Good morning and welcome to those of you participating online to the 2020 Qantas Annual General Meeting. This year's AGM is unlike any in Qantas' 100-year history. Due to the impacts of COVID-19 and the associated physical gathering and travel restrictions, it is being held virtually for the first time. I'm chairing this meeting from Western Australia, which frustratingly plans to keep its borders closed for some time despite very low levels of risk in every other state. Hopefully, common sense prevails soon. The AGM is an important event for Qantas and one that the board looks forward to every year. We thank you for tuning in. On behalf of the board, I wish to acknowledge the Whadjuk Noongar people, the traditional owners of the land I am on here in Perth, and pay my respects to their elders past, present, and emerging.
This meeting is held via video and teleconferencing technologies. Shareholders have the opportunity to participate by voting, which I will explain how to do later, and by submitting questions via the virtual meeting platform. Shareholders are encouraged to start sending in questions now by clicking the Ask a Question box on your screen, typing your question, and clicking Submit. Please note that this function has a limit of 512 characters. We will then address these as we get to the relevant item of business. We'll try to ensure that all topics of interest are addressed in our responses. Questions submitted online will be moderated and may be amalgamated if there are multiple questions on the same topic. If we experience any significant technical issues today, we may take a short recess or adjourn the meeting until 3:00 P.M. Sydney time today.
If this occurs, I'll advise you accordingly to the extent possible, and an ASX announcement will be made. In the event that I solely encounter any technical issues here from Perth, I have asked Barbara Ward to take the chair from our Mascot head office in Sydney. Before we start, let me introduce your directors, who along with myself are currently spread across Australia and overseas due to the current domestic and international border restrictions. Appropriately distanced at our Mascot head office in Sydney from left to right on screen, we have Belinda Hutchinson, Maxine Brenner, our Chief Executive Alan Joyce, our Group General Counsel and Company Secretary Andrew Finch, Barbara Ward, Chairman of the Audit Committee, and Todd Sampson.
On a conference line and joining us via webcast, we have Paul Rayner, who chairs our Remuneration Committee, Tony Tyler, Chair of the Safety, Health, Environment, and Security Committee, Jackie Hey, and Michael L'Estrange. We'll hear a brief message from Maxine, Jackie, and Michael later in the meeting as they seek re-election. Also present on the call is Andrew Yates and Caoimhe Toouli, the Senior KPMG Audit Partners, who are available to answer any specific question you may have about the conduct of the audit. I confirm that a quorum is present as a result of the proxies I hold, and I formally declare the meeting open. A lot of work, but needless to say, it's not as good as being in the same room. It's also a symptom of the travel restrictions and border closures that continue to have a huge impact on the Qantas Group.
Aviation is about bringing people together, and it's the one thing that the health response to COVID aims to avoid. As shareholders, you'll all be aware, Australia has done a tremendous job at managing this virus, especially when you look at other parts of the world, and in most states, we're evolving how to reopen our economy and communities in a COVID-safe way. This is one of several sources of optimism we have about the Qantas Group's future, which I'll expand on shortly, but it's important to briefly reflect on recent events. Broadly speaking, the sudden impact of the COVID crisis saw our strong profit from the first half of the year unwind very quickly as travel demand evaporated. By late March, cascading domestic and international border closures made clear that most flying would have to cease. Revenue in the fourth quarter fell by $ 4 billion.
We were, quite frankly, in survival mode. Alan and the management team took immediate action to safeguard the future of the company. That meant putting most of our operations into hibernation to avoid burning through available cash. And it meant developing a plan to recover from a crisis of unknown duration. When you're managing a lot of unknowns like this, the key is liquidity and the ability to fund your operations. Since March, we've raised over$ 2 billion in secured and unsecured debt. As shareholders, it's important for you to know that few airlines have the access to debt markets that Qantas has, let alone at the interest rates we can achieve. That's a result of the strong shape the company was in when the crisis started and the market's view on our future. In addition to debt, we secured $ 1.4 billion through our first equity raising in a decade.
I'd like to thank shareholders for their support of this raising, which will help power our recovery. Guaranteeing our survival has meant some. Has already announced more than 6,000 people will leave the business, with a review of another 2,000-plus roles. Around 18,000 of our people remain stood down. Many regard Qantas or Qantas Link or Jetstar as not just their employer but a second family. I want to pay particular tribute to those who have left after many years, sometimes decades, of loyal service to the national carrier. Can I also say that the Qantas Group is in a position where we can survive, recover, and ultimately grow again. They are about preserving as many jobs as possible in the long term. Key to the recovery from this crisis for Qantas and for much of the economy is our borders.
In July, we had a significant setback when other states closed their borders in response to Victoria's second wave. Alan will talk about the impact of that in more detail. In the past month, we've seen some positive signs of a fresh recovery. South Australia, Northern Territory, and Tasmania have opened their borders to most states. But even as numbers in Victoria come under control and New South Wales shows how small clusters can be managed, there is some frustrating inertia around the Queensland and Western Australian borders. This inertia doesn't seem to be based on the actual health risk, and that seems to ignore the broader economic and social risk involved with staying shut, especially as federal income support winds down. By contrast, the lifting of some restrictions with New Zealand is very encouraging. So too is the potential for travel bubbles with parts of Asia.
Both Qantas and Jetstar are keeping a close eye on new markets that might open up as a result of these bubbles, including places that weren't part of our pre-COVID network. By early next year, we may find that Korea, Taiwan, and various islands in the Pacific are top Qantas destinations while we wait for our core international markets like the U.S. and U.K. to reopen. We're already doing this domestically, adding new destinations that suddenly make sense, and it's the kind of flexibility we need to make the most of where we need to make the most of any cash-positive opportunities in the year ahead. Of course, opening up our borders has to be done with care. That is certainly a focus for the Qantas Group as we return to the skies.
Safety is always our number one priority, and this now includes our Fly Well program introduced back in May. It involves masks, increased sanitizing, and reduced contact points throughout the journey so that we can protect our customers and our crew. Turning to your board, shortly, we'll be asking you to vote on the re-election of three directors. I want to acknowledge two long-serving directors who will retire before the next AGM. Barbara Ward and Paul Rayner have been on the Qantas board since 2008. They've helped guide a huge amount of transformation over that time, which is a key reason why the group can weather this current storm. We'll have an opportunity to thank them properly down the track, but on behalf of the entire group, I want to recognize Barbara and Paul for their tremendous contribution.
We have no plans to appoint new directors in their place, meaning the board will reduce by 20% next year from 10 members to eight. We consider this appropriate under the circumstances when the company is scaling back at all levels. One phrase I've heard a lot since joining the board is that Qantas always shines in a crisis. At an operational level, we've seen over 100 repatriation missions to bring Australians home from COVID hotspots around the world. The latest one from London is due to land shortly. All flown by crew who volunteer, all handled extremely safely, the national carrier at its absolute best. At a management level, we've seen decisive action to handle a crisis that unfolded with incredible speed.
That has combined with years of careful management of the balance sheet to put your company in probably the best position of any major carrier in the world to recover. Ultimately, the pace of that recovery is uncertain. But we have a plan to guide us, guide us back to profit, back to growth, and back to sharing the benefits of all that with our customers, shareholders, and people. All the things we were doing before the pandemic struck, and we have a track record of delivering. As your Chairman, I thank you for your ongoing support of the Qantas Group during this most difficult time. I know the board joins me in thanking Alan and the Group Management Committee for their effort, passion, and diligence this year. I'll now invite Alan to say a few words.
Richard, can I say thank you for those very kind words on behalf of the management? Can I also start by acknowledging the traditional owners of the land in which we meet and here in Mascot, that is, the Gadigal people of the Eora Nation? I pay my respects to their elders past, present, and emerging. COVID has meant a sudden reversal of fortune for many companies and virtually every airline, including the Qantas Group. At the start of the year, we were on track for another strong profit. Dividends were set to increase. We were hiring people and getting ready for new aircraft to arrive this year and getting ready to order aircraft for Project Sunrise, or a great project to fly from the east coast of Australia direct to London and New York.
We're looking forward to celebrating 100 years of this great company, the oldest continuous operating airline on the globe. Instead, we're dealing with the worst trading conditions in that long history. Instead, we're dealing with the aviation we have ever faced. As Richard mentioned, we've had to make tough decisions to make sure that we survive. What has become crystal clear is that the Qantas Group after COVID has to be structurally different to the Qantas Group before recession. That has implications for consumer confidence and spending. We know that the domestic market will be extremely competitive. Virgin will come out of administration with a leaner, meaner cost base, and Rex will be starting on the trunk markets, and we know that our revenue will be significantly lower for some time, especially with the continued grounding of our international operations.
