Great. Good morning, everyone. I am your board chair, John Mullen, and welcome to the 2026 Qantas Annual General Meeting. The AGM is a very important event for Qantas and its shareholders, and on behalf of the board, I would like to thank you all for participating, whether you are here in person or joining us online. Before we start, let me introduce your directors. From your left, we have Doug Parker, Alison Watkins. This is Alison's first AGM with us after joining the board in March this year, so welcome, Alison. Antony Tyler, Chair of the Safety, Health, Environment, and Security Committee. Dr. Nora Scheinkestel, Chair of the People and Remuneration Committee. General Counsel and Company Secretary, Kate Towey. Chief Executive Officer and Managing Director, Vanessa Hudson. Belinda Hutchinson, Chair of the Audit Committee. Dion Weisler and Dr. Heather Smith.
All directors up for election or re-election today will briefly address the meeting prior to the vote for their respective resolution. Also here today are David Richards and Scott Guse, the senior KPMG auditors who are available to answer any specific questions you may have about the conduct of the financial year 2026 audit in relation to the financial report, the director's report, and the sustainability report.
I will start today's meeting with some opening remarks, and then I will hand over to Vanessa for some brief comments. After Vanessa has spoken, we will move to the formal business of the meeting, including voting on the resolutions to be put to the meeting and answering your questions. I am pleased to confirm that a quorum is present, and I formally declare the 2026 Annual General Meeting therefore open. Good morning again, and welcome to the Qantas Group's 2026 Annual General Meeting.
It is a real privilege to be here in Canberra addressing you as board chair. It is fitting to bring the meeting of the national carrier back to Australia's capital. In October 1946, 80 years ago, Trans Australia Airlines operated its first flight to Canberra, adding a stop in the capital to its Sydney-Melbourne service. This was one of the airline's first routes, providing a critical connection for politicians and the public service and those visiting this great city. Great. In 1986, TAA rebranded as Australian Airlines, which then became a part of Qantas in the early 1990s. Canberra's name has also flown on some of the most important aircraft in our history, including our first Boeing 747 and the first 747-400, which were both named City of Canberra. It is great to be here again, and I look forward to taking shareholder questions shortly.
First, I want to provide an overview of the year that we have had and the areas where we have focused on and will be focusing on the year ahead and beyond. I will then pass over to Vanessa to speak about the business in more detail before we take questions from shareholders. The 2026 financial year was a year that was split into two distinct periods. In the first eight months of the year, Qantas and Jetstar both performed strongly, with demand growing across our domestic and international networks and profitability benefiting from the arrival of more new aircraft. Then from late February, just days after management posted our half-year financial results, the conflict in the Middle East pushed fuel prices to record highs, and globally, aviation experienced significant disruption.
Vanessa and the management team moved quickly, adjusting fares and capacity amongst other things, which helped reduce the net impact on earnings for the year to AUD 420 million, despite a fuel bill that was AUD 610 million higher than expected. The group would have had a record year if it were not for these events, and despite the very significant fuel impact on the group, they still delivered a strong underlying profit before tax of AUD 2.06 billion, down AUD 330 million only on the prior year. Throughout the year, our dual brand strategy with Qantas and Jetstar was a real driver of value, providing choice for customers and resilience and flexibility for the group as we adjusted our operations. Qantas Loyalty was a standout too, growing underlying EBIT by 12% and providing earnings diversity while the airline businesses carried our fuel bill.
Delivering a AUD 2 billion group profit in a year like this says a great deal about the value of our integrated portfolio. Importantly, despite the challenging end of the year, we also continued to improve the experience for our customers and our employees. Qantas was named Australia's most on-time airline for the eighth year in a row, and customer satisfaction reached a decade high as we continued to invest in product and service improvements. Jetstar also saw its Net Promoter Score improve as customers continued to benefit from its investment in technology, more new aircraft, and the first of its refurbished 787s. As I've spoken about before, the board and management are committed to ensuring Qantas and Jetstar have the trust of our customers, shareholders, and people. I know many shareholders will be pleased to hear about the performance alongside continued strong financial results.
All of this is helping to restore Qantas' brand amongst customers and the broader community. Qantas' brand reputation score, which is measured independently by RepTrak, moved back into the strong category for the first time in four years. A key driver of this improvement and the experience our customers are having with us is our new aircraft. The group is investing heavily in new aircraft across Qantas, QantasLink, Qantas Freight, and Jetstar. As we continue investing for the future, the board is also pleased that we have been able to reward shareholders again through dividends this year. We returned AUD 700 million in fully franked dividends to shareholders during the financial year. At our half-year results in February, we also announced our intention to undertake a AUD 150 million on-market share buyback. The conflict and fuel volatility that followed absorbed the surplus capital that would have funded that.
Given that change in conditions, the board decided not to proceed with the buyback. During the year, we also agreed to sell our one-third stake in Jetstar Japan, so we can redirect that capital into Qantas and Jetstar's core businesses here in Australia. Pending regulatory approvals, the sale is expected to be completed by June 2027. I would like to take this opportunity to again stress the importance of our financial framework. Despite challenging economic times and the largest fleet renewal program in the company's history, we are firmly committed to a conservative approach to debt by keeping our leverage low while also ensuring the reliability of dividends on an annual basis. Some airlines take a more aggressive approach, but we believe that maintaining a strong balance sheet is critical to an airline such as the Qantas Group.
Now, we couldn't have delivered these results without our people, and on behalf of the board, I want to thank all of them for the resilience and commitment they have shown this year. Our frontline employees turn up to work every day in environments where risks exist, and keeping them safe remains our number one priority. As we let you know at last year's AGM, tragically, a worker died at our Sydney freight terminal in September last year, and our thoughts continue to be with their family, friends, and colleagues. Qantas Freight conducted a comprehensive investigation and has made changes to its systems, controls, and safety culture as a result. SafeWork NSW is conducting its own investigation, and we are cooperating with them fully. We also continued with our board renewal during the year, welcoming Alison Watkins as an independent non-executive director in March.
Alison's executive and board experience spans prominent consumer brands and some of Australia's largest businesses. She is standing for election today. Belinda Hutchinson and Tony Tyler are standing for re-election. Both joined the Qantas Group board in 2018, and their experience has proved valuable continually through a period of considerable renewal at both the board and management level, and you'll hear from them shortly. We'll continue to add new talent to the board, and I look forward to keeping you updated. I'd now like to briefly speak to remuneration, which Nora will cover in more detail shortly. Ahead of the AGM, the majority of the proxy advisors published voting advice in support of all resolutions being labeled today. One proxy advisor, ISS, recommended against this year's remuneration report, and I would like to briefly address this now.
As I mentioned before, until the Middle East conflict, the company was tracking towards a record result, and management was likely to have received a maximum short-term incentive award, or STI. Despite management's prodigious efforts to reduce the impact, the increase in fuel costs beyond their control led to management missing the threshold level for their STI payout by just 1.7%, AUD 36 million on a result of over AUD 2 billion. Boards have a strong governance responsibility, of course, but we're not supposed to be policemen. We're also charged with attracting, retaining, and motivating top executive talent, and this involves making judgment calls on what is best for shareholders. In that light, while we have a strong track record of exercising negative discretion where this was warranted, occasionally it falls to a board to exercise positive discretion as well.
Qantas management delivered an extraordinarily strong result in FY 2026 across almost all areas of performance. To zero out the entirety of their financial STI component because of external events over which they had no control, but worked extremely hard to mitigate, in our view, would have been demotivating to the team and very much against shareholders' interests. For this reason, the board allowed a small adjustment that, while still far below what they would have received had fuel prices remained roughly in line with the pre-conflict level, nonetheless recognized the prodigious efforts made by management to still deliver a very strong result across almost all metrics. I strongly believe that boards have a responsibility to use their judgment on all important matters, both positively and negatively, and not to simply follow preset guidelines or ignore the real-world context in which guidelines are set.
In summary, the last year has been a period of progress despite material cost pressures and disruption that could have steered many organizations off course. Vanessa and the management team have done a terrific job in both managing the challenges and taking the opportunities that the year has presented. With our largest-ever fleet renewal delivering increased value, a strong balance sheet, and one of the world's best airline loyalty programs, the board is confident that the group is well-placed for the years ahead. In closing, I want to sincerely thank our shareholders, customers, and partners for your support over the past year, and the teams across the group for their hard work. I think I'll hand over to you.
Great. Thank you, John, and good morning, everybody. It is great to be in Canberra for this year's annual general meeting. This city is so central to how Australia operates, and we are incredibly proud to connect the nation's capital to more destinations than any other airline. Across Qantas and Jetstar, we operate more than 200 flights per week from Canberra to seven towns and cities, supporting tourism, local business, and connecting families. Canberra is also where the Qantas A220 story began, an aircraft that's leading our domestic fleet renewal. Our very first A220 service connected Canberra and Melbourne a couple of years ago, and today, this city is home to the engineering hangar for that fleet. The 16th A220 is arriving in the next few weeks. Before I talk to the year we've had, I want to also thank our people across the group.
Over the past 12 months, I've spent a lot of time in our operation across the country, on board our flights, in our hangars and crew rooms, our lounges, and training facilities. It's always great to spend time with our team in their workplace, to see their passion, and to hear firsthand how things are really going. They're honest about where we can improve and about what we're doing well, and most of all, their commitment to doing better for our customers shines through more than ever. That commitment across our business is what has allowed us to navigate a challenging year and build on the progress that we've made in the recent years. Despite record fuel costs and disruption from the Middle East conflict, our operational performance has been world-leading.
In June, Qantas was the most on-time major airline globally and has ranked in the top five in the world for on-time performance in seven months of this calendar year. Thank you. Qantas has also achieved its highest customer satisfaction score in a decade, and Jetstar's customer satisfaction also improved. Our teams delivered this in what has been an uncertain environment, with both airlines adjusting fares and capacity to manage the impact of significantly higher fuel price since February. At the start of the conflict, Qantas redeployed aircraft from across our network to Europe-bound routes, adding around 16,000 seats to and from Europe during the fourth quarter as other carriers reduced their flying. Leisure travel remained resilient, with Australians continuing to prioritize travel over other discretionary spend items, and big events, like the recent footy finals, have only added to that demand.
