Heather to say a few words.
Thank you, Chair, and good afternoon, ladies and gentlemen. It is an honor to be here today to seek re-election to the Qantas board. As the Chair said, I joined our board in August 2023, as we've heard this morning, and remember that was a very testing time in the history of Qantas where trust and confidence had been eroded. Since then, I've witnessed genuine cultural transformation and meaningful improvement across our company, the benefits of which are evident in the business performance that John and Vanessa detailed earlier. I'm pleased our teams across the group have been able to deliver for both our customers and our shareholders this year.
The board environment at Qantas has strengthened considerably in the past two years, and the mix of skill and experience and diversity of perspective of this board is helping, I think, to drive real change and growth from our level as board directors through management and into the teams that are delivering for our customers every day. As our board chair noted, we have enhanced our governance frameworks, sharpened our focus on accountability, and established clearer oversight mechanisms. The connection between the board and management is more robust and very healthy. Our teams across the business have delivered on the commitments we made to improve customer service standards, operational reliability, and our relationship with our many stakeholders. As a nation, we face an unprecedented complex and fraught strategic and economic international environment. The directions that we thought were broadly clear have been disrupted.
Our world is more volatile, more contested, and more fragmented than when I last stood before you. Technological change is amplifying these threats while also offering unprecedented opportunities. My experience in advising government on economic policy, technology policy, national security, and international affairs, I believe, have been directly relevant as we've navigated this period of internal renewal as well as global geopolitical change. Balancing public policy engagement with commercial imperatives while maintaining social license is really critical to a business like ours, which is so connected to the national conversation. My background and experience are outlined in the annual report and the notice of meeting.
If re-elected, I would continue to bring to your board a strategic focus, governance and financial discipline, experience in transformation, technological and organizational change, and a deep conviction born of experience of the importance of a healthy, inclusive culture and authentic and accountable leadership in organizational success. Looking ahead, I see tremendous opportunity in front of us. We can lead our sector if we continue to make the right decisions and maintain the governance standards, customer focus, and cultural accountability we've worked so hard to revive and embed over the last couple of years. I remain committed to acting independently and delivering sustainable value to you, our shareholders, while also ensuring Qantas continues to serve Australia and the world with the standard it deserves. I thank you for your trust and for considering my nomination today. Thank you.
Thank you, Heather. I now formally propose the following ordinary resolution that Dr. Heather Smith, a non-executive director retiring in accordance with the Qantas Constitution and the ASX listing rules, being eligible, is re-elected as a non-executive director of Qantas Airways Limited. The directors, with Dr. Smith abstaining, unanimously support her election, and we recommend that you vote in favor of this resolution. I'll now take questions on Heather's re-election, starting with those in the room. I think we have a question on microphone number two.
Chairman introduced David Losemoore.
David Losemoore, Australian Shareholders Association. Through you, Chair, I'd like to ask Dr. Smith, what contribution to the company have you made that you're most proud of?
David, I respect the question, but I'm uncomfortable. Sort of seeing the interrogation of any one director on any particular subject. I think Heather Smith is an outstanding director. We are very lucky to have her. We have a rigorous, independent board performance review, as I mentioned, where every director is judged by peers and by independent. I think Heather does an outstanding job. I'm sure you can maybe have a chat with her outside afterwards, but I don't think it's the job of the AGM to get into individual directors' performance.
Thank you.
Are there any other question s? All right. Any from online?
Chair, there is one question online from Mr. Stephen Mayne, who asks, as a member of the Audit and Remuneration Committees and a former long-serving senior public servant in Canberra who is still contracting to the federal government, such as with last year's independent review of Australia's intelligence services, could Dr. Heather Smith, please provide her perspective on how the delicate issue of free or discounted flights for federal politicians and public servants? How does Heather think Chairman's Lounge membership should be and is being handled? Have any changes been made since she joined the board in 2023 and with the 2024 chair succession to John Mullen, particularly after all the media coverage generated by Joe Aston? Also, could John Mullen comment on how he is handling the power of determining who is and isn't gifted a free membership to the Chairman's Lounge?
Thank you, Stephen. I sort of thought you might say something like that, but we're not going there, I'm afraid. I don't think this is appropriate to ask individual directors to comment on benefits of politicians, public servants, or anybody else. We have a fairly transparent and clear policy around Chairman's Lounge, around frequent flyers, status credits, and the like. I think we just like to rely on that framework going forward. I do not think it is appropriate to comment further. Any others?