And we all know that the only antidote when you're faced with less revenue is to lower your costs. We have identified $ 15 billion in cost savings over the next three years, mostly through reduced flying activity. We're also targeting $ 1 billion in ongoing cost improvements by financial year 2023. The $ 1 billion in savings are front-end loaded, with $ 600 million due to be unlocked in this financial. Has been very strong, with the A321 program about halfway through. In addition to the job losses we've announced, also a review of our property footprint in order to consolidate that footprint. We've stopped the Qantas Wallabies because we really can't justify that while the majority of our people. We are renegotiating our arrangement with travel agents and making really good progress on this. Opportunities for the trade and significantly reduce our cost of sale.
Reviewing our ground handling operations with a view to saving up to $ 100 million a year. These are the kind of changes, the kind of reinvention we need when I had to say as the global travel demand is expected to take at least four years. As we move towards the half year, I want to touch briefly on how some of our key segments are performing. The unexpected closure of several domestic borders in July has meant that our recovery has been delayed. We had expected that group domestic capacity would be at 60% of pre-COVID levels at this stage. Instead, the continued border closures mean that capacity is just below 30% of pre-COVID levels. This delay has resulted in a $ 100 million negative impact on earnings in the first quarter of financial year 2021, and it will have an impact on quarter two of the same financial year.
Essentially, this is a timing issue. We know that the upswing will materialize just later than we had planned. Importantly, we have the liquidity to manage this, and because our cash flow from continued operations is positive before one-offs like redundancies, we could continue at this level of flying for a very, very long time if we had to, but we don't expect that to be the case. Our three-year recovery plan remains on track, helped by the rapid progress on structural cost reductions, and as Richard mentioned, there are plenty of positive signs on borders. Assuming Queensland opens to New South Wales in the forthcoming weeks, we expect that group domestic capacity will reach 50% by Christmas. We know that there is latent demand for those capacity and that operation.
We saw that with our scenic flights earlier this month, the flights up the east coast of Australia over the Barrier Reef and to Uluru on a 787. They sold out in 10 minutes. We also saw it when South Australia opened to New South Wales, with 20,000 seats selling across Qantas and Jetstar in less than 36 hours. With most international travel off limits for a while, we're expecting to see a boom in domestic tourism once borders open up. In fact, before COVID, over 11 million Australians traveled overseas each year. That would be a substantial increase in domestic travel if they convert in the short term to domestic tourism, and the group is well positioned to make the most of that opportunity.
In fact, over time, our domestic market share is likely to increase organically from around 60% before COVID to around 70% as our main competitor changes its strategy. It hands back aircraft. It closes down Tigerair. And when international travel does eventually return, our market share is also expected to grow as overseas carriers take, we believe, a conservative approach to capacity and focus on opportunities closer to the home markets. There are two standout performers in the Qantas Group, and they are Qantas Loyalty and Qantas Freight. Their contribution has been key to our ongoing operations and Qantas Loyalty profit slipped less than 10% in financial year 2020, which is truly remarkable under the circumstances.
It reflects the fact that the majority of points are earned on the ground and the fact that border closures have only increased people's desire to earn points for travel once the borders open up again. Loyalty's performance also reflects the benefits of the diversification program that we've introduced in the last decade. For instance, Qantas Wine has seen record sales, with sales up 75% in July and August compared to the prior year. And since the start of the year, we've added new partners like BP Fuel and Afterpay, both of which are performing well above our expectations for both projects. All of this has combined to create record levels of member satisfaction, which will be the core strength in increasingly competitive domestic market. In fact, we believe that Qantas Loyalty is such a unique asset, it is not replicated in any airline around the globe.
Meanwhile, Qantas Freight has benefited from the shift to e-commerce. It's seen levels of regular activity more in line with Christmas, which is a massive peak in recent months. Some of this is obviously temporary, but Australia Post, our main partner in this area, believes the shift to online shopping has been permanently accelerated and freight volumes will be significantly higher going forward, which is a great sign for our exclusive seven-year partnership with Australia Post. At the end of this month, we take delivery of our first of three A321 freighters. These aircraft have 60% more capacity than the 737 freighters they replace, are more fuel efficient, and cost less to maintain as the younger aircraft, which should improve the cash performance of freight even further in the next year.
While we are clearly faced, there are some bright spots in our portfolio that will assist in the recovery. I want to now acknowledge the support of several key stakeholders. Firstly, our people. As Richard mentioned, we're acutely aware of the impact the crisis has had on the 30,000 individuals across the group. Most are stood down with no clear timeline for when their careers will resume. Thousands will lose their job altogether. I've personally said goodbye to people that have worked for the company 20, 30, 40 years, people that were performing amazingly in their jobs. And truly, no fault of their own or the company, we had to let them go. It is truly heartbreaking to see so many great people leave the company.
One source of hope that I have, and I think a lot of our people are seeing, is the stories from employers who are taking Qantas or Jetstar people into their employment, either permanently or during stand-downs. They show and reflect the great set of skills that these people have and how great ambassadors they have been for the Qantas brand. Can I also recognize our loyal customers? The messages of support and enthusiasm to fly again with us have been overwhelming and been exceptional. We've also had tremendous support and understanding from our major suppliers. They've given us a level of flexibility that is helping us get through these challenging times, and I also want to thank you, our shareholders, for the support that you've given, particularly during the capital raising, which has allowed us to have the financial strength to do the significant company in the long run.
And finally, can I acknowledge the federal government for the support to the entire aviation industry, which is what we've always asked for, and in particular, the JobKeeper program, which has been critical for our people during stand-down. And we also applaud their ability to underwrite some of the flying, including the repatriation flights that are taking Aussies home for Christmas, one of which, as Richard said, will land in the next couple of hours. In conclusion, there is no doubt we're in the middle of the toughest period the national carrier has ever faced. But we entered this crisis in a strong position and have plenty of reasons to be confident, including our liquidity and significant base of unencumbered assets, including the progress on our transformation program, and including the clear signs of very strong domestic travel demand.
We will come through this crisis more efficient and more focused, ready to take advantage of the opportunities on the other side. With your continued support, we look forward to embarking on the next 100 years of the remarkable, the exceptional Qantas story. Thank you.
Thank you, Alan. Now we'll turn to the formal business of the meeting, and I'll 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 vote or ask questions. Following consideration of the report, I will turn to general questions. As advised, shareholders are able to ask questions via the online platform by clicking the Ask a Question box on your screen, typing your question, and clicking Submit.
In order to allow as many shareholders as possible to participate, please keep your questions concise and in a limit of two per shareholder. Again, please note that this function has a limit of 512 characters. Questions that are relevant to the business of the meeting will be read aloud to me by a Qantas staff member. We may amalgamate questions if there are multiple questions on the same topic. We'll save answering questions specific to the resolutions until the relevant time. I'll now summarize voting procedures. All items of business will be voted on by a poll, which I now declare open. If you did not cast your vote prior to the meeting, you may cast a live vote using the online platform. Please click Get a Voting Card and follow the prompts.
You may cast your live vote at any time during the meeting. Live voting on the platform will close five minutes after the close of the meeting, and I'll give you a warning when this five-minute period starts. At the conclusion of the AGM, you will see a red bar appear at the top of the online platform with a countdown timer of the remaining time to cast your vote. I confirm that where undirected proxies have been given to me as chairman, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display the proxy votes received prior to the meeting on each resolution. The final results will be lodged with the ASX as soon as they're available later this afternoon. If you experience any difficulties using the online platform, the helpline is displayed at the top of the page.
If we experience significant technical difficulties during the AGM, we'll adjourn the meeting, and as I said earlier, if this occurs, a market announcement will be made as soon as possible. Shareholders, proxy holders, and guests who have registered to watch the meeting will be notified by text. Link Market Services is the returning officer for this meeting. Before turning to the first item of business, I'd like to address two questions that were common themes in the questions we received in advance from shareholders. The first relates to the group's ground handling operations and, in particular, a proposal by Qantas to outsource this function in the ports where it isn't already managed by third-party providers. As you've heard in our opening remarks, the COVID-19 is the greatest challenge the global aviation industry has ever seen. It means airlines have had to make fundamental changes to their operations.
In Qantas's case, the crisis meant a shift from hiring new people into ground services at the start of the year and preparing to buy new equipment to announcing a proposal to outsource the remaining work that is still done in-house to specialist ground handling providers. In Jetstar's case, it meant making a decision to outsource this work. Outsourcing the work at the remaining 11 airports has three main and significant benefits. It would significantly reduce the overall cost of our ground handling operations, about $ 100 million a year for Qantas alone, based on pre-COVID flying activity. It would avoid a large spending on heavy equipment, around $ 100 million over five years, and it would match our ground handling services with fluctuating levels of demand. In this environment, these benefits cannot be ignored.