Qantas continued to see particularly strong growth in premium cabins, with international premium cabin revenue growing by 15% during the year, twice the rate of economy. We also launched Qantas Economy Plus, with more legroom, priority boarding, and more overhead locker space, which our customers are loving. We kept investing in our lounges, refreshing our lounges here in Canberra and in eight regional centers, and opening a stunning new lounge in Auckland. Our redeveloped and expanded Sydney International Business Lounge will open next month, and we are very excited to unveil some of the new features in this lounge, including an outdoor terrace with great views of the tarmac. All of this is resonating with customers. As John mentioned, Qantas' brand reputation score moved back into the strong category for the first time in four years.
At the value end, Jetstar carried a record number of passengers and kept fares low when many people are feeling the cost of living pressures. Almost half of our Jetstar customers flew for under AUD 150, with fares as low as AUD 29. New aircraft arrivals are also helping open new routes, with 11 new connections added during the year, including Melbourne-Colombo, which launched in August. Growth into Asia has been particularly strong, with Jetstar having now refurbished four of our 787s, which are flying to destinations like Phuket and Seoul. This reconfiguration has a business class cabin, which is double the size, and new Wi-Fi. They're all proving incredibly popular on these long-haul routes. Last month, Jetstar began flying from the new Western Sydney Airport, Australia's first major new airport in more than 50 years.
We're so proud to be one of its early supporters, given it will create jobs, open up more opportunities to travel, and support tourism growth in New South Wales, but right across the country. As John noted, Qantas Loyalty delivered another great result this year, showing just how valuable Qantas Frequent Flyer is to the group. Points earned and redeemed grew both by 9%, driven by strong engagement with our retail and financial services partners. Members booked a record 5 million flight reward seats. In recent years, we have focused on diversifying the program, giving members more reasons to join and engage with us outside of flying, and we're pleased that that's reflected in the numbers.
Today, we launched another Points Plane promotion, and from next month, members will be able to earn status on the ground, one of the most significant changes we've ever made to the program since its launch. The Reserve Bank changes have now flowed through to banks and their credit card programs. Despite the questions being raised about the potential impact from these changes to the programs like ours, we have seen double-digit increases in the number of Qantas earning credit cards issued in the first quarter compared to a year ago. We remain committed to our long-term targets for Qantas Loyalty. Turning to recent trading conditions, which we provide an update to the market this morning. Conditions continue to be in line with the outlook we provided in August, and demand remains resilient as customers continue to prioritize travel.
International demand remains strong across Qantas and Jetstar, supported by customers redirecting travel away from the Middle East. Domestic leisure demand also remains strong. Non-resource corporate and government travel is stable, and we are continuing to monitor that closely. Total unit revenue across the group, international and domestic, is still expected to grow between 8% and 10% for the first half. Fuel prices are expected to remain elevated through this financial year, with our fuel bill for the first half now forecast at approximately AUD 3.75 billion, up from around AUD 3.6 billion in the full-year update that we gave in August. We will continue to adjust fares and capacity in response. While we manage these near-term pressures, we have not lost sight of the long term, and we remain firmly committed to our investment in our fleet renewal.
In April, our first Project Sunrise aircraft arrives, and in October, we will launch the first nonstop flight from Sydney to London. Our more than 100 years of history has seen incredible innovation at Qantas, from inventing the first inflatable escape slide to the first airline to introduce business class in 1979. Project Sunrise is the next innovation in our future. Our fleet renewal is far bigger than Project Sunrise, with over 200 new aircraft joining the Qantas and Jetstar group, including 31 this financial year. More narrow-body aircraft for Qantas and Jetstar, and the first four new 787s for Qantas International arriving later in 2027. We are also in discussion with Airbus and Boeing about converting around 20 of our existing wide-body options into firm orders from 2030 to bolster our international fleet as we gradually phase out our A380s from 2028.
Our A380s have carried millions of customers and are a favorite amongst customers and our people. They will remain an important part of our fleet, and they will continue to fly for many years yet. All of this investment is creating more jobs and more opportunities for our people. We have added over 4,000 new operational roles in Australia since 2023, with thousands more to be added over the coming years. This requires investment in skills, training, and facilities. A few weeks ago, I was in Perth to open Jetstar's new cabin crew base. In August, we opened our flagship Emergency Procedures Training Center in Sydney, as we invest more than AUD 100 million in new training facilities and simulators. We continue with our employee share plan for its second year.
More than 25,000 eligible employees have received AUD 1,000 of Qantas shares, ensuring our people share directly in the group's success. The pace of change in technology and AI is unlike anything business around the world have ever faced, requiring them to rapidly transform how they operate and to keep pace with the changing expectations of our customers and workforce. Standing still is not an option for us either. Alongside our fleet, we are already investing significantly in technology and AI, because both are critical to our future. Three of our own team members built a tool recently that spots the flight that are most at risk of disruption each day, and it has helped lift our on-time performance significantly across both Jetstar and Qantas. In Adelaide, we have opened a product innovation center, which is growing to more than 400 roles, building the digital products our customers will use.
We've made a start, and now we need to accelerate. That means getting the systems and data underneath right, and partnering on this journey will be critical so that we can move at speed with the scale of reinvention that is needed. We're very mindful of the risks that come with new technology, and we keep investing in the governance and the capability to manage them. While higher fuel costs are a challenge, we showed that in this environment, we could deliver a strong result while continuing to invest and deliver more for our customers, our people, and our shareholders. So many of our key operational and customer measures improved over the past 12 months, and that reflects the commitment across our operations to do more where it matters. We have a lot to look forward to.
Project Sunrise leads the way, and there are so many other milestones too. Today, we've announced Qantas flights between Sydney and Cape Town from November next year. Qantas' Sydney International Business Lounge reopens in December, and our new flights between Sydney and Las Vegas begin next month as well. Jetstar will bring on more refurbished 787s, and across the group, we'll introduce new products and launch more flights to new markets. There will be more opportunities for our people, and we'll keep growing safely and responsibly. Thank you for joining us today and for your ongoing support.
Thank you, Vanessa. Thank you. We will now turn to the formal business of the meeting, and let me first outline the procedural matters for the meeting. As this is a meeting of Qantas shareholders, only shareholders, their appointed proxies, or authorized representatives are entitled to make comments, ask questions, or vote. The notice of meeting dated 25th September 2026 was circulated to members and made available on Qantas' investor site, so I'll take that as being read. Following consideration of the reports, I will then turn to general questions. Shareholders with queries relating to specific resolutions are requested to raise them at the time that the resolution is being considered. If a shareholder has a specific customer-related issue, we have dedicated customer care representatives from Qantas, Jetstar, and Qantas Loyalty with us today, and they will be available in the foyer after the meeting.
For any current or former employee shareholders present who wish to raise an employment-related issue, we have representatives from our group remuneration and industrial relations teams here today as well, and they will be available after the meeting to address your specific questions. Those in the room who would like to ask a question are asked to move to one of the microphones located in the aisles, and after providing your shareholder details to the attendant, please wait to be invited to ask your question. Only those with a voting handset or a blue non-voting shareholder card are allowed to ask questions. Shareholders who are attending online can submit questions via the online meeting platform by clicking on the messaging icon on your screen, selecting the item of business relevant to your question, typing your question, and then pressing send.
You can view your submitted messages along with any written responses by selecting My Messages. Online shareholders can also ask a question verbally by clicking on Request to Speak at the top right corner of the broadcast window. You will then be prompted to confirm your name and enter the topic of your question. Submit your request and follow the instructions to allow access to your microphone and connect to the queue. You will be able to listen to the meeting on the audio line while you wait to ask your question. Questions submitted online that are relevant to the business of the meeting will be read aloud to me by a Qantas staff member, and we may amalgamate questions if there are multiple questions on the same topic. We will save answering questions specific to the resolutions until the relevant time.
However, those joining us online are encouraged to start submitting their questions now. At the time each resolution is considered, I will invite any questions specific to that resolution from the room and from online attendees to ensure that all shareholders are given a fair opportunity to ask questions. I will now summarize the voting procedures. All items of business will be voted on by poll, which I now declare open. If you did not cast your vote prior to the meeting and have not appointed a proxy to attend on your behalf, those attending online may cast a direct vote using the online platform or via the handset you were given if you are here in the room with us today. You may cast your vote at any time during the meeting. For shareholders attending online, please click on the voting icon and follow the prompts.
To cast your vote, simply select one of the options. Your selected option will change color, and your vote is automatically recorded. There is no need to press a submit or enter button. For those in the room with a voting handset, please cast your vote for each resolution using the handset. Use the trackball to highlight the resolution you want to vote on. You can vote by pressing the green square to vote for, the red triangle to vote against, or the blue trackball to abstain. Once you have entered your vote, use the blue trackball to scroll to the next resolution. For those voting online or in the room, you can change your vote at any time up until the time I declare voting closed.
I also confirm that where undirected proxies have been given to me as board chair, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display the votes received prior to the meeting on each resolution, but only after discussion on the resolution, if there is any, has occurred. I know that some disagree with that practice and want the votes received displayed ahead of any discussion, but our view continues to be that shareholders should not be discouraged from asking questions on any resolution due to feeling that their contribution or concerns will be moot based on the votes already received. The final results will be lodged with the ASX as soon as they are available following the conclusion of the meeting.
If you experience any difficulties using the online platform, the helpline number is displayed at the bottom of the online platform's homepage, along with other instructions on how to watch, how to vote, and how to ask questions. MUFG Corporate Markets and Lumi Technologies are acting jointly as the returning officer for this meeting. Now turning to the first item of formal business for the meeting, which is to consider the reports contained in the 2026 Qantas Annual Report and Sustainability Report, both of which were made available to shareholders in August. The Annual Report contains the financial report of Qantas Airways Limited and its controlled entities, the director's report, and the independent auditor's report. The Sustainability Report contains Qantas's climate statements and the independent assurance report. These reports have 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 Qantas's Annual Report and Sustainability Report for the financial year ended 30th of June 2026. Shortly, I will take any general questions or comments about the reports or any other general matters. As stated earlier, our auditors from KPMG are here available to answer any specific questions you may have about the conduct of the audits.