That concludes the questions online. Thank you.
Very good. Thank you. If there are no further questions, I will then turn to the details of the votes received prior to the meeting. On the screen, you will see the details of the votes received in respect of Heather's re-election. For those voting today, please cast your vote now if you have not already done so. Congratulations, Heather, and we are very lucky to have you on the board. The second director up for re-election this year is Doug Parker, detailed as item 2C in the notice of meeting. Doug was first appointed to the Qantas board in May 2023.
He is a member of the People and Remuneration Committee and a member of the Safety, Health, Environment, and Security Committee. The board believes that Mr. Parker's deep experience in running airlines provides knowledge and perspective that is a significant asset to the board and to Qantas. I would now like to invite Doug to say a few words.
Thank you. It is an honor to be seeking re-election to the Qantas board. Over the past two years, I have been able to witness firsthand the determination and commitment of this board, of Vanessa and her executive team, and most importantly, of the thousands of dedicated Qantas employees who have worked tirelessly on behalf of our customers. I think the progress has been remarkable. As someone who has spent almost 40 years in aviation, I understand the unique challenges that airlines face.
That experience includes more than 20 years as an airline chairman and CEO, including nine years of those as the chairman and CEO of American Airlines. I can tell you that very few carriers, if any, hold the same significance to their country as Qantas does to Australia. It would be a privilege to continue to play a role in its future. I'm committed to continuing this work and seek your support in my re-election of the board. Thanks.
Thank you, Doug. I now formally propose the following ordinary resolution that Doug Parker, a non-executive director retiring in accordance with the Qantas Constitution and ASX listing rules, being eligible, is re-elected as a non-executive director of Qantas Airways Limited. The directors, with Doug abstaining, unanimously support his re-election and recommend that you vote in favor of this resolution. I now take any questions on Doug's re-election, starting with those in the room. I take that as none. Any online?
Chair, there is a question from Mr. Stephen Mayne, who asks, in response to John Mullen's comments earlier in the meeting after shareholder Ang Kinos criticized the board nomination restrictions, it appears our chair is not aware that the Qantas Constitution has a rare board entrenchment provision, which requires external board candidates to be supported by 100 shareholder signatures or 5% of total issued capital just to get on the ballot. This explains why Qantas has never had an external board nominee during its 30 years as a public company. Will the chair undertake to review this provision and propose a constitutional amendment at next year's AGM so that it is like more than 90% of Australian public companies and allows any shareholder to self-nominate for the board?
Was candidate Doug Parker aware of this provision and would he also support a review?
Let me take that one on notice. We will look at that. And we will reach a decision on whether we change our rules accordingly. At this stage, I don't want to commit either way.
Chair, there was a question earlier for Heather, which also applies to Doug, the questions from Mr. Stephen Mayne. Heather was first elected in 2023 for a three-year term. Why is she up today after just two years, and will the chair move to annual elections of directors like he commendably does at Treasury Wine Estates? Annual board elections are best practice and compulsory in the U.K. and U.S. Let's do it.
Okay. Firstly, in case you correct me if I'm wrong here, but. A normal cycle of board election is three years. We also in the Constitution have a rule that at least two directors need to submit themselves for election or re-election every year. As the two longer-serving executives, directors, they were therefore offering themselves after two years instead of three. Once the board settles down, we would hope that that would get into a more regular routine. In terms of annual elections, we look at that all the time. I'm on a board where that is the case. I think in Qantas's case, we need some stability at the moment. We've had two or three very difficult years. Now we have a brand new board lineup, and we have a new management team. I think a bit of stability and predictability for the next few years is going to serve us and the shareholders best. We won't be doing that in the immediate future.
Chair, there are no further questions on this resolution online.
Very good. If there are no further questions, I will turn to the details of the votes received prior to the meeting. On the screen are details of the votes received in respect of Doug's re-election. For those voting today, please cast your vote now if you haven't already done so. Congratulations, Doug. We are very lucky to have you on our board too. Before considering the remuneration-related resolutions, we will hear a few remarks from Dr. Nora Scheinkestel, Chair of the People and Remuneration Committee, on Qantas's approach to remuneration and this year's remuneration report. During her address, Nora will specifically deal with the remuneration-related themes emerging from discussions with shareholders and the questions submitted in advance of this meeting. I would now like to invite Nora to address the meeting.