Qantas is currently partway through a process to review external suppliers and an in-house bid from employees, which will need to meet the benefits that can be achieved from outsourcing this work. If Qantas proceeds with the proposal, it would mean an additional 2,000 employees would leave the business. This is extremely difficult for those employees and their families. Through no fault of their own, they may lose their job, just as more than 6,000 other Qantas and Jetstar employees have. The Transport Workers Union has been extremely vocal about Qantas' outsourcing proposal, and frankly, they wouldn't be doing their job as a union if they weren't, but they've also been extremely misleading, and they're overlooking the fact that COVID has decimated airlines, and things need to change. I'd like to take this opportunity to address two of these incorrect claims directly for the benefit of shareholders.
Firstly, the union claimed these specialist ground handlers are unsafe. This is not true, and the data proves it's not true. These ground handlers already safely and reliably support Qantas and Jetstar's operations at 55 airports around the country. Analysis of safety reports over the past two years show that external ground handlers working for the Qantas Group are no less safe, and in some cases, their safety performance is better. Take aircraft loading, for example, which is a core part of what ground handlers do. An average of 0.4 aircraft damage events per 1,000 flights for outsourced operations compared with 0.8 for Qantas staff ports. Outsourced ground handlers are required to abide by all Qantas Group policies and operational procedures, including our safety management system.
The group's use of outsourced providers is assessed by Australian regulator CASA, and our ongoing international accreditation through a global body, IATA, requires effective oversight of outsourced ground handling. Just this month, Qantas had an IATA assessment of our operations that made no adverse findings. We also conduct audits of all ground handlers on their safety performance, including injury rates. Secondly, the union claims that Qantas' proposal is really being made to lower workers' wages and conditions. This is not true. As has been said many times, this is not about hourly rates of pay, but overall efficiencies. These specialist ground handlers charge on a per-aircraft turn basis, which costs around 40% less than doing the work in-house. This is due to their economies of scale and the fact that they can spread overheads and equipment costs over many airlines.
One ground handler does this work at over 300 airports worldwide. Finally, the significance of the proposal to outsource this work is not lost on any of us, and we appreciate how difficult this would be for these affected employees, most of whom have been stood down for months. Should the decision be made to outsource this work, support will be provided, including help to transition into new roles outside the business and potentially outside the industry. Turning to the second issue I'd like to address, the level of government assistance received by the Qantas Group and how much went to our people compared with how much was kept by the company. Let me start by acknowledging the federal government's support. As Alan said, they were very quick to recognize the impact of travel restrictions on aviation and responded with industry-wide assistance.
The lion's share of government support we've received has been through JobKeeper, which has been a lifeline for our employees who were stood down. As one of the most heavily impacted companies, $ 6 million to date in JobKeeper, the majority of which was paid directly to employees on stand-down. The rest was used to subsidize wages of those still working. We're very grateful for it. The other major government support package saw Qantas and Jetstar operate international, domestic, and regional flights, as well as some freight services, to maintain critical links that had been made commercially unviable by COVID-related travel restrictions. These flights were operated on a fee-for-service basis, with revenue offsetting the ultimate cost to the taxpayer. We operated more than 100 international repatriation flights on the government's behalf and last week announced additional services from London, Delhi, and Johannesburg.
In fact, as Alan and I have both mentioned, the first of these flights carrying over 170 Australians back from London is due to touch down in Darwin shortly. The international freight network has also been extended. The cash inflow associated with all this activity and support has been significant. To date, it is $ 786 million. But with most of this paid directly to our people as part of JobKeeper and used to provide passenger and freight services, a very small amount has flowed to our bottom line. To date, it's approximately $ 17 million. It's worth addressing the suggestion made by some unions that Qantas should give back all of the assistance it has received, chiefly because we are considering the outsourcing of ground handling. This frankly makes no sense. The majority of the money went directly to our people, most of whom were stood down.
Are the unions saying we should claw this back? The rest was used to maintain critical domestic and international links, which in turn generated paid work for our people. Should we claw this back as well? As I said, this makes no sense. Now turning to the first item of formal business for this meeting, which is to consider the reports contained in the 2020 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's 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 June 2020.
Shortly, I'd like to take any general questions or comments about the reports or any other general matters. As stated earlier, Andrew Yates and Caoimhe Toouli from KPMG are available to answer any specific questions you may have about the conduct of the audit. I'll now take questions from shareholders on the financial statements, the Qantas Group performance over the last year, the director's report, or the auditor's report.
Chairman, we have a question from McMahon Family Investments. When is general overseas travel likely to resume? How will it be different pre-COVID?
Thanks, Jack. Yeah, that's a question a lot of shareholders and indeed a lot of Australians will want to know the answer for, so I'll pass that one on to Alan.
Thanks, Richard. And unfortunately, it's going to take some time for us to recover international travel back to where it was pre-COVID.
And you can see that in some of the decisions we've had to make. We've had the early retirement of the 747s, and we've put the A380s in long-term storage in the Mojave Desert. In fact, they're heartbreaking. We're putting brand new product on the A380s, and an aircraft with brand new seats was flown directly from Germany to the desert for storage, and they'll be there for what we think will be some years. But in the short term and the medium term, there's opportunities for us to build international load. We talked about the repatriation flight that's taking place as we speak. That's the first international long-haul flight that we've done since the 8th of June. We have eight of them in total with the government in India and in Johannesburg in South Africa.
And we're hoping, given the demand for these services, that there will be more of them before Christmas to get as many Aussies home as we can. We also are seeing potential for travel bubbles. And last Friday, we started operations to New Zealand again. Unfortunately, the travel bubble is in one direction, so you still have to go to quarantine if you went to the New Zealand market. That has had a significant dampening effect on the demand on those routes. But we are hopeful that that travel bubble will go in both directions. And the New Zealand market is a huge market. It's the second largest tourism into Australia, and Aussies are the largest tourism group into New Zealand.
In fact, if we can get New Zealand Trans-Tasman services back to pre-COVID levels, which we believe we could with a two-way bubble, it represents approximately 20% the size of our domestic operation. We also see other travel bubbles as opportunities once we prove New Zealand works. Richard mentioned destinations potentially like Korea, Taiwan, Japan, and Singapore. There'll be some markets there that we haven't operated on for a long time, but if travel bubbles were to come along, you could see Qantas operations to places like Korea because we will take the opportunity to use our assets on markets like that. Unfortunately, for some of our big destinations like the United States and the U.K., it's going to need a vaccine given the high prevalence of the virus in both of those locations.
But we are getting more and more confident about the opportunities and the potential for a vaccine helping get those operations up potentially by the end of 2021. And in the longer term, there will be opportunities for the Qantas Group. We will come out of this, we believe, as one of the relatively strongest airlines on the globe. And we are still very keen on projects once we have repaired our balance sheet, like Project Sunrise, which will allow us to fly from the eastern states directly into destinations around the globe. We think in a post-COVID world, the business opportunities for those routes would be quite immense. And finally, we do think there are opportunities for us to increase our international market share coming out of this, given the fact that Qantas is managing this crisis very effectively compared to a lot of our peers.
And we hope that we continue to maintain the strength to allow us to take those opportunities on the other side of COVID-19. Back to you, Richard.
Chairman, the next. Thanks, Alan. Sorry, Chairman. The next question is from Benjamin Matzke. When COVID-19 restrictions ease, how can you ensure that all aircraft that have not flown for a duration be fit for flight? Will you guarantee that all aircraft be cleaned nose to tail each flight?
Thanks, Benjamin, for the question. And again, can I preface the answer by just saying this is a very strong focus of the board's always is. Safety, as I said earlier, is our number one priority. But again, because it's of so much interest and there's some detail to the answer, I'll get Alan to give a more detailed response to the question.
Thanks, Richard. And Benjamin, thanks for the question.
As Richard said, it's top of our mind and probably the entire aviation industry at the moment. And as you expect, there'll be a lot of aircraft grounded worldwide. In fact, we've had 220 of our just over 300 aircraft fleet grounded at some stage. And so there is a big task in making sure that we get them back into the air. And the program that we have around this involves a tailored approach to every aircraft. Every aircraft is going to be different dependent on the maintenance requirements it needs, which is dependent on the length of time that it's been on the ground. And we're developing bespoke, particularly designed programs for each aircraft. And to give you some of the complexities around this and how much effort is put into it, it takes on average seven days to wake up an aircraft.
For a 737 and a 787, it's 450 hours. An A330, it's 550 hours, and we are going through a lot of the fleet at the moment and reactivating them. It's also important to say that every aircraft has to come through an intense cleaning regime, as you can imagine, and we've also built into place a Fly Well and a Work Well program for continued operations. The Fly Well program now has changes to where you enter the airport, you check in, you use our lounges, you board the aircraft, and on the aircraft, every day we do intense cleaning of every aircraft with special disinfectants that actually work on COVID-19. We also focus on areas that have high passenger interaction: seatbelts, seats, toilets, overhead bins, and we provide all of our customers with masks and disinfectant for them to also use on the aircraft.