With that, I will now take questions from shareholders on the Annual Report, Sustainability Report, the Qantas Group's performance over the past year, or the auditor's reports. Let's start with a few questions from those in the room, and then we will move to those attending online. Those attending online who wish to ask a question and have not yet submitted one, please do so now. Those in the room who wish to ask a question, please move to one of the microphones. Number four.
Board Chair, may I please introduce Mr. Steiner?
Mr. Chairman, good morning. CEO, a very good morning. Both very welcome presentations, thank you. I am a shareholder, and I have questions about expenses. The Chief Executive referred to the sudden increase in fuel prices. My accent indicates I may not be an originally born Australian. I have lived here for 52 years. I am an Australian who was born overseas. However, I am watching North America vigilantly. My question to you, Mr. Chairman, and possibly the CEO as well, relates to the highest expense item in your annual report, which is fuel costs.
I appreciate that they rose absolutely unexpectedly, and you had to make adjustments, significant adjustments in your business. I am an optimist. Let us assume that during the calendar 2027 year, we will see reduction in fuel prices, not just flip-flops that affect the market, but serious and continuing reductions. If that occurs, how long will it be before Qantas will be in a position to respond to that, and as a long-term Qantas customer, that I will benefit through realistic charges on the price I have to pay to fly?
Yeah, well, it is a very topical question, obviously, in today's world. I think every $1 movement in a barrel of oil is a $50 million impact on Qantas, given that we use some 5 billion liters a year, I think. So, it moves daily. It is not something that we can look at over months and adjust. It is literally daily, and the team have done an exceptional job, I think, of hedging in advance.
We have one of the best derivatives teams I have ever seen in industry who manage the hedging programs. If it had not been for the success of the hedging that was in place, the impact would have been much worse, and we would have been over $1 billion if they had not had the hedging program that was in place. They are doing that again. We are well hedged now into the coming year.
To be specific, there are several components to the fuel price. The actual barrel of oil, which is what you see in the newspapers. There is also the refiner's margin, which is very significant and has actually moved to a greater degree than the spot price of Brent oil. And that has gone from averaging $15, $20 a barrel for many years to over $100. Now, as you can imagine, the impact that that has had on us.
So, all I can say is that we have got a super team who are extremely focused on managing through those changes and reacting very quickly, whether it is adjusting capacity, whether it is any other measures that the airline has to take. So, we are not immune. I think we have probably done better than many airlines have, and we have been impacted less than many airlines, thanks to the planning the team put in. But we're not immune, so it's very hard to tell you where we'll be in three months, six months, or wherever.
You've left me confident that I can relax a little bit and be confident that your company, our company, will continue to respond. I have a question with regard to income, and I note with great interest the comments that the Chief Executive made about customer loyalty and new routes, and that Qantas seems to have had some benefit with regard to Middle East transport. So, what I want to ask is, you haven't suffered as bad a reduction in passenger interest and performance. If conditions return to what I'll call normal, and you can define that how you will, you have new aircraft, you have new lounges, you have customer experience. Would you expect that there will be noticeable, significant growth in Qantas passenger travel, both domestically and internationally? I'm an international Qantas traveler.
Yes. Again, I can't read the future, but we were planning on a year of considerable growth this year, and we would have had such growth if it hadn't been for the events of the Middle East. Your comment on the Middle East is, it's a positive and a negative in that, obviously, some of the reductions from Middle Eastern carriers in their capacity coming into Australia and some reluctance from customers to fly through the Middle East have benefited Qantas.
But against that, it's our international flying that uses most of the fuel, so that's where the biggest cost impact has come, and it's disproportionately hit our international business over our domestic business. However, demand underlying remains stable. Even though, you know, we read in the papers every day about cost of living crises, et cetera, the demand for travel has held up remarkably well. I think once fuel does go back, like you hope, we also hope, but once that does happen, I can definitely see us returning to growth.
Thank you.
Number three, please.
Chair, may I please introduce David Brown?
Thank you, Mr. Chair. Firstly, just a comment or two. One was thank you to the CEO for taking those matters that I raised last year seriously. I appreciated that very much, and I enjoyed my subsequent trip to South Korea, which was much more relaxing and refreshing. Thank you. I must also say that your flights from Perth to Sydney and Sydney to Canberra yesterday were right on time, 5:00 A.M. and later in the afternoon. So, your information there is correct. I didn't pay the AUD 4,000 for a business class ticket, but I enjoyed my economy.
Vanessa was at the airport checking every flight yesterday.
I raised some issues in relation to Western Australia, seeing I come from there, and I noted pleasingly that you had opened that new facility in Perth, I think two months ago now. How many people will be actually working in that facility, and will that facility of training purposes, I believe, expand over the next few years? What is the timeline for the new Terminal 2 extensions, if it's called Terminal 2 at Perth Airport, going to commence work? How long will it be, and are you keeping any of the existing Terminal 3 and 4 facilities operational?
It's a lot of questions. You better have a go at that, Vanessa. Yeah.
We are very excited about the investment that we are making in Perth, both the training facilities, and also the investment in the new terminal. The training facility that we opened, probably, you know, a couple of hundred people will be employed in that facility, but over 1,000 group employees will be trained in that facility. The reason why it's such an exciting opportunity for us is this is the first time in the group's history that Jetstar and Qantas employees come together and train in the same facility. We think that this is such a wonderful opportunity to create bonds, and deepen our culture across both Qantas and Jetstar. Our people now don't have to travel to the eastern states for training, and they can do that in Perth.
That is good for our people, but it is also good for our business because it actually costs us less. So, that investment has been incredibly important, and it comes because of the fleet renewal that we have been talking about for Jetstar and Qantas. Perth, over the coming years, is going to be the biggest beneficiary of that investment. Perth, in time, will become our second-largest airport hub on the Australian continent. That is because these new aircraft that are coming have got a range and a capability that will enable us across Jetstar and Qantas to open new routes up into Asia from Perth, into India, potentially more services into Europe, and also into Africa. This is such an important part of our growth story that we have talked about.
Therefore, the investment in the airport that we are working with Perth Airport will come online, a consolidated international and domestic terminal connected across the other side of the terminal. We will ultimately leave T3 and T4 precinct when that terminal comes online, which should be towards the end of this decade, around 2030. We have started. The new runway has started, and also the build of the new terminal has started.
Thank you very much indeed.
Great. Have we got Oh, yes, number one, please.
Board Chair, may I introduce Mr. Fraser?
Thank you. Thank you, Chair, for making it possible for us to ask questions. I would just like to comment on the point of high customer satisfaction. I was very pleased to hear that that is going so well. I have two points and a question, two short points. One is, in 2024, my wife and I traveled from Sydney to the U.K. by an A380, may I add. When we arrived at the airport, having been unfamiliar with the latest technology and stuff introduced there for some years, we were delighted to find a very kind ground support person who just took us through everything. You got no idea. I would have liked to have thanked her in writing, but I never got around to it. Anyway, that was terrific.
The other point is that a Qantas pilot was saying to me the other day that cabin crew are the unsung heroes of Qantas. There are just two areas that are not people flying the aircraft as such, but shows the customer support. I guess this is a reason for such customer support. My question is, how is customer support actually assessed by the Qantas system, please?
Well, firstly, thank you for your nice comments. It is really good to hear from people who have actually experienced it. I think Vanessa alluded in her short speech that on-time performance and also our Net Promoter Scores and satisfaction are at like seven, 10-year highs, which have come, and our RepTrak, our reputational brand has improved up nearly back to where it was before things became difficult. So, there is huge progress being made there. Those are all measured by well-established international methodologies.
The RepTrak overall, that is an independent organization that measures brand reputation. In terms of the Net Promoter Score, every time you have an interaction with Qantas, you will be asked if you would be willing to give a few comments and whether you would rate the outcome of the discussion that you had. We try to measure both the actual experience that you have individually, as well as the general perception of how good a job or bad a job that we are doing. It is a very detailed and comprehensive system. Well, I do not see any more questions in the room right now. Alex, have we got some online ones?
Yes, Chair. The first online question is from Mr. Errol Montero , who asks, "What plans does Qantas have to balance growth with stability, as Qantas shares seem to be extremely volatile?
Yeah. Well, look, that is a super question. That is one that we all spend a lot of time on. Airlines, unfortunately, are notoriously cyclical. I think it was Warren Buffett who said that the industry collectively has not made money since the Wright brothers, but if you pick the highs and lows, you can make a fortune. That is a slightly flippant comment, but it is hardly more than a few years ever goes past without a fuel crisis or a COVID or something like that, which disproportionately hits airlines. That is why airline stocks are as sensitive as they are. What we have been doing is to work really hard to establish more of an industrial company profile, a more dependable outlook.
The main components of that are to sustain low debt, which again, some airlines leverage themselves up, but some airlines go broke as well, and we are not going to do that. So we keep conservative debt levels. At the same time, we are committed to paying a dividend. Again, some airlines pay a dividend in a good year and not in a bad year. We are trying to move to a more industrial company-type profile where you can depend on a dividend every year, barring some terrible disaster, of course, but in the normal course of events, you can. So we are trying very hard by some of those measures to make Qantas, we will still be an airline, we will still be cyclical to a degree, but much more dependable than it has been in the past.
Chair, the next online question is from Mr. Chad Waldock, who asks, "When will Qantas open a long-haul cabin crew base in Perth?"
Well, I think Vanessa's just sort of basically answered that. Is there anything else we need to add on? I don't think there's any plan immediately for-
Well, I think the only thing I would say is that we are going to grow in Perth. We're opening up a new terminal, and we will constantly assess where the optimal place for us to have crew bases, whether that be Qantas or Jetstar, and it'll be something that we continually evaluate as we grow.
Thanks, Vanessa.
Chair, the next online question is from Mr. Alejandro Martos, who asks, "Are there any plans to resume the Dividend Reinvestment Program, DRP, anytime soon?
Thank you. We look at that every year when we are discussing and considering the dividend that we will pay. There are conflicting views on that. Some people like it, some people don't and prefer to make their own decision. At this stage, we are not planning to do that, but shareholders obviously have the ability to reinvest their dividend themselves.