Thank you, John. Good afternoon, fellow shareholders. My name's Nora Scheinkestel, and I chair the People and Remuneration Committee. John has asked me to speak about the next two resolutions which deal with remuneration. In particular, I'd like to address the remuneration report. That document summarizes the remuneration outcomes for our key management personnel in the last year, namely Vanessa as CEO and the key decision-making members of her executive team, and the non-executive directors on the board. It also makes some observations in relation to the year ahead, which is relevant to the resolution dealing with Vanessa's long-term incentive. Our remuneration framework is designed to support our business objectives. Successful growth aligned with our values, strategy, and risk appetite, meeting customer, employee, and shareholder expectations, and importantly, attracting, motivating, and rewarding our capable management team. Our remuneration outcomes should and do reflect the year we've just had. Strong performance across a balanced scorecard.
As John and Vanessa have noted, the group's financial performance exceeded target and reflected the strength of our dual-brand strategy, strong travel demand across all sectors, and passenger growth. The fleet renewal program has already started to deliver benefits, a great travel experience for our people and our customers, as well as enhancing fuel efficiency and delivering an expanded network. Financial performance counts for 50% of our short-term variable scorecard, and so this resulted in what we call an overdrive outcome. The other components of the short-term scorecard cover customer and people. Operational and workplace safety, and climate. Again, we performed well in all of these categories. Better on-time performance led to improved customer satisfaction. Our people, as you've heard, are more engaged. Safety performance exceeded targets, and we did better than we expected on emissions reductions and waste diversion.
As a result, the total score on the group scorecard was an outcome of 139%. Out of a possible total of 164%. The board then turned its mind to the cyber incident, which John mentioned earlier, which occurred just on the cusp of the new financial year. As he described, and shareholders will be aware, we were one of a group of global companies targeted in a cyber incident, which did involve a significant number of our customers. We do know that the incident caused uncertainty and concern for many of them. While prevention of cyber breaches is what we strive for, the response, when it happens, is as, if not more, important. The information that was accessed, as many of you know, included names, emails, phone numbers, frequent flyer numbers, and in some cases, addresses and meal preferences. We have heard seat preferences as well.
Our system design was effective in that highly sensitive information, such as passport numbers or financial information, such as credit card or bank account numbers, were not accessed. We took immediate steps to further strengthen security and support our customers. Personalized communications occurred to those that were affected. We established a customer helpline, specialist support services, and provided guidance on potential scams. Our management team also quickly engaged with other relevant stakeholders, including government and regulators, and also, as you've heard today, obtained an injunction to prevent the stolen data being accessed or published by anyone, including third parties. When it came to considering how this incident should affect remuneration, Vanessa and her leadership team were proactive in saying that they believed there should be an adjustment given the number of customers that were affected. Further, they wanted the executive team as a whole to accept collective responsibility.
The board agreed, but also believed that we should take into account the exemplary way that the team had responded with our customers, with regulators, and with government. We looked at other incidents of major cyber breaches and how they had been dealt with, including the nature of the information accessed and the response of management. We also looked at the nature of the responsibility of the CEO and the executives concerned, which in this situation was that of ultimate accountability, captain of the ship. When all of these elements were brought together, the board's decision was to reduce the group scorecard outcome by 15 percentage points to 124%. We think this represents a material reduction, but also recognizes the good work that was done in response.
We also thought that the adjustment had to be considered within and proportionate to the context of a balanced scorecard in a year where management had performed well across all the areas where we had asked them to. Financial, customer, employee, safety, and sustainability measures. Work is ongoing in relation to the cyber incident. The outcome of some of those investigations may not be known for some time, but we think it is important, both for our executives and for our other stakeholders, to determine remuneration consequences for issues in the year in which they occur, provided we feel we have sufficient information. Should there be any material new adverse developments in the year ahead, these will, of course, be considered in due course.
In much the same way, the board also considered whether any further adjustments should be made this year to reflect the penalty outcome on the ground handlers' outsourcing case, which was handed down in August. I'll join with Vanessa and John in their statements that we deeply regret the impact on our former employees of losing their jobs, and we acknowledge the significant reputation and financial impact of that legal process on our stakeholders. We did take this fully into account last year when we conducted a detailed review of accountability for these and other events. The range of penalty outcomes was known at the time, as well as estimates of the compensation likely to be payable. As you will be aware, this led to the forfeiture of what, at the time, equated to almost AUD 9 million.