We've also put similar procedures in place for our people working across the board, so we're very conscious of the fact that as we build the airline back up, get aircraft back in the air, that we do it safely from an operational point of view, but also from a consumer health point of view, and have no doubt that Qantas will be one of the best airlines in the world at doing this.
Chairman, the next question has been submitted by the Australian Shareholders Association. What is the likely effect of Justice Geoffrey Flick's decision on Qantas JobKeeper-related back pay?
Thank you. Thank the Australian Shareholders Association for their ongoing engagement and involvement today. Alan Goldin, particularly for your work, Alan, thank you for that. We believe the decision is wrong. We'd like to appeal. We're also talking to the government about it.
Alan, can you go into a bit more detail about why we think it's wrong?
Yeah, Richard. First of all, yeah, we do think it's wrong, and we're not the only ones. The BCA and ACCI industry bodies have also commented that this would have a detrimental impact on a lot of business in Australia, probably thousands of businesses, which would have a negative impact on it. We believe that it is wrong because we were following the ATO guidelines on the payments of this. Very clearly in the judgment, the federal judge said that there was no attempt for Qantas to improperly hold excess payments from JobKeeper for itself. This is about who actually got the JobKeeper payments and how they were paid. We will be appealing it to the full bench.
That will be heard, we believe, pretty soon, and hopefully we can get clarity on this. Can I take a broader issue? Though we do see a lot of legal cases being taken against Qantas by the union movement at the moment. In fact, in the last two years, there were 66 legal cases, of which we've won all but five, and one of them is under appeal. That's a 93% success rate. Unfortunately, that's cost us over $ 10 million to defend those cases, a lot of cases which we believe should not have been taken. So it's not only wasting the members' money, but our money in this crisis.
And we hope that some sense will prevail and meanwhile due process should happen, a lot of these cases clearly are not sustainable and shouldn't have been taken, and it's costing us and the members of this union money that should not be spent in the middle of a crisis.
Thank you, Richard.
Chairman, we have a question from Wei-Jing Chong. Will Qantas invest more in thinner routes to increase market share during the COVID-19 pandemic? For example, Canberra-Hobart or Canberra-Auckland served with small, mid-sized aircraft.
Again, thanks, Wei-Jing, for the question. Alan and I talked a little bit about this, but Alan, I think we'll have some specific examples of where we are looking at new routes and indeed how some of our route frequencies and numbers of passengers have changed dramatically this year.
Yeah, thanks, Richard.
As an old network planner, schedules planner, I find this area really interesting. And one of the things I think Qantas does really well is act flexibly and adapts to changing market demand and circumstances. And as you can imagine, as the borders closed down, there are limited places people could fly to. For a period of time, they were mainly interstate within a state. And what we saw was actually, I think, truly amazing. Some routes like Brisbane-Cairns, it became our top route. It was, I think, number 14 the prior year. And we had Perth to Broome came number two. It was number 20 in the prior year. And Brisbane-Townsville, number 3. It was number 11 in the prior year. And what was great is the demand on those routes was bigger than it was pre-COVID because these weren't the places people could travel to.
So our intent here is, as borders open up, for us to try more and more new routes. And we have a philosophy which we think is important at the moment that if we can cover cash costs, we will put an aircraft back in the air. It's better to make a dollar in the air than lose a dollar on the ground. That means the airfares on a lot of routes can be a lot lower than they were prior to COVID-19 to generate a cash contribution for us. In fact, when the borders opened up in July, we had Jetstar leading with a $19 airfare, which was the biggest sale that Jetstar has ever had in its history, selling 200 tickets a minute. It was phenomenally big. And those $19 airfares were literally half of what we would have been offering on those routes before.
So we know we can stimulate demand. We can get people traveling. That gets aircraft back in the air. That gets our people back to work. That we believe is the right thing to do. So we are starting a lot of new routes. We've started Sydney to Orange recently. We've got routes from Brisbane and the Gold Coast into Tasmania as those borders have opened up. We're flying routes from Queensland into Canberra that we didn't have before. We're looking at places like Port Macquarie and adding Port Macquarie we didn't have before. And you'll see a lot more of them domestically on the Trans-Tasman. And hopefully when we get international bubbles internationally, we'll be flexible, adaptable, and add a route that can generate cash for us. Thanks, Richard.
Chairman, we have a question from Danielle and David Griffiths.
Why are you trying to apply for corporate welfare by making states bid for your corporate HQ? As a shareholder and a taxpayer, this is appalling.
Can I thank the Griffiths for their question? Again, I'll get Alan to go into some detail, but I would say that firstly, we've been hit, Qantas has been hit by this crisis more than most companies. And there are a number of implications, including the space we require in our offices. And as Alan and I both indicated earlier, looking for further cost efficiencies to ensure, firstly, the survival of the airline and then secondly, that we can come out of this crisis and grow and retain jobs. But Alan, can you go into some more detail for me, please?
Yes. And can I say that this is not the case for us looking for social welfare or corporate welfare?
This is the company looking at everything it's doing and figuring out what is the best way for us to operate going forward. We've reduced the size of our head office, both in Qantas and in Jetstar. There's opportunities for us to have a look at consolidation. Jetstar is based in Melbourne. Qantas is based in Sydney. Could we consolidate both of them together in one location? Could we start in a new location? We've also seen, because of construction of the WestConnex, that our simulator center, as an example, has to be demolished. We're not getting any compensation for the state government for that. We need to move that. So we're in the process of talking to each of the states about where that could be located and getting support for building a very complex and expensive center. We're also looking at the hangar space we have.
We do heavy maintenance. The only airline to do heavy maintenance in Australia, and we do it in Brisbane, but we're looking at hangar spaces coming available in Sydney and in Melbourne, and it's absolutely right for us to say where's the best place that that heavy maintenance should be done and talking to the state governments about what support they can give for this. I will emphasize as well, it's really important that we come out of this competitively, and Virgin, through voluntary administration, can terminate their leases and property leases. I think they had a six- to eight-year lease on their head office. They can walk away from it. We can't do that. They can walk away from it and save a lot of money, and they've gotten the Queensland government to give them support of over AUD 200 million for them to stay based in Queensland.
We need to make sure that Qantas is competitive, that Qantas doesn't have a disadvantage in any of these areas, and doing a property review like this is part of ensuring that we come out of this competitive and strong through this process.
Chairman, the next question is from Sue Innes and James Graham. Can you please explain why it is taking so long for refunds to be processed?
Yeah, thanks, James. Can I thank shareholders and indeed our customers for this question? It's complicated because of the numbers involved and because of also the number of people we've had to slow down. But Alan, can you go into a bit of detail to provide to our shareholders and customers who are in this position? Yes, Richard.
Can I first of all apologize for this because I don't think any airline was ever set up to see the level of cancellations, the level of customer bookings that we've had to refund. And we've been trying to do it in stages, so canceling the schedule period by period to make sure that we don't have an overwhelming deluge into our call centers. And some of these refunds are really complex to do. We know that some of the international refunds can take a person up to two hours to do them. And we are seeing the wait times go out as a consequence of the massive amount of refunds that we have to do. A lot of airlines are experiencing the same problem. I do apologize for it. We are working through it.
And we hope to all of the refund requests that are in to get them cleared by the end of this year before Christmas. And that's a process that we're working on at the moment. But again, our apologies for this. These are unique circumstances. Bear with us. And can I thank all the customers that have converted to credit? The vast majority of customers have done that. That we think is going to be great value in the future because airfares will be lower. And a lot of customers are saving that credit for future trips, which we think is fantastic. So thank you if you've made that decision. And if you have made the decision for a refund, bear with us because we will get it done by Christmas.
Chairman, we have a question from Peter Sidney Dunn. Will a dividend be paid this year?
Thanks for the question, Mr. Dunn. One of the things Qantas has always had a focus on has been making returns and creating value for all our stakeholders with shareholders up front. And we've returned to shareholders through buybacks and dividends about $ 4.3 billion since 2015. We paid a dividend of $ 0.13 a share in September last year from last year's full year. But unfortunately, as the pandemic has worsened, we had to revoke the half-year dividend, avoiding the outflow of around $ 200 million in cash, which helped us maintain our strong liquidity. That's our focus at the moment, is maintaining a balance sheet that will get us through and enable us through the pandemic crisis and enable us to ramp up our operations because there's working capital implications in doing that. As we do that, we want to repair the balance sheet as we can.