Chair, the next online question is from Ms. Sylvia Sharp, who asks, "When are shareholders going to receive access to reduced fares?
There are no plans to do that, but you did hear from Vanessa that over half, I think, of Jetstar's fares today are below AUD 150, and some as low as AUD 29. That is, if I digress for a minute, it is absolutely extraordinary. In the 1980s, when I worked at Ansett, the airline industry then, a one-way flight from Sydney to Melbourne was AUD 300- AUD 500. Today, you can do it for under AUD 100, and that is in nominal dollars, not inflation-adjusted. That is actual nominal dollars. So, it is far cheaper today to fly to Melbourne than it was back in the 1980s when I joined the industry. So, I think as an industry, we have made travel affordable for everybody at a scale that no one would have ever guessed was possible in those days.
Chair, the next question online is from Mr. Max Najjar, who asks, "As a travel agent, it is difficult to represent customers in disputes with Qantas. Some disputes take far too long to resolve. How does the board determine whether a consumer dispute should be resolved promptly rather than prolonged through costly ongoing legal and administrative processes?"
Mr. Najjar, I think this refers to a specific matter that has been ongoing and has been the subject of extensive correspondence for some while. I do not really think it is applicable for me to, or it is appropriate for me to go into any detail here. I would just comment, obviously, travel agents are a critically important group of partners for us. Like any well-run organization, we do our very best to resolve disputes and issues as quickly as we possibly can. This particular one has a lot of background and history to it that I cannot go into here.
Chair, the next online question is from Mr. Ewan Davies, who asks, "Why does the group keep getting into trouble with staff pay problems?
I would say we do not keep getting into trouble with staff pay problems. The industrial relations landscape at Qantas is very complicated. We have over 50 EAs, enterprise agreements, and I think we have resolved 12, I think, Catherine, this year. Sometimes they are hard battles to get there. What I can say is that, I have had a lot to do with the union movement over the years and retain contacts with a lot of them. While we will never agree on everything, I think there is now a dramatically improved relationship than there was some years ago. I think both sides respect each other and try to arrive at sensible, pragmatic, practical solutions for both employee and the company. The company has to watch its costs, it has to manage an airline in a very difficult environment.
Employees, obviously, they have bills to pay, cost of living, et cetera. So, it needs a really cooperative effort on both sides to get there. While there will be the occasional issue, I think we are in pretty good shape there. Also, I would say that some of the industrial action that you read about at airports and things is actually not Qantas. It could be the security staff and others like that, and we sort of get caught up in that.
Chair, the next question is an audio question from Nikitha. Nikitha, please go ahead.
Thank you, Chair. India is now Australia's largest overseas-born community and a key Qantas growth market via Sydney-Bangalore. Single-name passports with no surname are standard ICAO documents across India and Indonesia. Yet in October 2026, NCAT case, Qantas admitted its mandatory booking rule for single-name passports caused airport kiosks to reject those passengers.
Despite knowing all the passenger details in advance, including the fact that they carry single-name passports, Qantas directs Sydney Terminal 1 economy passengers into kiosks guaranteed to fail them, where staff desks are not easily visible and the flow of health has had no queue since 2018, leaving elderly passengers waiting 84 minutes, and Qantas argued they could use the business class counter as a last resort. I have two questions, Chair. Why does Qantas funnel passengers into kiosks if known in advance will fail them, with no visible economy desk or structured queue? Is the business class counter genuinely Qantas' fallback policy for rejected economy passengers, and will you commit today to reviewing that case and process?
Okay, look, I think I got all of that. As far as I am aware, this relates to a specific incident that occurred in the past where, particularly due to enhanced security these days, part of the security measures are to match the name in passports to bookings, et cetera. I have had that trouble myself with putting a grandchild's nickname in rather than the real name, and that causes a problem, but that happens in life. I am aware of some of the background of what you are referring to. Obviously, we do our very best to have personnel on hand, whether you are traveling in economy or business, to help in those sort of situations. I hope that will not happen again, but that is real life. Vanessa, did you want to add anything to that?
No, I think that, as you say, the security and the passport rules that we adhere to across the network can be complex. I think on this specific item, we will look into the specific event and make sure that we are making the process as seamless for customers as possible.
Thanks, Vanessa.
Chair, the next question is an online question from Mr. Stephen Mayne, who asks, "Did the Chair read Alan Joyce's book, and what did he think of it?" "Were there any jarring public disclosures that he would have preferred were kept secret? In terms of it being an interesting and insightful read, did he find it more illuminating than Joe Aston's earlier book on Qantas called 'The Chairman's Lounge'? Also, did CEO Vanessa Hudson learn much she did not know reading Alan's book? Can she give any examples?
Are you serious? I have to confess, I have not read Alan Joyce's book, and I actually don't intend to. When I became Chair, along with some of my colleagues, knew the past was a big issue. We acknowledge that. We have learnt lessons. We have made many, many changes. Today, we're looking forward, so I'm really not looking back. I'm not interested anymore in looking back. For past players to reinvent things and rehash over, go back over old ground, it's, I think, a complete waste of time. I don't intend to pay any attention to it. We're focused on taking Qantas forward. I don't know if you want to comment on whether you read it or not, Vanessa. Fine. Thank you.
Chair, the next question is an online question from Mr. Gary Mares, who asks, "Chairman, this morning you confirmed total unit revenue is still 8%-10%, loyalty 5%-7%, and FY 2027 CapEx now at the lower end of the AUD 4.3 billion-AUD 4.6 billion guidance. The only change is the first half 2027 fuel up to circa AUD 3.75 billion, with 85% hedged. If CapEx is underspending and revenue is up, why is the AUD 150 million buyback still canceled? Will the AUD 115 million gain from selling your one-third share of Jetstar Japan be returned to shareholders?
You commented on the first half, but the year is made of two halves. We still got to get through the rest of the year, and we have projected very high fuel costs through to the end of the year. We don't know where that's going to go. All we can do is base our budgeting on the forward fuel curve in the markets, and that may be better or worse when we get to the end. We are also, as I tried to mention earlier, very focused on our financial framework of retaining low levels of debt, paying a dividend, as well as committing to the most extensive refleeting of new aircraft in the company's history.
We have a new airplane arriving every two to three weeks for many years to come. In that light, given that earnings have been less than we would have hoped or would have been the case without the fuel, we felt it prudent to preserve the liquidity that comes from the two events that you mentioned, and to make sure that we can continue to respect our balance sheet and pay those dividends.
Chair, the next question is an online question from Mr. Robert Blair, who asks, "Qantas has neglected Adelaide for international services over the years. I note that services to Auckland have resumed, but when will Qantas add more destinations? I would have thought that given the popularity of Japan services from Adelaide to Japan should be viable, and there may be more destinations in Asia.
Thank you. Thank you. You ready for me?
Sorry, you go. Yeah, yeah.
Yeah, thank you for that question. It has been, as you say, over, I would say, a decade, the competition that has been faced from the group in Adelaide has resulted in us not being able to maintain a broad international network out of Qantas. A lot of that poor performance was driven by having the wrong aircraft in the fleet. Also, as we look forward with new aircraft coming, particularly the A321XLR and the A220, as we get more of these aircraft, this is going to give us choice to be able to look how to best deploy those aircraft across our network.
We are delighted to have been able to put the A220 on Adelaide connecting New Zealand, and we see that there could be opportunity in the future. But as John was saying, we need to be very focused on the fleet renewal, because having the right aircraft on the right route with the right configuration is the most important thing that we can do to sustainably grow and re-enter markets like Adelaide.
Thanks, Vanessa.
Chair, the next question is an online question from Dr. Peter Lynch, who asks, "Is Qantas committed to net zero greenhouse gas emissions? Can you reassure shareholders that Qantas is pursuing all best practice possibilities to lower what are very high aircraft emissions of greenhouse gases? Is Qantas involved in researching alternative aircraft fuels or relying on purchasing new aircraft with improved fuel efficiency?
So, an emphatic yes. We have short-term and long-term goals. First one was to reduce our scope one, scope two emissions by 25% from a 2019 baseline. I think we're halfway through that. What is really difficult in the aviation industry is there really are not alternative fuels available today at an affordable price. You'll hear a lot about sustainable aviation fuel, SAF, and that's where everybody wants to get to, but today, there isn't sufficient production of it. If you can buy it's two to three times more expensive than ordinary aviation fuel. We've, I think, done a pretty good job. We've doubled our consumption up to 1.1% of our fuel, but it's still very small, obviously. What it needs is a three-way engagement by government, producers, and by the user, being airlines.
Unless there's adequate feedstock grown to produce it in the first place, then we're not going to be able to buy it. People won't grow it unless they know they're going to get paid for it. An airline cannot afford to put its fares up by the level of cost that would be implied. It's going to need support from government. It's going to need increased growing capabilities and some cost offsets. We're working towards that. I think everyone knows where we want to go. We're working with the federal government, looking at perhaps some level of mandated amount of SAF that you need to maintain to operate in and out of Australia. That's complicated because foreign airlines won't have the same rules as us.
If they've got a different access or availability to fuel in their part of the world, and it's a different price to ours, it no longer have a level playing field, et cetera. It's a very difficult conundrum. I think we'll definitely get there. China is ramping up production of SAF fuel at a high rate of knots. In a few years, it'll be available and hopefully at a price that we can all afford. Today, that's still very difficult. The second part of your question, I think, was other alternative fuels. You'll hear and read about hydrogen, you'll read about electric aircraft, but to date, neither of the major manufacturers have any credible plan in the short to medium term to produce aircraft capable of doing that. I'm not an expert.
Others know more than me, but the problem with hydrogen is the amount, in particular, the amount of hydrogen you need to carry means that you wouldn't have any room left for passengers. Electricity, electric aircraft, I think you will see air taxis carrying maybe five or 10 people from airport connections or things, but there's no realistic chance of an electric aircraft being built to carry 350 passengers for 13 hours. It's a very difficult space, evolving space. A lot of smart minds applied to it, but it's not going to be resolved anytime soon.