In long-term incentive equity awards for the former CEO and a 33% reduction in short-term equity outcomes for the former CEO and accountable executives, totaling just over AUD 4 million. Justice Lee's judgment contained some pretty strong messages which were tough to read. They related both to the conduct of the matter in the past, which was taken into account in our deliberations last year, as well as querying whether the culture had changed at Qantas. As John has outlined, we believe that the culture has fundamentally changed and that the matter would be dealt with differently by the Qantas of today. For the board, therefore, the question was.
Whether there was anything either in the quantum of the penalty or the observations made that warranted us reopening the decisions of last year and further penalizing the current executive team, many of whom were either not at Qantas or not in their current jobs when these events occurred. We concluded that the penalty was within the expected range and that there was no new information about the current team that merited a further adjustment. We believe that in the absence of new material adverse information, that it is important to provide certainty both to our people and to shareholders so that the ongoing team can be fully focused on the future. Let me turn back to this year. On the long-term incentive plan, the 2023- 2025 plan fully vested, given that we ranked third amongst our global airline group.
Eighth on the ASX 100, reflecting a 119% shareholder return over this period. We continue to benchmark and review our remuneration framework to ensure that it meets our objectives. We are proposing a few changes in the year ahead. More details are set out in the remuneration report, but I will highlight just two changes that we are making. First, we believe that the mix of remuneration for both the CEO and the executive team was skewed towards the short term. We have increased the percentage opportunity for the long-term incentive. Secondly, we have also increased the minimum shareholding requirement for our executives from 75%- 100% of base pay. We believe both these changes will further strengthen alignment with shareholders' experience.
We will continue to focus on making our remuneration structure drive sustainable long-term value creation while ensuring that the needs of all our stakeholders are appropriately met. We recommend that you support the readoption of the remuneration report. John and I would be happy to answer any questions you may have. Thank you.
Great. Thanks very much, Laura. The next item of business, therefore, is to consider the proposed award of rights to your CEO, Vanessa Hudson, under the group's long-term incentive plan. I would like to reiterate an important point of the operation of the plan, being that the rights awarded will only vest and convert to shares if the respective performance conditions are fully achieved. For the long-term incentive plan, rights to vest in full at the end of the three-year performance period.
Our total shareholder return needs to outperform 75% of the companies in the ASX 100, as well as 75% of the global airlines peer group. Qantas' reputation performance score needs to be above excellent under the RepTrak methodology. Should all three of these performance conditions be achieved, the rights will vest and convert to Qantas shares on a one-for-one basis. These shares would then be subject to an additional one-year holding lock. If the performance conditions are not achieved, the rights lapse and no shares are awarded. I now formally propose the following ordinary resolution: that Vanessa Hudson, the Chief Executive Officer of Qantas Airways Limited, is permitted to participate in the long-term incentive plan as contemplated by the explanatory notes accompanying the 2025 notice of meeting. The directors, with Vanessa abstaining, recommend that you vote in favor of this ordinary resolution.
I'll now take questions on this item. Microphone number one, please.
Chair, may I please introduce Malco lm Fraser.
Thank you very much. I noted what the previous speaker said. Sorry, I've forgotten her name.
Nora.
Very sorry.
Nora Scheinkestel.
Nora Scheinkestel. Very, very encouraging. I would like to talk just briefly about fairness and remuneration, including things like long-term incentives in general. Is that okay to speak just now?
Yes. Fine.
Oh, great. Thanks. My wife and I together hold slightly more than 25,000 Qantas shares, and we're very proud to do that. Many, sorry, back in 1998, we were thinking that the company was facing stiff competition. So I decided, with my wife's support, to actually volunteer for a pay freeze. That went on for eight years. The details of this in the 2023 AGM video.
Now, fairness is at the heart of this company, and I feel that the remuneration spectrum is something like more than half our workforce, more than half our workforce earn AUD 100,000 or less a year, and a small percentage of our workforce earn above AUD 300,000 a year. Of course, there are a smaller group, including senior executive salaries, who earn even more. Now, as a shareholder, I appreciate all that the executives have done. There is the rising share value, which is really fantastic. There is the hard work that goes into it, the group leadership team contributing to that. I feel an example of leadership also sets a responsibility for the executives to even consider this, to forego their bonuses. The long-term incentive and short-term incentive, I think, are secondary to the satisfaction you get for doing the job.