And after that, obviously, we'll look at returning excess capital to shareholders. But our focus and the board and Alan's strong focus right now is on our liquidity and on our balance sheet.
Chairman, the next question is from the Australian Shareholders Association. Without counting the ground crew, is it 6,000 or 8,000 or 8,500, the number of job losses to date? Of the 20,000 stood down, is it believed that they will all have jobs?
Again, thanks to the Shareholders Association. Interestingly, Alan, when I met with Allan Goldin, the other participant from the Shareholders Association was Richard McDonald, who's formerly a Qantas pilot and long history with Qantas. So again, I thank the Shareholders Association. And Alan, can you detail where we are at in terms of jobs and number of people stood down?
Yeah, thanks, Richard.
So to clear it up, when we announced the restructuring program earlier on the year, we said there would be 6,000 redundancies. That did not include the ground handling review. Since then, Jetstar has made the decision to outsource the ground handling, which affects 400 people, which brings the redundancies to 6,400. Qantas is still going through the process. As Richard has said, no decision has been made on that. If the in-house bid wins, there won't be any further redundancies there. If the bid doesn't win and we decide to outsource it, then there'll be a further 2,000 redundancies, bringing the total to 8,400. Of the people stood down, we initially said 20,000. There are 18,000 currently stood down because we've activated some flying. We wouldn't be keeping those people as part of Qantas longer term if we didn't think there are jobs.
We do believe that we will be growing the international business back again. We do believe that we'll need those people for those roles. And that's why we have kept them. And that's why they're getting the benefit of JobKeeper. I think JobKeeper was designed to keep and pay for people that have an association with the company and are going to be there long term. We take that seriously. And we do believe that these roles will exist longer term.
Chairman, the next question is from the Australian Shareholders Association. What is the actual cash burn and how long can you last?
Again, thanks for the question. It's actually worth just giving a little bit of background on this. And it's a credit to the leadership of Alan and his team.
I got a phone call early this year, very early this year, from Alan saying, "Richard, there's a virus circulating in China. I think it's going to be quite a big issue for the airline industry and I'm going to stand up our crisis committee." That was well before anyone else was doing anything, indeed, in the country on this. And from that moment, we've had an absolute focus on ensuring that Qantas got through this as best we could. And a key focus on that has been our liquidity and our cash burn. And one of the reasons we've been able to get our cash burn down to a level below most airlines in the world is because of that unrelenting focus of Alan, Tino, and Vanessa Hudson in their roles and the GMC. So there's been an absolute focus on this. It's been incredibly important.
It does move around because of one-off issues, but Alan, can you go into some detail? Because the board has met many, many times this year. This has been the number one focus for us.
Yeah, we have. Thanks, Richard. As Richard said, we have a very strong focus on cash at the moment, as you'd expect, and when we announced the cash burn back in July, we said that over the 80-in-1 period, that the average cash burn would be $ 40 million a week. We said that would include all payables, include debt repayments. It essentially covers a lot of cash that are going out of the business, except one-off like redundant. Other airlines, when they quote the amount of cash burn, don't include debt repayments or payables that are coming out or refunds that are coming out. We do within that.
Now, we do see that the business from its operations at the moment is covering cash costs, as we mentioned. That's been helped by freight, the fly-in fly-out business, the loyalty business, and by the fact that we're up to nearly 30% of our pre-COVID domestic network. If the border is opened up, as we think they will, that will enhance our cash position even further. And in the second half of this financial year, we expect to be net free cash flow positive if the border is opened up to the extent that we believe. We're still being conservative on Western Australia, but if the rest of the border is opened up, that's a great position to be in. And we'd be one of the few airlines that's getting close to that stage. There's still a lot of repair that will have to be done.
There's a lot of risks around the business still going forward because our balance sheet will need to be strengthened at some stage through this. Getting to a positive cash position is only the first stage of a long recovery.
Chairman, this question comes from the Australian Shareholders Association. Will you follow Virgin and throw all the awards out of the window and renegotiate them?
Alan, can I get you to respond to that, please?
Yeah, Richard. Our understanding, and we only understand what we see in the press and what we're hearing from the unions, is that Virgin have made a request to the unions for a negotiated position on each of the EBAs and have asked for significant cost savings. We know that process is going on at the moment.
It'll have to go through a negotiations, a vote with the individuals concerned, and then we will know the details of what's involved in that. We've made it very clear to the unions and to our own employees that we can't be at a disadvantage in this process, and if there are any concessions that are given to the unions on the Virgin side, our pilots, cabin crew, engineers, or any area in the company, we'll expect the same considerations to be given to Jetstar and Qantas because it will be really important that we maintain our competitive advantage to ensure that we can survive into the future and come out of this strong, so we've made that clear to the unions, to our people, and we wait and monitor what happens in this process, and we will look at it when it's finalized.
Chairman, Katie Hepworth from ACCR has asked the following question. IATA identifies continuous and rigorous training and the retention of an experienced workforce as key to reducing the frequency, cost, and impact of damages due to ground handling incidents. Can the board indicate whether the current bid process for the outsourcing of ground handling requires bidders to commit to minimum training standards and to minimizing turnover in their operations?
Thanks. And thanks to ACCR for their engagement on this. The short answer, I think I pretty well answered that earlier on when I made my opening comments about outsourcing ground handling. But yes, we set the training standards. Any contract, if we went that way, would require the contractor to deliver against those standards. We monitor performance against those standards. It's how we already run our 55 airports across the country.
And as I said, that's running effectively at the moment.
Chairman, the next question is from Richard Malone. When COVID normal is obtained, does Qantas see a continuing role for a first-class service on appropriate routes? What would be effect on revenue and maintaining or removing this option?
Thank you. And I'm going to get Alan to answer this one.
Yes. I mean, as we mentioned, we have parked the A380s, which actually half of them have a new refreshed first-class cabin. So our intent was to continue to invest in this product, improve this product. We think as a world-leading airline, it's important to have a first-class product. And we have every intent to bring the A380s back into operation. It may take a number of years for that demand to recover. But I have to say, the 787s have an amazing product on board.
Also, say that we were very close to finalizing where we were going on the Project Sunrise aircraft, and that did involve and will involve a brand new first class, which we think will be the leading first class of any airline in the world, and hopefully, when we repair our balance sheet, we get ourselves in a good position, we can order those aircraft and show you that amazing first-class product. We'll be the only Australian airline operating a long-haul international network. We'll be the only Australian airline operating an amazing product to a lot of these destinations, and we believe that's a big advantage that we'll have in a lot of our different markets.
Chairman, the next question is from Katie Hepworth from ACCR. Qantas has a significant contract to repatriate Australians stuck overseas due to COVID.
Can Qantas provide the numbers of airline and airport staff that have contracted COVID since the start of the pandemic? And what steps have they taken to support workers who have become ill at work?
Again, thanks to ACCR for the question. I'll preface the response by saying we put an enormous amount of work into ensuring our workplaces are COVID-safe. We Fly Well, Work Well, and lots of support and resources available. And as I said earlier, people on our repatriation flights, our staff have all been volunteers. And as far as I'm aware, there's been no transmission from over 100 of these repatriation flights we've operated to COVID hotspots. Alan, can you give a bit more detail across the whole workplace?
Yeah, as you said, Richard, on those 100 flights, there hasn't been any transmission to any of our crew operating on those flights because of the protections we put in, and in particular, we flew into Wuhan and carried passengers from the Diamond Princess, and we did that very successfully with the protections that we had put in place. At the very early stages of the outbreak, like a lot of companies, we did have a number of occasions where people did, unfortunately, catch COVID-19. It was well documented in Adelaide, in our ground handling operation there, that a number of our people caught COVID-19 at work, and then at the peak of the second wave in Melbourne, we had a small number of transmissions that took place at the freight terminal in Melbourne. Since then, we have put in a lot of extra protections across the board.
We also, I should have said, at the very early stages of it, had some cabin crew that caught COVID-19 in ports overseas when we weren't aware and a lot of the world wasn't aware that COVID was spreading in the community, like in the early stages in the United States. But we have put in a lot of protections since then. We've been operating a lot of flights, and we've had no community or transmission to our employees since these protections have been put in place.
Chairman, the next question has come through from Antonio Mattiazzi. Apologies for the pronunciation there. What is Qantas' view on the impact of longer-term corporate sector travel demand in light of the substantial increase in online meetings and interactions that companies are utilizing? Thank you.
Thanks. If I can use your Christian name, Antonio. Thanks for the question.