Chair, the last question online is from Mr. Philip Stack, who asks, "I have always been proud to fly Qantas and have valued the reputation it has built for quality and service. I would like to make it clear that I believe the cabin crew and their onboard service are generally fantastic. My concern is more about the overall passenger experience, particularly the cleanliness and tidiness of aircraft cabins, the presentation of the onboard environment, and increasingly, the quality of the food being served.
There appears to be a growing commentary, particularly among younger travelers and travel reviewers on platforms such as Facebook and YouTube, that the overall experience is not quite living up to the Qantas name and the standards people have traditionally expected. My question to the board is, what is Qantas doing to address these concerns, particularly around cabin presentation, cleanliness, and food quality? How is Qantas ensuring that the overall onboard experience continues to reflect the quality and reputation that the airline has worked so hard to establish?
Yeah. Thank you. Thank you for the question. Firstly, I would say that while, unfortunately, there are always going to be someone who has a bad experience from time to time, the customer satisfaction scores that we are receiving are an opposite to the trend you mentioned. They're hitting all-time highs. So, I think people generally are seeing that we're making improvements. But what we've been talking about for the last hour is the main driver or answer to your question. If it's a 30-year-old aircraft or a 20-year-old aircraft, it's never going to be as smart and modern and clean as a new one. And although we are refurbishing some of the older ones that are still going to have some years of service, we're also bringing on brand new aircraft at an extraordinary speed, as I think I mentioned before.
And you're right, the cabin crew are the front line, and they are absolutely what the customer sees, and we're very proud of them. They do a super job. But they're human too. If they're on an old airplane that's not. Maybe the seat doesn't work and something, they're never going to be as positive as if they're on a brand new airplane where everything's sparkling clean. It lifts all of our spirits. So, I think the refurbishment, the rolling out of things like Wi-Fi that was always a customer irritation, and the brand new aircraft being delivered every two to three weeks is going to materially lift our reputation to another level again.
Chair, there are no more online questions in this section.
Okay, good. I think we got a couple from the floor. Number one.
Board Chair, may I introduce Mr. Bubear.
Good day, Chair, board members. First, I want to say and echo what people have said is, I've been fortunate to fly quite a lot with Qantas this year, and the service by the staff, unbelievable. So, thank you for that. My question, and it's not a flippant one, is, has Qantas considered the introduction of a shareholder tier? Not to introduce discounted fares, but aligned to, say, Gold or Platinum Qantas Frequent Flyer benefits, because I found having recently moved from Gold to Platinum, it maximizes time, provides additional benefits, and something as small as that when you're traveling frequently, either domestically or internationally, is a real saving. Just something to consider. Thank you.
Yeah. Thank you. We take that on board. We've got, I think, one of the very best loyalty programs in the world. They're constantly revising it. I think there was an announcement this morning about extending status credits to non-flying inputs. It's reviewed all the time, so I can't say yes or no, but certainly, I hear you. Number three.
Chair, may I please introduce Mrs. Morton?
I'm a bit shorter than that. Good afternoon. My question is also related to customer service that somebody asked earlier, when you talked about customer satisfaction. I've been a Qantas Frequent Flyer member for about 30 years and a platinum member for quite a few years, but in my experience, it's never been more difficult to get Classic Reward flights in anything other than an economy cabin. I'm wondering if that factors into the assessment of customer satisfaction.
Well, to the last bit of your question, yes, if somebody's dissatisfied, that will go into the satisfaction score. I think that the loyalty program has taken some substantial steps, including increasing the Classic Plus and other changes made to give more seats. The reality is, we could fill every single airplane every day with reward passengers and not get any revenue. Conversely, you could fill the aircraft with fare-paying passengers and not have any room for points redemption.
So, it's a delicate balance that I think the team manage very well, and we're very conscious of the difficulties, particularly in going to Europe in the European summer. That's when everybody wants to go to Europe. So, we have to be judicious as to how we balance the supply and demand for those seats. Unfortunately, you are not always going to be happy, but I think they have made some very substantial improvements in availability just recently.
I do not know that I necessarily agree with that, because as I have said, I think it has never been more difficult. Pre-2020, it was really quite easy to get flights released. To be frank, Classic Plus is really just a waste of points because the dollar-to-point ratio is just not worth it. It is not something that I would ever do. I am sure some people do. As a shareholder, I obviously understand the need for revenue and for paid flights. But I was just wondering if there is any plans to improve. Even, as I say, as a platinum member, we can ring up and we can ask for flights to be released, but I think my strike rate there is about 20%.
Yeah. Well, without my Qantas hat on, I am also platinum, and I have had similar issues to yourself in finding seats, so it is real. I get that. But I think the team are very diligent in trying to balance the amount of capacity that is there. There are some times of year where there is a lot of capacity, and unfortunately, the peak times are the challenges, and that is when most people are asking. Vanessa, do you want to add any numbers to that or?
Oh, I would like to say thank you for your feedback. I think it is really important, and we do listen. We spend a lot of time with our platinum and Platinum One, and also all of our member and getting feedback around availability. We know how much value is placed in classic redemptions, and we constantly are looking at access. The one thing that we have done this year, and if you have not seen it, have a look, we have invested in a significant new online engine because classic redemption seats are not just available on Qantas flights. They are available on Jetstar flights, and they are available on hundreds of our partner airlines.
The investment that we have made is in a new booking tool, an engine online that gives a customer every single Classic seat available across not just our network, but our partner networks, and a much easier way of being able to find where those seats are at any point in time to any destination at any time of the year. That launched in March, and I think it is a really important part of the tool because as we grow our Qantas Frequent Flyer program and membership base, we are increasingly going to be looking to our partners to be able to help in satisfying that demand, in addition to Classic Plus, obviously, as well.
I have had another question, nothing to do with customer satisfaction. It was in relation to the direct flight to London that launches in October. Does that replace QF1 and two, so that flight will still exist?
Yeah.
No, but Vanessa, do you want to-
Yeah, it doesn't replace the QF1 and two. There might be changes to naming conventions of the flight, but we see that through runner, through Singapore, is a really important and valued part of our network to many of our customers. Adding the direct service from Sydney to London will be over and above that.
Thank you.
Thank you. Anyone? Yes, number four.
Chair, may I please reintroduce Mr. Steiner?
I'm so glad I come to these meetings. You learn so much.
So are we.
My question, particularly, I suppose, is to the presentation by the chief executive, relates to AI. AI is very complex, and it changes things almost without any teaching. You have to figure it out. With regard to the airline, I'm wondering what areas of your operation have the greatest AI impact. Questions relate to the whole reservation system, and that is customer experience, to the cockpit staff, who I'm sure receive benefits of AI in terms of route planning, and changes that may happen. The second bit of AI relates to security. We're finding almost regularly stories about how artificial intelligence, if it's used to break into this, to get access to that. I'm interested in, when I'm in the air, I can be confident that I'm going to stay there until I'm scheduled not to be in the air.
When I'm a customer with Qantas and I'm paying for things, I want to make certain that my payment details stay with you and nobody else. Before you answer the question, I want to go back to the previous comment about Qantas Frequent Flyer points and Classic. I've traveled in the United States. I use Qantas Frequent Flyer points to access one of your major alliance partners there. It works all the time. When I fly Qantas, I've been smiling when I get upgraded. It happens on that 16, 17-hour flight between Dallas and Sydney. That's the time you really want to enjoy the benefit of that. I just want to pat you on the back for that, but I need an answer to the AI question.
Okay. So, look, I think the Qantas Frequent Flyer topic we have exhausted. On the AI question, look, there is obviously no doubt in anyone's minds that every single one of us in this room are going to be impacted by AI one way or another, hopefully positively. But it is the most extraordinary evolution of technology at a speed that no one has seen before. We obviously are, as a large corporation, in the forefront of that. I think, firstly, I would say that AI is probably particularly good at this stage in managing huge amounts of data and drawing out learnings, improvements from that. And airlines have more data than most people, as you referred to, booking systems, maintenance. Every aircraft has extensive maintenance programs all being carried out, and AI is already proving dividends, showing dividends there in streamlining those procedures.
Reorganizing flight, if there is a flight canceled or there is weather or something, that does not just affect that one flight, it affects others, where that aircraft is going, multiple passenger movements, et cetera. AI is proving very helpful in reorganizing and coming up with a solution in a flash, where it would take a human schedule of some hours to do. So, there is probably hardly an area of our operations that are not being impacted by AI one way or another. On the security side, I think we heard, Vanessa Hudson, you told us just yesterday in the board meeting that last year we had 2.3 million attempted attacks per month. This year, it is 2 billion attempted attacks per month on the airline system. I think that was the right figure.
Yeah.
Which is scary, and it is hard to even get your head around that level of attack. AI will obviously play a huge role, unfortunately for bad actors, but a huge role for companies to defend themselves. So, we can never say never. I do think we have spent a lot of time investigating and listening to people who have deep levels of knowledge. Our understanding is that when in the air, the aircraft, those systems are pretty well isolated from the ground. So, it is very, very unlikely that we would have a malicious actor doing something with an aircraft in the air.
But again, nobody, I think, in this, it would be hubris to say that we are not immune to attacks. It is far more likely that we will be attacked in areas to mess us up, reservation systems or, as the cyberattack we had recently. But we are spending a huge amount of time, money, and effort on trying to stay as current as we possibly can with technology as it evolves. Pleasure. All right. I think that is exhausted the questions. Alex, there is nothing more online?
Nothing further online, Chair.
Excellent. All right. Well, thank you, everybody, for your questions. Really appreciated that and enjoyed the debate. If there are no further discussion on the reports, I will now move to the next item of ordinary business. The second item of formal business for the meeting is the election and re-election of your Directors. Alison Watkins offers herself for election at today's meeting. Belinda Hutchinson and Tony Tyler will be offering themselves for re-election today, pursuant to the Qantas Constitution and the ASX Listing Rules. The notice of meeting in the 2026 annual report contain details of the background and experience of those up for election or re-election, and each Director will address you shortly in turn ahead of the voting on their respective resolution. To kick off, I have the pleasure in moving the election of Alison Watkins.
Alison was appointed to the Qantas Board in March 2026 as a Non-Executive Director. She's also a member of the Audit Committee and a member of the People and Remuneration Committee. The Board believes that Alison has outstanding leadership experience across some of Australia's largest and most complex businesses, as well as the invaluable experience of helping to set Australia's monetary policy with the Reserve Bank. I'd now like to invite Alison to say a few words.