If such a renouncing of bonuses was made, I feel this would enable the upper levels of the company to identify more strongly with the Qantas family as a whole. It would send a powerful message of fairness and shared effort, which is central to the organization. We are a nation of volunteers, so I would suggest that any such renouncement would be based on a volunteered consideration and take into account actual circumstances. We are a nation of volunteers, such as surf lifesaving, volunteer firefighters, SES, and so forth. I think it's all part of being the spirit of Australia. Thank you.
Thank you. Look, I think we all appreciate that remuneration can be and is an emotional subject for many. As a board, we have to look at how do we. Preserve the strength of our company, how do we make sure it prospers in the future. Attracting high-quality executives is a big part of that. Attracting high-quality executives these days is an international undertaking, just as airlines are international. We benchmark and review our remuneration against other airlines, against other companies in the ASX. We try to make sure that our remuneration structure is fit for purpose and encourages and retains, encourages the hiring and retains the most talented executives. They are all free will. None of them are obliged to work at Qantas. I am firmly convinced that without a team of this strength, Qantas would not be doing as well as it is doing, and we would not be delivering value to the shareholders that this management team has delivered over this last year or two.
I think also we should remember that the variable part of compensation is linked to results. It's not just a bonus or feel good. It's all linked to a specific objective, and all of those objectives, in turn, deliver shareholder value. If the management does not deliver on those benefits, then they don't get the remuneration, the variable remuneration. I think you saw, I wasn't here, but you saw during COVID, there were a lot of cuts taken by management, just as they were by the workforce. We're never going to please everybody, but I think we've got the balance about right, and we take it very seriously. Thank you. Spiro, I see you're itching to go to the microphone.
No? No. No.
Okay. I think that is the end of the questions in the room. Are there any questions online?
Chair, there are no questions on this resolution.
Very good. If there are no further questions, I will turn to the details of the votes received prior to the meeting. On the screen are the details of the votes received in respect of the allocation of rights to the CEO under the long-term incentive plan. As outlined in the notice of meeting, Qantas will disregard any votes cast on this resolution by or on behalf of Vanessa, her associates, and closely related parties, except as directed by any proxies. Proxy votes cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chair of this meeting, I intend to vote all undirected proxies in favor of this resolution. For those voting today, please cast your vote now if you haven't already done so. Thank you.
We will now move on to the next item of business. The next item is to consider an advisory resolution to approve the remuneration report to which Nora just spoke before me. The remuneration decisions made by the board during the year were outlined by Nora, and they're also detailed in the remuneration report. I now formally propose the following advisory resolution: that the remuneration report for the year ended 30th of June, 2025, as set out in the director's report, is adopted. The directors recommend that you vote in favor of this advisory resolution, and I will now take any questions on this item. Starting with the room, any questions, further questions from the room? I take that as a no. Oh, sorry, Spiro.
Chair may introduce Spiro Agoutsis.
Spiro Agoutsis, Chairman. I just. Remiss of me to just point out which w e're here is that through Vanessa Hudson's stewardship and leadership as CEO, that the share price has doubled in the time of her tenure. I think that's got to be congratulated. We might get a few little peeks and troughs. Join me in a round of applause, please. It's very easy to pick on things, but we've also got to remember that if the shareholders are here today. You want to make sure that, hey, here it is, the share price has doubled, so that's got to be congratulated. Thank you.
Thanks, Spiro. Yeah, thank you very much. We're very lucky to have the management team we do. No more other questions in the room? Any online, Alex?
Chair, the first question is from Mr. Kelwin Edward Allis, who asks, how do you justify the pay and benefits provided to Qantas executives?
I think I largely answered that just now, but again, I would just reiterate. We have to attract the very best talent and retain that talent from all around the world to ensure that your company delivers the shareholder returns that you expect. We benchmark it with best practice, and we make sure we're not being over the top, but equally, it's very short-sighted not to try and pay the appropriate remuneration to attract the level of talent that we do. Any others?
Chair, the next question is from Mr. Stephen Mayne, who asks. Retail shareholder participation rates at AGMs keep falling, particularly after COVID expedited the shift from paper to online. Thank you for disclosing the headcount data in your poll results at the last two AGMs, and will you be continuing with this practice today, particularly on this remuneration report item, which is normally the one retail shareholders most often vote against? Because of this voluntary disclosure, we know that only 1,566 of the 150,699 Qantas shareholders voted on the election of our new chair, John Mullen, at last year's AGM. That's only 1.04%. In federal elections, voter participation is above 90%. How do we fix the crisis of retail shareholder non-participation, and what did you do for this meeting to try and encourage more shareholders to vote? If 99% of shareholders haven't voted again this year, will you step up the communications to try and achieve a 2% turnout next year?