Again, I'll get Alan to give a detailed response. I was fortunate enough to sit in on a conference call last night with a number of global CEOs, and it was interesting. One of those who runs a very significant global company's response to that question was, he said, "I will use more Zoom and more WebEx and more Microsoft Teams meetings, but I'm not going to travel any less because it's incredibly important for me to get out and see my staff and my customers and our stakeholders face to face. And as soon as I'm able, I'll be doing that," and I suspect from a corporate point of view that there will be some caution, but that'll be the case pretty quickly as soon as possible. Certainly, I can tell you from my perspective, that will be the case. But Alan?
Yeah, Richard, that's exactly right.
As you can imagine, we've done a lot of research on this, talking to some of our leading corporate customers. Some of the professional firms, which are big customers of Qantas, have said to us that they do think once borders open up again, they will actually probably fly initially even more than they did before COVID-19 because they need to build back the relationships, see their teams around the globe, get the teams together, and I've always seen this as a bit of a reservoir that everybody has. You've had those personal contacts you've built up over the years, but as people change and as people separate, you're working at that reservoir and draining it down. You need to stock it back up again, and the personal interactions are really important.
We're also finding that from a big piece of research that we did with the vast majority of our corporates and SMEs saying that they were getting back again. There may be an impact, which there typically is during recession, and a recession can mean that given the economic impacts on that, that business traffic does reduce. On the positive side, though, Qantas, we think, will have an advantage at the corporate end of the market. We already had before COVID-19 80% of the corporate market. We think with our product, our services, our network, and particularly what we talked about around international when it starts, that gives us an advantage to even get more market share there.
We have a targeted program on the SME market, which is a market that we traditionally have been weaker in, with Qantas Business Rewards and a lot of focus on that market to gain share there as well. We think that could easily compensate for some of the weakness that would occur in other segments. I should say we represent a microcosm of the entire economy. A large element of our business market is the fly-in, fly-out, which is actually booming at the moment. It's bigger than it was before COVID-19. A large element is government work, which we think post getting the borders open up again will be actually probably bigger than before COVID-19. A large element is professional services. They'll have to get out and see people and travel a lot more.
And there will be some businesses that will obviously see this as a cost saving and cut back on it. But in the scheme of things, we think we can manage that effectively with the changes that we're putting in place.
Okay. Thanks, Alan. I think we've probably addressed all the significant issues raised in the questions received so far. So I'll now move on to the next item of ordinary business, which is the reelection of directors. The directors offering themselves for reelection at today's meeting include Maxine Brenner, Jacqueline Hey, and Michael L'Estrange. Pursuant to the Qantas Constitution and ASX Listing Rules, it is necessary for each director other than the CEO to seek reelection by shareholders at least every three years. The notice of meeting and annual report contain details of the director's background and experience, and we'll also shortly hear from each of the three directors.
The board works hard to achieve the right mix of skills and experience among our directors, and we consider that individually and collectively, the directors have an appropriate amount of skills, experience, and expertise to set the strategic direction of the group and monitor the implementation of that strategy by management. I'd like to thank my fellow board members for their valuable contribution and leadership over the past year. Item 2.1 of today's meeting relates to the reelection of Maxine Brenner. Maxine was appointed to the Qantas board in August 2013. She's a member of the Remuneration Committee and the Audit Committee. The board believes that Ms. Brenner provides, through her considerable strategic, financial, and legal experience, great strength and leadership to the board and its deliberations generally. Additionally, these skills add to the strength of the audit and REM committees on which she serves. While Ms.
Brenner is a member of other companies' audit committees. Due to the different financial year-ends of the companies, she is able to devote adequate time and attention to her audit committee work. The directors with Ms. Brenner abstaining unanimously support her reelection and recommend that you vote in favor of this resolution. I'd now like to invite Maxine, who is with us in Mascot, to say a few words.
Thank you, Richard, and good morning, fellow shareholders. I've served as a director of your company for the past seven years. I started in 2013, a time when the company was facing very tough times and a significant transformation was required. We had many difficult decisions in redesigning how Qantas would do business going forward, a way which would make us fit for those challenges and the years ahead. Seven years later, we are facing the global challenges of the pandemic.
Once again, we have to respond, this time to uncertainties and threats we've never faced before. On a daily basis, Alan and his team are working very hard to reinvent our business. Being part of that team is a great privilege. My executive experience in banking and law has seen me assist many companies through major transformations. As a non-executive director of boards in the energy, mining, property, and university sectors, I've had experience in navigating through very challenging times, situations which have required wholesale strategy resets and strong execution in the context of great uncertainty. Learnings around customer disruption and technology have been particularly useful, and I've tried to apply many of these insights to our deliberations. I bring these skills to my role as a director of Qantas together with a passion, a passion to do the best we can for our unique company.
This is why I'm seeking your support for reelection, so that I may have the opportunity to keep contributing to the success of our significant transformation task, our future, and the future of our shareholders, employees, customers, and wider stakeholder community. Thank you.
Thanks, Maxine. I now formally propose the following ordinary resolution: that Maxine Brenner, a non-executive director retiring in accordance with the Constitution, being eligible, is reelected as a non-executive director of Qantas Airways Limited. I'll now take questions on Maxine's reelection.
Chairman, there are no questions on this item.
Thanks, Jackie. Given there are no further questions, I'll turn to the details of the proxy votes received prior to the meeting. On the screen are details of the proxy votes received in respect of Maxine's reelection.
If the results of the poll when finalized reflect the proxy voting, the resolution will be carried, and I'll be congratulating Maxine on her reelection. Well done, Maxine. The second reelection is that of Jackie Hey, being item 2.2 of the notice of meeting. Jacqueline Hey was appointed to the Qantas board in August 2013. She is a member of the Audit Committee. The board believes that Ms. Hey's extensive financial, operational, and international experience enables her to make a significant contribution to the board and the Audit Committee. The directors, with Ms. Hey abstaining, unanimously support her reelection and recommend that you vote in favor of this resolution. We'll now hear a brief message from Jackie.
Thank you, Richard, and hello to all the shareholders watching this today.
Like other members of your board, I've been based overseas a number of times and have also spent a lot of my working life traveling between Australia and the rest of the world. So I've always had a very personal connection with Qantas, feeling at home, safe, and very well looked after on its aircraft. I know a lot of other people feel the same way and really miss flying at the moment. And that is part of what makes being involved with this remarkable company such an honor. In terms of what I can bring to the board if I'm given the opportunity to serve for another term, well, like Maxine, I joined in 2013 just as Qantas was starting a major turnaround. What was clear then is that the scale and complexity of this company presents its own challenges when it comes to change.
So I'd regard that prior experience as so important for the transformation ahead. My experience outside of Qantas is in technology, finance, and energy. Along with transport, these are some of the key building blocks in our economy. In particular, I've seen how quickly technology drives change, including, of course, the customer experience, all things that I think will be critical to Qantas in the years in front of us. I hope that I have your backing for reelection, and if I'm supported, I look forward to having the opportunity to continue to serve Qantas and all its stakeholders, especially, of course, you, the shareholders. Thank you.
Thank you, Jackie. I now formally propose the following ordinary resolution: that Jackie Hey, a non-executive director retiring in accordance with the Constitution, being eligible, is reelected as a non-executive director of Qantas Airways Limited. I'll now take questions on Jackie's reelection.
Chairman, there are no questions on this item.
Thank you. So I'll turn to the details of the proxy votes received prior to the meeting. On the screen are details of the proxy votes received in respect of Jackie's reelection. If the results of the poll when finalized reflect the proxy voting, the resolution will be carried, and I will be congratulating Jackie on her reelection. Well done, Jackie. The third and final reelection today is that of Michael L'Estrange, being item 2.3 of the notice of meeting. Michael L'Estrange was appointed to the Qantas board in April 2016. He's a member of the Remuneration Committee and Safety, Health, Environment, and Security Committee. The board believes that Mr. L'Estrange's significant international affairs and trade experience enables him to make a valuable contribution to the board and as a member of the Safety, Health, Environment, and Security Committee and REM Committee.
The directors, with Mr. L'Estrange abstaining, unanimously support his reelection and recommend that you vote in favor of Michael.
Thank you, Richard, and hello to everyone. I've been a director of Qantas since 2016, and I have always regarded that role as a high responsibility and a great honor, and never more so than over the course of this year. In this period, Qantas has confronted an unprecedented set of challenges in ways that have involved necessary but difficult changes, as well as important areas of continuity, particularly in relation to Qantas's role as national carrier, its exemplary and ongoing commitment to safety, and its support for Australians overseas, particularly through more than 100 repatriation flights.
When I think of what I could bring in particular to the role of a Qantas director over the next few years, I look to the key features of the COVID recovery phase and the environment in which Qantas will be operating. In this phase, the role of government in Australia and internationally is going to become increasingly influential, and the interactions between the public and private sectors are going to become increasingly important. In such an environment, I feel that my experiences in Australian government service, particularly as Secretary to the Cabinet, as Australian High Commissioner to the United Kingdom, and as Secretary to the Department of Foreign Affairs and Trade, will have particular relevance and provide important insights in terms of Qantas operations and strategic planning.