Thank you very much, John. If I could just apologize for my voice, I don't normally sound like this. Hopefully it'll get me through these brief remarks, but if not, my trusty colleague Kate Towey has agreed to take over. It's a privilege to be here and to seek election to the Qantas Board, and I thank the Board for formally nominating me for the position of Non-Executive Director. Many of you, I think, will remember James Strong, who led Qantas through its merger with Australian Airlines and its float in the mid-1990s. I actually had the opportunity to work alongside James on the Woolworths Board for quite a few years, at a time when he was also Chairman of Qantas. Like many, I admired and respected James. He was approachable and down to earth.
He always spoke about Qantas and Qantas people with pride and affection. Through James, I came to understand what Qantas really stands for, everything that Qantas means to Australians, and the responsibility that comes with this. Serving as a Qantas director is a responsibility that I would be honored to take on. Much of my career has been I'm going okay, aren't I? I might have a drink of water.
You're doing great.
Thanks. Yeah. Much of my career Okay, Kate.
I'm delighted to share Alison's remarks with you in her voice. Much of my career has been spent leading and governing large Australian businesses with complex operations, like Qantas. My rural and regional connections give me a strong appreciation of the vital role Qantas plays for these communities. I currently serve on the boards of CSL and Wesfarmers, as well as holding the role of Chancellor of the University of Tasmania. Until earlier this year, I was a member of the Monetary Policy Board of the Reserve Bank of Australia.
Through these roles, I stay close to what's happening in the economy and with the consumer, as well as the broader geopolitical and technology forces shaping our future. I believe the Qantas Group is in a strong position under Vanessa's leadership and with the guidance and oversight of John and this board. Alison would like to thank you for considering her election.
Thank you.
Well done, duo. Great. Thanks, Alison. Thanks, Kate. I now formally propose the following ordinary resolution that Alison Watkins AM, a non-executive director appointed by the board with effect from 2nd of March 2026, pursuant to clause 6.5 A of the Qantas Constitution and retiring in accordance with the Qantas Constitution and ASX Listing Rules, being eligible, is elected as a non-executive director of Qantas Airways Limited. The board, with Alison abstaining, recommends that you vote in favor of this resolution. I will now take any questions on Alison's election, starting with those in the room. Any shareholder who has a question on the proposed resolution, move to one of the microphones. Looks like not, so you are spared another agonizing response, Alison. Are there any questions online, Alex?
No questions online, Chair.
Great. If there are no further questions, I'll now turn to the details of the votes received prior to the meeting. On the screen are details of the votes received in advance of the meeting in respect of Alison's election. For those voting today, please cast your vote now if you haven't already done so. So congratulations, Alison, and may you get better very soon. Thanks for making the effort for us, and it's very difficult. Great. The next item is the re-election of Belinda Hutchinson, as detailed in the notice of meeting as item 2B.
Belinda was first appointed to the board in April 2018. She's chair of the Audit Committee, a member of the Safety, Health, Environment, and Security Committee, and a member of the Nominations Committee. The board believes Belinda's extensive background in the financial services industry, together with her experience as a professional director, enables her to make a considerable contribution to the board. I'd now like to invite Belinda to say a few words.
Thank you, John, and good afternoon now. I think it's afternoon, fellow shareholders. As John and Vanessa have highlighted, this past year, Qantas delivered world-leading operational performance, a substantial lift in customer satisfaction, stronger employee engagement, and a strong profit result, which supported the dividend which was paid to you, our shareholders. That was achieved in a very difficult environment, with geopolitical events driving record fuel prices and disrupted schedules. The credit clearly belongs to the management team and Qantas employees right across our network. It has been a real privilege to be part of the board supporting them. I'm seeking re-election because the work ahead matters, and I believe I can continue to contribute to the board and management to get it right. Qantas is undertaking the largest fleet renewal in its history and launching Project Sunrise.
Together, these will shape the company's financial performance for many years to come. The fleet renewal involves major financial commitments, which I'll address shortly. Project Sunrise promises to overcome the tyranny of distance that has long challenged Qantas as the most remotely based long-haul carrier in the world, and its full strategic value will emerge as the program rolls out. Both will be delivered against an uncertain geopolitical and economic background, and rapid technological change, including AI, which brings both risks and opportunities. As a global business, aviation feels those pressures more than most. In helping the board weigh these matters, I draw on a career spanning consulting at Accenture, investment banking at Citibank and Macquarie Group, and more than 25 years on boards of some of Australia's largest customer-facing companies.
Just as importantly, eight years on your board have taught me a great deal about this industry, and that knowledge I can continue to bring to the board's determinations. As Chair of the Audit and Risk Committee, I work closely with management and my fellow directors to oversee financial risk, guided by the financial framework which John outlined earlier. Risk management sits at the core of every successful business, and nowhere more than in aviation. We cannot eliminate risk. What we can do is try to reduce it and limit the consequences when risks do eventuate. That is the committee's work, and that is work that I remain committed to. I also serve on the Safety, Health, Environment, and Security Committee.
Alongside my fellow committee members, I am focused on careful oversight as we bring new aircraft and routes into service, step up the training of our people, and respond to the growing security issues facing the global industry. This will be the last time I stand for re-election, and I thank you for the opportunity to serve on this board for the last eight years. Qantas matters to Australia, and it matters to me, and I seek your support in continuing to contribute to your company. Thank you.
Thank you, Belinda. I now formally propose the following ordinary resolution, that Belinda Hutchinson AC, a non-executive Director retiring in accordance with the Qantas Constitution and ASX Listing Rules, being eligible, is re-elected as a non-executive Director of Qantas Airways Limited. The board, with Ms. Hutchinson abstaining, unanimously support her election and recommend that you vote in favor of this resolution. I will now take questions on Belinda's re-election. Any in the room? Yes. Number one, please.
Mr. Chair, may I please introduce Mr. Bathor?
Good afternoon, Chair. My question is not a commentary on either of the candidates, but a general question relating to tenure. The ASX Corporate Governance Principles, et cetera, stipulate that, well, don't stipulate, but suggest that people on a board for more than 10 years, this compromises their status as an independent director. A number of companies in the ASX, of course, have tenure limits, nine years typically. And of course, all the financial organizations, such as banks, are mandated to have these tenure limits. Does Qantas have tenure limits? If not, why not?
Yeah, good question. No, we don't. But I would say we have a general principle that a director will normally do three times three, nine, to your point, and that we will continue to guide as a framework. However, as always, there can be variances to the rule, and there's several reasons why we're very keen for Belinda to stay on. Firstly, she's an outstanding director. Secondly, she does an extremely good job of chairing the Audit Committee. But also, most of us are very new, so there's been a huge amount of renewal at Qantas, both in executive and board ranks.
And just having a little bit of corporate memory from one or two people who've been here a little bit longer, I think is very wise. And Belinda can frequently comment on things that none of the others of us were there for. I think it's well worth making an exception in this instance and asking Belinda to do another term. Nothing more in the room by the looks of it. Alex, anything online?
Chair, there is one question online from Mr. Stephen Mayne, who asks, "Why didn't we disclose the proxy votes to the ASX along with the formal addresses, which is what the Chairman does at Brambles? It allows for a more fully informed AGM debate and provides more timely disclosure to the market. Did any of the proxy advisors recommend a vote against any of the directors up for election today, and did this lead to any material against votes? If not, well done on stabilizing the board in terms of shareholder acceptance of its current composition. Also, as one of our longest-serving directors, is Belinda Hutchinson intending to serve a full three-year term?
Okay, there are a few questions in there, if I remember correctly. Firstly, I think we commented earlier on why we do not disclose the proxy reports and votes in advance, and there are views both ways. There is no right or wrong. I think we have landed on the fact that if a shareholder wants to ask questions and feel they can influence the debate, if they are looking at the votes up on the screen saying 95% or 99% in favor, then there is a feeling they might feel, "Well, what is the point of even discussing it because it is a foregone conclusion?"
That is why we do not put them up in advance, but I get that there is a body of thought the other way as well. Your second question, no, none of the proxy advisors recommended against the appointment or reappointment of any of the directors. We elect for three-year terms, so Belinda is reelected for a three-year term, and she may well choose to vary that during the course of the term, but she is elected for a three-year term. I hope that answers the question. Looks like no more in the room. Alex, anything else online?
No further questions online, Chair.
Great. If there are no further questions, I will now turn to the details of the votes received prior to the meeting. You can see those on the screen now, the detail of the votes received in advance of the meeting in respect of Belinda's reelection. For those voting today, please cast your vote now if you have not already done so. Congratulations, Belinda. The next item is the reelection of Tony Tyler, detailed as item 2C in the notice of meeting.
Tony was first appointed to the Qantas board in October 2018. He is Chair of the Safety, Health, Environment, and Security Committee and a member of the Nominations Committee. The board believes that Tony's depth of experience in the global aviation industry, including senior executive leadership roles and service on airline boards, together with his deep understanding of Asian markets, enables him to continue to make a significant contribution to the board. I would now like to invite Tony to say a few words.
Thank you, Chair, and thank you to our shareholders for the welcome today. It is a privilege to be here in Canberra for another Qantas AGM and to seek your support for my reelection to the board. This past year has tested airlines all around the world. The conflict in the Middle East saw the price of jet fuel double and forced carriers to act quickly to manage the impact while keeping their customers and people safe. I spent more than 40 years in aviation, including as Chief Executive of Cathay Pacific, and today I sit on the boards of Bombardier, BOC Aviation, and Trans Maldivian Airways. With these roles, I bring both experience and diverse insights, which provide perspective to the challenges and opportunities facing aviation.
I know how quickly conditions can change and how hard it is to respond while maintaining operational performance, and I think this experience is valuable in my role as a member of the board. I want to acknowledge the work our frontline teams have done over the past two years in particular to lift performance across our business. We are seeing it in the operational, customer, and reputation results, and I hear it in the conversations I have when I travel here.