Stephen, this is one where I have to say I agree with you, but it's a very difficult issue to solve. Your 1% is the number of physical shareholders, not the number of votes. The number of shares being voted is nearer to 70%. Of course, the large institutions are the major owners of those shares, and hence their vote is always going to dominate over any small individual shareholder. The whole purpose of today and an AGM like this, though, is to give the retail shareholder a voice and give you a chance to express your views. One of the reasons that we continue to hold them is without them, we don't think retail shareholders would have any vote at all or any say at all in the running of their company. We continue to do that.
Whether we can get the numbers up to 2%. Maybe we need to provide a better lunch or something, but. I would love to see more retail shareholders here, and I would love to be able to discuss. All these sort of issues with more retail shareholders. One of the reasons that we do not, I think we referred to it, we do not put the votes up on the screen before the voting is closed. It is simply because we do not want to discourage the retail shareholder. So what is the point of my voting? There is already 90% vote from the big institutions. For that reason, we hold that back until you have all had a chance to have your say and to vote. Stephen, I totally agree with you, and we will certainly do our best to make these meetings as appealing to retail shareholders as we can in the future.
We have a question on microphone number one.
Chair, may I please introduce Mr. Chris Maxworthy?
Thank you, Chair. Look, to your last point, too much. Okay. To your last point, could I offer a suggestion? For me, as a retail shareholder, one of 300,000 that hold shares in Qantas of less than 10,000, could I offer the suggestion that rather than a proxy is giving an option to offer their vote for the chair and the board to decide, because that's one of the proxy options, that perhaps, look, I'm not here in an official capacity, but I'm an Australian Shareholder Association member, perhaps the board might consider to make it open to a more representative group of retail shareholders, such therefore that people feel as though they can give their proxy to a group that exercises responsibility, interest in.
The rights of retail shareholders, and particularly where, as you say, you've got 70% of the shareholding voted by the institutions or their proxies. We little people don't really get a look in. I think that, for instance, the ASA, when they have their meetings with each of the boards in the lead-up to the AGM, are a very useful and coherent voice for the retail end of the Australian equities market.
Okay. Thanks, Chris, again. Look, it's obviously a difficult one. I mean, it's simple mathematics. If I have one share and you have 100%, you're going to outvote me. There's not much that I can do about that or we can do about the system. The votes to the proxies that are given to the board of management are actually very few. The vast majority of that 70% you see that's voted are coming directly from institutions or their proxies directly. While it's a nice idea maybe to consider, I don't think it would actually change the outcome. Also remember, as a board, it's our job to represent the interests of all shareholders. We try to weigh up. When we put a resolution forward, we wouldn't put it forward if we didn't believe in it. We try to weigh up whether that's in the interest of everybody, whether it's institutional with millions of shares or whether it's an individual with 10 shares. Again, I hear you, and I hear Stephen Mayne, but it's very hard to see what practically we can do to make it better other than to encourage you to come to these meetings and have your say. Thank you, Chris.
No more in the room? Any more online?
Chair, there are no further questions on this resolution.
Great. Thank you. If there are no further questions, then I will turn to the details of the votes received prior to the meeting on this item. On the screen are the details of the votes received in advance in respect of the resolution. Qantas will disregard any votes cast on this resolution by or on behalf of key management personnel, whose remuneration is detailed in the remuneration report, and their closely related parties, except if cast as a proxy and the votes are directed. As Chair of this meeting, I intend to vote all undirected proxies in favor of this advisory resolution, Chris. For those voting today, please cast your vote now if you haven't already done so. Great.
All resolutions have now been dealt with, which concludes the formal business of this meeting. I therefore now declare this meeting closed. Shareholders and proxy holders will have five minutes from now to complete their voting via the online platform. Once all votes have been accounted for and verified by the share registry, the results of the AGM will be lodged with the ASX as soon as possible, which we expect will be later this afternoon. On behalf of the board, I thank you all again for your ongoing support and for joining us today at the Qantas 2025 annual general meeting. For those here in person, I hope you'll join the board and me for some light refreshments out in the foyer. May I lastly thank the organizers of the team who've made all this happen. We really appreciate all the work you've done to make this a smooth event. Thank you all.