In this context, and if you would give me the opportunity, I would look forward to continuing to serve the Qantas board and Qantas stakeholders in the critical period that lies ahead. Thank you very much.
Thank you, Michael. I now formally propose the following ordinary resolution: that Michael L'Estrange, a non-executive director retiring in accordance with the Constitution, being eligible, is reelected as a non-executive director of Qantas Airways Limited. I'll now take questions on Michael's reelection.
Chairman, the Australian Shareholders Association has expressed concerns about voting for Mr. L'Estrange, as by their guidelines, his shareholding is low unless he commits to increasing it. How does Qantas respond to this?
Thanks, and thanks to the Shareholders Association. Actually, in this year's Remuneration Report on page 36, we've detailed the minimum shareholding guidelines we've set for non-executive directors, the CEO, and executive management.
And as we outline in that report, Michael has a maximum five-year timeframe from the introduction of the guidelines, being one July 2019, to acquire a shareholding value of one times base fees. He recently participated in the Qantas Share Purchase Plan, portion of the equity issue, and now has a total of just under 25,000 shares and was, prior to the board, going to no fees, going to participate in the Share Purchase Plan for the board. So we would expect Michael's shareholding to meet those guidelines within the timeframe outlined.
Chairman, a question has come through from Michael Cochrane. Mr. L'Estrange should resign from all company positions. He is partly responsible for the Rio Tinto action over the Aboriginal caves in the Pilbara. How does Qantas respond to this?
Yeah, thanks, Mr. Cochran, for the question.
We understand and agree with the community sentiment on the destruction of these caves and what they represent to the traditional owners. It was a tragedy, and I think, as everyone now believes, should not have been allowed to happen. The board of Rio also recognizes that. You can see that from their statements and the various actions they've now taken. The substance of that matter is one, of course, for Rio to deal with. And as it relates to Michael's position on the Qantas board, let me say this: I've known Michael for a number of years. He is someone of the highest integrity. His performance on the Qantas board is exemplary. He brings an important perspective on international affairs as well as government relations, which is very important to our deliberations.
He's incredibly diligent with the work he does, and I think he's a voice of great reason and one that his fellow directors absolutely respect. I think it'd be fair to say that, like all of us, because we've all made mistakes, experience that we can then bring to further deliberations and I don't think it hurts to have people who've had those experiences around the board table, particularly with the sort of integrity that Michael has.
Chairman, there are no further questions on this item.
Thank you, so I'll now turn to the details of the proxy votes received prior to the meeting, and they're on screen. If the results of the poll, when finalized, reflect the proxy voting, the resolution will be carried, and I'll be congratulating Michael on his reelection, well done, Michael.
We now move to consider items of business relating to remuneration, namely resolutions three and four set out in the notice of meeting. Before considering these resolutions, we'll hear a few remarks from Paul Rayner, Chairman of the Remuneration Committee on Qantas's approach to REM and this year's Remuneration Report. During his address, Paul will specifically deal with the remuneration-related themes emerging from the questions submitted in advance of this meeting.
Thank you, Richard. I would like to present this year's Remuneration Report to Qantas shareholders. The report outlines our approach to executive remuneration, describes how payout comes linked to performance, and it details the pay decisions that have been made by the board. This was the most challenging of years in Australia's economic history, and in particular, the global aviation industry.
This is reflected both in the group's financial results as well as the board's approach to remuneration outcomes for fiscal year 2020. The remuneration framework at Qantas is comprised of base pay, and that's annual pay, an annual incentive, which is referred to as the Short-Term Incentive Plan, where each year executives may receive a combination of cash and restricted shares if the plan's performance targets are achieved, and then there's a Long-Term Incentive Plan, which is referred to as the LTIP. The LTIP involves the granting of rights over Qantas shares, and if performance and service conditions are achieved over a three-year period, the rights vest and convert to Qantas shares. The vested shares are subject to a one-year trading restriction, during which the shares cannot be traded and are subject to clawback. If performance and service conditions are not met, the rights lapse and no shares are awarded.
Turning now to the remuneration outcomes for 2020 for each element of this framework. First, base pay. The agreed base pay of the Chief Executive Officer and the Executive Management Team was not increased at the start of fiscal year 2020. In addition to this, the CEO and executive management elected to take zero base pay from the 1st of April 2020 to the 30th of June 2020. It should be noted that for the month of July 2020, the CEO continued to take no base pay, and from the 1st of August, he elected to forego 35% of his base pay. In addition, executive management elected to forego 15% of their base pay for the months July through to October 2020 inclusive. Moving now to the next part of the framework, which is the annual incentive outcome.
Awards under the annual incentive would normally be determined based on performance against a balanced scorecard of measures. This has a mix of financial and important non-financial targets. Prior to COVID-19, the balanced scorecard was tracking for a strong overall outcome with financial measures forecast to be achieved. As you all know, border closures resulted in a dramatic decline in traveler demand and thus flying and therefore revenue. Therefore, the financial measures were not met. Performance against the number of non-financial measures in the balanced scorecard was good, including customer advocacy and workplace and operational safety. However, the board recognizes that incentive payments must be considered in the context of the overall environment to which Qantas and its employees are subject. Therefore, the board applied its discretion and determined that annual bonuses would not be paid this year. The final element of the remuneration framework is the long-term incentive.
The performance conditions under the Long-Term Incentive Plan are the relative total shareholder return, or TSR, of Qantas compared to two peer groups, being companies in the ASX 100 and also a peer group of global listed airlines. Long-Term Incentive Plan awards were tested at the 30th of June 2020, and the performance conditions were partially achieved. Qantas's three-year relative TSR performance was ranked first in the airline peer group, and hence this performance condition was fully achieved, and it was ranked 68 in the ASX 100, so therefore this performance condition was not achieved. Based on this performance, for executive management, 50% of rights vested and converted to shares, and the remaining rights lapsed. It's worth noting, however, that the total base pay foregone by the executive management team, putting the CEO to one side for the moment, was greater than the total value of the LTIPs that vested.
In the case of the CEO, he offered, and the board agreed, to defer the decision until at least August 2021 as to whether his rights will be forfeited or allowed to convert to shares. For fiscal year 2020, the CEO's total pay dropped by 83% compared with fiscal year 2019, and total key management personnel pay dropped by 69% compared with the previous year, fiscal year 2019. Consistent with the executive management team, non-executive directors elected not to take fees from April through to June of 2020. In addition, the chairman continued his period of zero pay during July before moving to 65% of fees from the 1st of August 2020. The rest of the non-executive directors had their fees reduced to 85% from July through to October of this year inclusive.
Finally, I would like to highlight a change to the remuneration framework that will apply for fiscal year 2021 only. The board has changed the relative weighting of the incentive plans. For each executive, this involves a decrease to their annual incentive opportunity and an increase to their long-term incentive opportunity. This change involves no increase to the overall at-target pay for each manager because, while they have received an additional opportunity in the form of a long-term incentive, their short-term incentive opportunity has reduced. The board has also extended participation in the current year's Long-Term Incentive Plan to a broader management population for fiscal year 2021. We have extended participation to the broader management team as retention of key talent is critical to support our recovery plan. Many of the executives who've been offered participation in this remix have skills which are transferable to other companies.
This one-off change aligns the broader management team with implementation of the three-year post-COVID-19 recovery plan. The three-year performance period under the Long-Term Incentive Plan is aligned with the timeframe of the recovery plan and therefore with shareholder interests and returns. In conclusion, the key point I would like you to take away is that the board's aim is to ensure that payout comes aligned and appropriate for the economic environment in which Qantas, its people, and its shareholders are operating. The board also recognizes that the demands on management are greater than ever, and it's critical for the recovery and the group's long-term success that the remuneration framework works to maintain a high-performing management team. We will continue to review the remuneration framework and welcome your comments and suggestions for any further improvements. I'll now hand back to the chairman, who will present the resolutions.
Thanks, Paul.
The third item of formal business for this meeting is to consider the proposed award of rights to your CEO, Alan Joyce, under the group's Long-Term Incentive Plan. This award is explained in the notice of meeting. However, I'd like to reiterate an important point on the operation of the Long-Term Incentive Plan. These rights will only vest and convert to shares if the three-year performance conditions are fully achieved. These performance conditions are aligned to the group's recovery plan. Should these 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.
For rights to vest in full, 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. These are very tough hurdles. If Qantas does outperform both the ASX 100 and the global listed airlines peer group over the next three years, it would be an excellent result for shareholders. As outlined in the notice of meeting, Qantas will disregard any votes cast on this resolution by Alan Joyce, his associates, and his 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 chairman of this meeting, I intend to vote all undirected proxies in favor of this resolution. The directors, with Alan Joyce abstaining, recommend that you vote in favor of this ordinary resolution.