That improvement is a credit to our people, including Vanessa and the management team. They are committed to building on it, and so is the board. Qantas holds a place in this country that very few airlines hold anywhere in the world. Keeping the trust of our customers, our people, and our shareholders is work that never finishes, and I would welcome the opportunity to keep contributing to it. I respectfully ask for your support for my reelection. Thank you.
Thank you, Tony. I now formally propose the following ordinary resolution, that Antony Tyler, a non-executive Director retiring in accordance with the Qantas Constitution and ASX Listing Rules, being eligible, is reelected as a non-executive Director of Qantas Airways Limited. The board, with Mr. Tyler abstaining, unanimously support his reelection and recommend that you vote in favor of this resolution. I will now summarily take questions on Tony's reelection. Might start with any in the room. I don't see any. Alex, anything online?
No questions online, Chair.
Great. Thank you. If there are no further questions, I'll now turn to the details of the votes received prior to the meeting. On the screen are such details of the votes as received in advance of the meeting in respect of Tony's re-election. For those voting today, please cast your vote now if you haven't already done so. Congratulations, Tony. Before considering the remuneration-related resolutions, we'll hear a few remarks from Dr. Nora Scheinkestel, who is Chair of the People and Remuneration Committee, on Qantas's approach to remuneration and this year's remuneration report. During her address, Nora will specifically deal with the remuneration-related themes emerging from discussions with shareholders and the questions submitted in advance of this meeting. I'd now like to invite Nora to address the meeting.
Thank you, Chair, and good afternoon, everyone. As John indicated, I will speak briefly about resolution three, the remuneration report, and I will also address the long-term incentive grant to our CEO, Vanessa Hudson, in resolution four. Our remuneration structure supports our business objectives. Put simply, pay should follow performance, and it should reflect the experience of our shareholders, customers, and employees. We set clear measures at the start of each year to capture this, but formulas don't always give the right answer. At the end of the year, the board must stand back and assess if the scorecard results appropriately reflect this principle, and if not, use its judgment. Sometimes that means reducing pay. Sometimes it means recognizing results that the formula would disregard. This year, we did both, and I'd like to explain why.
As the Board Chair and CEO have said, this was a strong year in a difficult environment. The conflict in the Middle East drove fuel costs sharply higher. In gross terms, as John mentioned, the fuel crisis had an impact of over AUD 1 billion on the group. Through our well-established and active hedging program, management reduced this impact by AUD 400 million, and then through further management actions, network changes, adjusted capacity, and raised fares, they further reduced the hit by approximately AUD 200 million to an impact on profit of about AUD 420 million, delivering an underlying profit before tax of just under AUD 2.1 billion. They did this while also delivering for customers. Again, as you have heard today, Qantas Domestic had its best on-time performance in seven years and its highest customer satisfaction in a decade.
Our reputation is back in the strong category, as measured by our RepTrak score, and employee engagement rose to 72%, though we know there is more to do. Let me now turn to how that played out in the short-term incentive scorecard. Half of the short-term scorecard is allocated to underlying profit. Threshold and target hurdles for this metric in FY 2026 were set above the previous year levels well before the Middle East war began. Over the first three quarters, the group's performance was in line with or ahead of target before the closure of the Strait of Hormuz materially affected the fourth quarter. As I said earlier, the gross increase in fuel costs, which then hit the group, was in excess of AUD 1 billion, and management reduced this impact to AUD 420 million, while at the same time maintaining team engagement and industry-leading operational and customer experience.
The group delivered underlying profit before tax of AUD 2.064 billion, only AUD 36 million, or 1.7% short of the AUD 2.1 billion threshold for the group financial measure. Actual revenue and other income for the year grew over 7% to AUD 25.5 billion, and the group achieved record customer satisfaction and best on-time performance in seven years. Given that AUD 36 million, or 1.7% miss, on a strict application of the formula, 50% of the short-term incentive would not have been paid, even though the result was strong, both on financial and non-financial metrics, and management had materially mitigated the financial impact of the fuel shock. The Board considered that would not have been the right outcome. We specifically retained discretion so that at the end of the year, we can stand back and assess whether the scorecard appropriately reflects the year. We take in the totality of factors.
Here, the strong financial result, management's actions, the balanced scorecard performance, the very small miss to threshold, and our obligation as a Board to attract, retain, and motivate a high-performing management team. It would not have been in either the executives' or shareholders' interests to have zeroed out 50% of the scorecard, and it would not have been consistent with the objective of paying for performance. We therefore exercised discretion to award the threshold outcome, 25%, which we considered a proportionate response to a narrow miss driven by significant external factors. This is the first time that the Board has exercised positive discretion since the Board was reconstituted under now Board Chair John Mullen. We have shown we are prepared to exercise downwards discretion when required, having made material downward adjustments in the last two years, and again this year, which I will turn to now.
Safety remains a key priority, and as mentioned earlier, tragically, during the year, a contractor was killed in our freight operations in Sydney, and we again extend our sincere condolences to his family, friends, and colleagues. A full investigation was carried out, and safety improvements were immediately put in place following consultation with our employees and unions. We believed that no reward for workplace safety was appropriate in a year when a contractor lost their life at work, and we made that adjustment by zeroing out the workplace safety component of the short-term incentive scorecard, which amounts to 5%. On actual performance, it would have added 4% to the total scorecard result. Executives with more direct accountability for the area had more substantial downward adjustments made to their remuneration. After both adjustments, the scorecard outcome is 49% of maximum or 79% of target.
The CEO's STI award for the year was AUD 1.3 million, 35% lower than last year's outcome. STI outcomes for the aggregate executive team were 32% lower in total than last year. The board believes these adjustments reflect a result which is fair to our executives while reflecting our values and shareholders' experience. We did consider whether we should change our approach to the financial metric for the coming year, given the continued war in the Middle East and ongoing elevated oil prices. One alternative might have been to exclude the impact of oil prices, but we decided against this, as management's ability to manage oil price risk is key to protecting shareholder value. We have therefore kept the same profit metric for this year, but if fuel prices again have an excessive impact on profit, positive or negative, we will consider whether using discretion is appropriate.
One other matter that I would like to mention is that the profit metric is based on underlying profit, where certain one-off items are excluded in order to give a better indication of how the underlying business is performing. We have a set of principles that have been developed by the audit committee to determine which items to exclude, and we followed these principles again this year. The People and Remuneration Committee then considers whether it should exercise discretion to add back any of those items for remuneration purposes. Two cost items in particular were reviewed, but no discretion was exercised to add them back. The first related to costs associated with the July 2025 cyber incident, and the second related to the settlement costs for the Qantas COVID flight credits class action.
The board has already exercised negative discretion in relation to both of these incidents, reducing executive pay in both FY 2025 and FY 2024, and we did not consider that any further adjustments were required. Turning now to the long-term incentive plan, and the one with the performance period ending on 30 June 2026. This is vested at 89%. Over three years, total shareholder return, which is the share price gain plus dividends, was 64%. That placed Qantas in the top third of our global airline peer group and the top quarter of ASX 100 companies. The reputation metric, introduced three years ago, was tested for the first time this year, and we were delighted that we finished the year with a RepTrak score of 74 in the last quarter, which put us back into the strong category, resulting in just over 76% vesting for this tranche.
There are a few changes that we will be making for next year. As I just mentioned, the reputation measure, which was added to the Long-Term Incentive Plan in 2023, was introduced to demonstrate both internally and externally how seriously the board took the need to repair the damage to Qantas's reputation. It was added so that each LTI metric was evenly weighted at one-third of the opportunity. The RepTrak metric was not intended to be a permanent addition. Given the good progress already made last year, we reduced the weighting of the RepTrak measure in the 2025 LTI grant to 20%. This year, with our reputation back in the strong category, we have decided to remove the measure completely from future LTI grants.
The RepTrak measure will still be tested in the two LTI grants that remain on foot, and performance on reputation will also be gauged through the customer and employee metrics in the STI scorecard. The new LTI grants will return to the two measures of shareholder return. The first, which compares Qantas with a global airlines peer group, and the second, which compares Qantas with ASX 100 companies, and each is weighted as to 50%. We will consider whether an additional financial measure should be added in future as the fleet renewal program matures and capital expenditure normalizes. I will now turn to resolution four, which asks you to approve this year's long-term incentive grant to our CEO and Managing Director, Vanessa Hudson. Each year, we ask you to approve the CEO's participation in the Long-Term Incentive Plan.
This involves granting equity securities to the CEO, rights which will vest into shares if performance conditions are met. Under the ASX Listing Rules, we strictly only need to seek your approval if the securities are issued rather than bought on market. We currently intend to buy any shares required on market, but we seek your approval because we think it is better practice, and it preserves flexibility should something unexpected occur.
The additional aspect which I want to bring to your attention this year is that we are increasing the CEO's maximum opportunity under the Long-Term Incentive Plan to 250% of her fixed pay. If you approve this, she will receive 411,000 share rights, but only if performance conditions are fully met will she receive the equivalent number of shares. Since Vanessa became CEO, her fixed pay has risen by about 3% a year. It is now AUD 1.75 million.
When we compared her pay with roles of similar size and complexity and took her performance into account, her total pay was well below market. We could have increased her guaranteed fixed pay, but we chose not to. Instead, we have put more of her pay at risk. She will only benefit if shareholders do well over the next three years compared with other airlines and with ASX 100 companies. Nothing vests if Qantas is in the bottom half of those groups. Any shares that she earns after three years must then be held for another year, and the board can claw them back if needed. In short, she only does well if you do. To sum up, pay follows performance. The board uses its judgment in both directions to ensure the outcome is consistent with this objective.
We hold management to account through the judgment applied in setting the metrics and in exercising discretion if we think strict adherence to the formulas doesn't deliver the right result. We hold ourselves to account by bringing these judgments for your consideration today. The directors, excluding the CEO, recommend that you vote in favor of resolutions three and four. I will hand back to John Mullen.
Great. Thank you very much, Nora. The next item, therefore, 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 Nora, but they are also detailed in the remuneration report. I now formally propose the following advisory resolution, which is that the remuneration report for the year ended 30th of June 2026, as set out in the director's report, is adopted. The board recommends that you vote in favor of this advisory resolution, and I will now take any questions on this item. Firstly, are there any questions in the room? It would appear not. Alex, any questions online? Oh, sorry, there is. Yep.