I'll now take any questions on this item.
Chairman, we have a question from James Stenzel. How can the Chief Executive Officer, Alan Joyce, and the executive board and managers continue to take obscenely large salaries, even at a reduced rate during COVID-19, and expect to reap benefits of Long-Term Incentive Plans when the majority of staff are stood down and struggling or losing their livelihoods entirely?
Thanks, Mr. Stenzel, for the question. I actually think we're incredibly fortunate to have the CEO of Alan's capacity heading Qantas over the last 11 years and for the best part of the next three. Qantas has outperformed pretty much every airline in the world, and we're in better shape than most to deal with what is the most difficult circumstances that this industry and this airline has ever faced.
We recognize it's an incredibly difficult time for a lot of people, particularly in our business, and that's been reflected in Alan taking no salary for four months and then a reduced salary and also deferring any decision on his long-term incentive last year, and that has meant an 83% decline in his take-home pay compared to the previous year. I think Alan, the management team, and the board have taken really important leadership that is, I think, at the forefront of ASX companies in terms of remuneration, and he and the team are to be congratulated for that.
Chairman, the next question has come through from Graham Frank Roy. I note that Alan Joyce is one of the top 20 largest shareholders in Qantas. Please confirm that Alan Joyce, as CEO, abstains from voting on such CEO incentive plans and share bonuses.
This would avoid a potential conflict of interest. Thank you.
Thanks for the question, and I think I just outlined that in terms of the procedures with Alan's vote. So Alan or any related parties cannot vote on, or K&P cannot vote on the REM report or on Alan's Long-Term Incentive Plan.
Chairman, there are no further questions on this item.
Thanks, Jackie. Then I now propose the following ordinary resolution: that Alan Joyce, the Chief Executive Officer of Qantas Airways Limited, is permitted to participate in the Qantas Long-Term Incentive Plan as is contemplated by the explanatory notes accompanying the 2020 notice of meeting. On the screen are details of the proxy votes received in advance of the meeting in respect of this resolution. We'll now move on to the next item of business.
The fourth item of formal business for this meeting is to consider an advisory resolution to approve the Remuneration Report. The remuneration decisions made by the board during the year were just outlined by Paul and are detailed in the Remuneration Report. Qantas will disregard any votes cast on this resolution by 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 chairman of the meeting, I intend to vote all undirected proxies in favor of this advisory resolution. The directors recommend that you vote in favor of this advisory resolution. Bearing Paul's earlier comments in mind, I'll now take any questions on this item.
Chairman, we have a question from the Australian Shareholders Association on this item.
For 2020-2021, the CEO's target Short-Term Incentive Plan, or STIP for short, is 50% of base. Is his maximum 150%? Will the STIP be all in equity? For the purpose of STIP calculation, what is his base?
Thanks to the Shareholders Association. So for the purpose of the STIP, Alan's base pay plus super is $ 2,170,000. So his FY21 STIP at target opportunity is half of his base pay, being AUD 1,085,000. The maximum short-term scorecard outcome for FY21 has been reduced from 175- 150%. However, that's going to be pretty impractical this year, and we would think that if he achieves anything around 90% of his base pay, that would be an incredibly terrific result for the group. The board has discretion as to whether the STIP, the STIP, is awarding cash or shares. The default is two-thirds cash, one-third shares.
Chairman, the next question is from Priyad Pty Ltd. Directors are overpaid, should be on JobKeeper. A poor performance. Need not greed, please. How does Qantas respond to this?
Thanks from Priyad. As I said earlier, the board took no salary for three months. Alan and I, for a longer period, it's the same approach as management. I think the board has been exemplary in its behavior on this front.
Chairman, the next question has been asked by Jacqueline Graham. I commend the board action to increase the number of women in key management positions. The WGEA data is 40%, with a policy on and key performance indicators for gender equality. However, the number at exec GM level remains at 26%.
Knowing what gets measured gets done, and measures are more impactful if linked to individual financial outcomes, can you explain how KPIs are reflected in remuneration of executives and directors, and if they will continue to improve the balance in leadership?
Thanks. It's a great question. I'll get Alan to give a bit of detail on our strategies about increasing female representation at all levels in the organization. I will say that we do have targets. They're not included in remuneration, but they are included in our views on how people are performing from a board level down. Alan, can you give a bit more detail on what we're doing in terms of meeting the targets we've set?
Yeah, Richard. I mean, obviously, diversity is a big focus for us. We're very passionate about diversity.
We're very passionate about getting a diverse team that represents Australia in all of its forms. We think that makes us a better company and makes us represent our community, our employees better if that's the case. We have given ourselves a target by June 2021 to get to 38% of senior managers being female. By June 30th, 2020, we were at 37%. That includes a wider cohort than just the GMC, and at the GMC, my reports were at 30%, and we are very much focused on continuing to improve it, and there's a lot of focus also on Indigenous representation. Before COVID-19, we were one of the few companies in the country that had the Elevate status with reconciliation. That for us was an important level to get to, and we've been focusing also trying to get to 3% of Indigenous employees across the board.
We also are focused on LGBTI inclusion. Recently, we've just won a silver level coming over the last few years from the ACON Group about employer awards, about how we represent that community within our workforce. There are areas that we still need to work on. There are areas like pilots and engineers that are very male-dominated professions. They're dominated in that area because, in some cases, we're not getting enough females coming through schools with the right qualifications, with having science, math, or education qualifications that allow us to recruit them in, and we've put initiatives in place. We will have one for pilots called the Nancy- Bird Walton Initiative after that amazing lady that was one of the first pilots in Australia. We have an A380 named after her, and that is targeting that we get within the next decade to 40% of our intakes being female.
I will say that we have one of the leading airlines in the world with female pilots. Qantas Link is in the high teens, Jonathan, in the high teens in terms of pilots. I think there's only one other airline in the world that has a higher level of female pilots, and this is all about getting the best people to do the job. Sometimes we get criticism that you have these targets and that you're not after the best people. We're clearly after the best people, and we want to, with the pilots that we need for the future, have people that we're selecting from all of the community and not really just selecting for 50% of the community. That will ensure that Qantas keeps on having the best pilots in the world, so this is a real focus. We're passionate about it.
The entire management team is, and we think it makes Qantas a unique airline in the globe.
Chairman, the next question has come through from Allan Goldin. Is the intention to return to paying STIP 100% in cash?
Thanks, Mr. Goldin, for the question. As I said a moment ago, the default allocation is two-thirds cash, one-third shares. That's our intention this year if the STIP is paid, and indeed, I hope for all our stakeholders that it is.
Chairman, there are no further questions on this item.
Thanks, Jackie. I formally now propose the following ordinary resolution: that the Remuneration Report for the year ended 30 June 2020, set out in the directors' report, is adopted. On the screen are details of the proxy votes received in advance of the meeting in respect of this resolution. We'll now move to the next item of business.
The fifth and final item of formal business is to consider the refresh of Qantas' placement capacity. On 1 July 2020, Qantas issued approximately 373 million fully paid ordinary shares pursuant to the Institutional Placement that was announced to the ASX on the 26th of June 2020. The placement was accompanied by a Share Purchase Plan which gave all other shareholders an opportunity to also acquire shares at a discounted price. Under the ASX Listing Rules, there are limits on the amount of equity securities that a company can issue without the approval of its shareholders over any 12-month period. The placement used up virtually all this limit, which has effectively reduced Qantas' capacity to issue further equity securities without shareholder approval.
The listing rules allow shareholders of a company to approve an issue of equity securities after it has been made, and we are seeking your approval in this regard to retain flexibility for the future. I'll now take any questions on this item.
Chairman, there are no questions on this item.
Thanks, Jackie. Then I formally propose the following ordinary resolution: that the issue of 372,698,270 fully paid ordinary shares pursuant to the Institutional Placement announced by Qantas to ASX on 26 June 2020 is approved for the purposes of ASX Listing Rule 7.4 and all other purposes. On the screen are details of the proxy votes received in advance of the meeting in respect of this resolution. All resolutions have now been dealt with, which concludes the formal business of this meeting. I now declare this meeting closed.
Shareholders and proxy holders will have five minutes from now to submit their votes via the online platform if they have not already done so. A countdown timer will appear at the top of your screen in the online platform. Once that closes, any vote you have placed will automatically be submitted. Once all votes have been accounted for and verified by the share registry, the results of the AGM will be launched with the ASX as soon as possible, which will be later this afternoon. Again, on behalf of the board, thank you for joining us today for our Qantas virtual AGM. Stay well.