Board Chair, may I please introduce Mr. Fraser?
I just wanted to ask, is this separate from the resolution for, actually for Vanessa?
Yeah, fire away. No problems. If I can answer it, I will.
Should I mention that, for Vanessa, particularly in context of Vanessa?
Sorry, what is the question?
I just wanted to. Well, thank you, Chair, for listening. Stop me if you need to. I am just interested in these bonuses, and I am thinking particularly that I am very grateful for Vanessa, for her leadership, for her talent, for the way she listens to people, goes around to various workshops and workplaces, which is so essential for a CEO to do. The way she listens with understanding, and the way she obviously has decisiveness. I am not in the board meetings, of course, but I am sure you are very decisive. Yeah. And she has been committed to this company for more than a quarter of a century, and she leads what must be an amazing executive team. And indeed, that team includes not only the executives, but all levels of the company, which is an iconic company.
I think a word came to me this morning that this company is precious to Australia. I've got a wild idea that came to me in the last few days. I wondered, is there a possibility that executives could consider voluntary reduction of their bonuses? I was wondering if that happened, would it strengthen the social cohesiveness, which is already in the company, but you can always strengthen these sorts of things. Would this actually affect not only the airline, but the nation itself, knowing about these sorts of sacrifices, especially at a time when the country is facing such a huge cost of living pressure?
Just one last point is that I feel that staff belong to this company, and I think we as shareholders belong to this company. We're very proud of it. Our First Nations people have had this idea of belonging to the land. So, I felt that maybe this crazy suggestion of mine might have some influence, not only on the airline and the nation and beyond, but of people feeling belonging. Thank you.
Thank you. Let me have a go at that. Firstly, thank you for your kind comments about Vanessa. I saw her blushing slightly there. We all agree. The board is absolutely delighted with Vanessa's leadership, but also all of the team that she has assembled and works with, and I think we're all very lucky to have a team as capable as we have running the airline. I also agree with your comment about it being a national icon. We actually met with some political representatives last night, and one of the things we said there was that the airline business is a very complicated business. In fact, many investors have told me that they think that Vanessa's job is the toughest in the ASX. So we're very conscious of that, all the ups and downs and pressures of the business.
We also have a huge obligation and responsibility around the reputation of the airline and therefore Australia, because it is, as you say, seen, the airline is seen as part of Australia, part of our international reputation in particular. Even people who haven't traveled on Qantas to Australia will still have heard of Qantas. That's why I think some of the things that we're doing in Project Sunrise next year is going to be, we're going to be the only airline in the world doing it. The halo that I think that will create for all Australians as well as Qantas is very substantial. To your specific point, we spend a lot of time benchmarking remuneration. Remember, our job is not just to control and govern, it's also to attract, retain, and motivate the very best talent that we can from around the world.
We did a little analysis of airline CEOs' pay around the world, and Vanessa is right down in the last quarter. Some airlines not performing even remotely as well as Qantas is, pay their CEOs a lot more. We would actually like to pay her more, but we're very conscious of the relativity in Australia and all the things you mentioned, cost of living. I think we've got the balance about right. Remember, these bonuses are, well, they're called a bonus, but they're only paid on performance. They're not a bonus that you get for turning up to work. You've actually got to deliver value that benefits you as shareholders, then you participate in that through a bonus. I think we've got the settings about right. Thank you for your point. Anything else in the room? Looks like no. Alex, anything online?
Chair, the first question online is from Ms. Celeste Eckrich, who asks, "When will the board stop issuing bonus shares to already well-remunerated executives?
Well, I hope I just answered that, really. We set remuneration at the level we think is appropriate to attract and retain the best talent. If they do well and shareholders do well, they should benefit and participate in that. Thank you.
Chair, the next question online is from Mrs. Nikita. Chair, Nikita has asked a series of questions on the governance review and links to the incident she raised in her audio question about an incident with a check-in kiosk. One of the questions was, following the governance review, the board introduced stricter non-financial risk and reputation modifiers over executive bonuses. Currently, only major federal court penalties, like the ACCC case, trigger bonus reductions. Does the remuneration committee's risk scorecard also track and penalize executives for regulatory complaints escalated to the Human Rights Commission or the Privacy Commissioner when Qantas's digital systems breach passenger rights?
Well, I think it is not fair to say that the committee only exercises discretion around regulatory complaints and things. It is very broad-reaching. The audit and risk committee during the year look at everything that has happened in the year, any risks created by management actions during the year, any problems, reputational or other, and then they feed that information into the remuneration committee when we are deciding on the remuneration outcomes for the year. It can be any form of any aspect or any form of activity or outcome during the year that we think warrants scrutiny from a discretion point of view.
And I think you heard from Nora earlier that there was a tragic safety event and someone's loss of life in a contracted freighter, and management were penalized for that, even though they were not in any way directly responsible. We take that responsibility very seriously, and as I say, reiterating myself, we review all aspects of the company's performance and management's performance every year before agreeing final remuneration. Hope that answers the question. Anything else, Alex?
Chair, that concludes the questions online for this section.
Great. Thank you. If there are no further questions, I will turn to the details of the votes received prior to the meeting. On the screen now are such details of the votes received in advance of the meeting in respect of this resolution. Qantas will disregard any votes cast on this resolution by or on behalf of key management personnel whose remuneration is detailed in the remuneration report and/or their closely related parties, except if cast as a proxy and the votes are directed. As chair of this meeting, I intend to vote all undirected proxies in favor of this advisory resolution. And for those voting today, please cast your vote now if you have not already done so. Thank you.
The next item of formal business for the meeting is to consider the proposed award of rights to your CEO and Managing Director, Vanessa Hudson, under the Group's Long-Term Incentive Plan. I would like to reiterate an important point on the operation of the plan, being that the rights awarded will only vest and convert to shares if the respective performance conditions are fully achieved. For the Long-Term Incentive Plan rights to vest in full at the end of the three-year period of performance, a total shareholder return needs to outperform 75% of the companies on the ASX 100, as well as 75% of the global airlines peer group. Should both performance conditions be achieved, the rights will vest and convert to Qantas shares on a one-for-one basis. These shares would then be subject to an additional one-year holding lock.
If the performance conditions are not achieved, the rights lapse and no shares are awarded. I now formally propose the following ordinary resolution. That Vanessa Hudson, the Chief Executive Officer and Managing Director of Qantas Airways Limited, is permitted to participate in the Long-Term Incentive Plan as contemplated by the explanatory notes accompanying the 2026 notice of meeting. The Board, with Vanessa abstaining, recommends that you vote in favor of this ordinary resolution. I will now take any questions on this item. We have one here, number four.
Chair, may I please reintroduce Mr. Steiner?
Mr. Chairman, my question now is a question that I ask as representative of the Australian Shareholders' Association and not my personal matter. My question relates to the Long-Term Incentive Plan, and it is directed to you, but we have had two pre-meetings with the Qantas Board of representatives, for which the ASA is very appreciative, and those meetings have discussed particularly the issues around this resolution.
My question is focused on the policy criteria that is contained in the LTIP, and it should not be seen as criticism in any way of the performance of the Chief Executive. In our latest meeting, Nora Scheinkestel, as part of the pre-AGM engagement meetings, said that Qantas will consider return on capital investment for future remuneration networks, and in her address, she did foreshadow that her committee, and through her, the Board, will consider reviewing and potentially adding to the current criteria. We take that as a positive step, but unfortunately, our conclusion is that we do not support the resolution. Our support is based on the criteria, not the personality. We look forward to another discussion next year on this same topic. Thank you for your attention.
Thank you. Thank you. I am very aware, and we have had other discussions on this, I am very aware of the ASA's view, and we respect that. We have deliberately said that we will return to, or give it very good consideration to return to a financial metric. The main reason that we have not as yet is, one of the most obvious metrics is return on invested capital, which I think many companies, and certainly elsewhere, in my experience, forms a useful part of the long-term incentive. But Qantas' unique situation, given the very significant asset write-down of previous years, means that the return on invested capital is actually declining as we increase the new fleet, in particular, the investments. I think at one stage it was close to 100% or something. I think now, Rob, it is 32? Yeah. Yeah. So it is 32 now.
Still very high for most industrial companies. It just seems wrong to target management and bonus them on a decline. So, when that levels out and we get to what we think is a sort of floor of return on invested capital, then it is a very useful metric. At that point, we will incentivize management to at least maintain it or improve it in the future. So, we hear you, but there is actually logic. We are not just digging in for emotional reasons. There is logic behind it.
I appreciate the fact that this has been now publicly said at the AGM.
That is what we are here for. Thank you. Alex, any other questions online?
Chair, there are no further online questions for this resolution beyond more from Nikitha, which we have already covered in the meeting. Thank you, Chair.
Grand. Thank you. No further questions. I will turn to the details of the votes received prior to the meeting. On the screen now are details of the votes received in advance of the meeting in respect to the allocation of rights to the CEO and Managing Director under the Long-Term Incentive Plan. As outlined in the notice of meeting, Qantas will disregard any votes on this resolution by or on behalf of Vanessa, her associates, and her closely related parties, except, of course, as directed by any proxies. Proxy votes cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chair of this meeting, I intend to vote all undirected proxies in favor of this resolution. For those voting today, please cast your vote now if you have not already done so.
All resolutions have now been dealt with, and that concludes the formal business of the meeting, and I now declare this meeting closed. Once all votes have been accounted for and verified by the share registry, the results of the AGM will be lodged with the ASX as soon as possible, which we expect will be later this afternoon. On behalf of the board, I thank you all for your ongoing support and for joining us today at the Annual General Meeting. I would also like to thank Vanessa and all the management team and all our employees around Australia and elsewhere for the fantastic job they have done over this last year.
Thanks also, Kate, all the organization putting together the AGM, and Tony and all the AV support and everything. It is fantastic. Tony's been doing it for 30 years, we discovered this morning, so he knows more about the company than I do. We'd like then to conclude this year's AGM with a short video on Project Sunrise. For those of you here in person, I hope that you will then join the board and me for light refreshments out in the foyer. Thank you all very much.