Qantas Airways Limited (QAN) Earnings Call Transcript & Summary

We now invite to the stage Michael West.

[Foreign Language] Good day, and welcome to Gadigal in the Orleans. We'd like to say Metropolitan would like to acknowledge that we are on the land of the Gadigal, we're on the 29 clans of the Eora nation. We'd also like to say that as the oldest living, continuous culture and civilization in the world today, Australians have a responsibility to look after our culture in our sites, because the Eora culture sites too for humanity itself to protect. Think of those 40,000 year-old [indiscernible] those dinosaur footprints in Western Australia, they're part of the dreaming stories. And wonderful stories wherever you go, culture is all around. Metropolitan, like [indiscernible] Council elders, Board and member would like to welcome here today. We want you to have a safe journey home to your family loved ones and community, always was, always will be [indiscernible] and we can achieve great things when we all work together and walk together and it can be achieved. Anything worthwhile is not easily attained. And as Australians, we've shown that we can all pull together for better outcomes for ourselves at our communities. So you have to enjoy your festive season coming up and make sure you take that time out for your own self-care and connect with your family, connect with the community. Thank you.

Good morning, everyone. I'm your Chairman, Richard Goyder. And on behalf of the Board, I'd like to welcome you all to the 2022 Qantas Annual General Meeting, which is being held both in-person and online. Can I begin by thanking uncle Michael for that terrific welcome to country and on behalf of the Board and the spirit of reconciliation, the Qantas Group acknowledges the traditional custodians of country throughout Australia. And we pay our respects to the elders past, present and emerging and extend that respect to all aboriginal and Torres Strait Islander people joining the meeting today. I also wish to acknowledge the Gadigal people of the Eora nation, the traditional owners of the land on which we meet today. The AGM is an important event for Qantas, and one that the Board looks forward to each year. We're pleased to be able to hold this in-person component of the AGM once again, and I thank all of you on behalf of the board for participating today, whether here in-person or online. Before we start, let we introduce your directors. From my far left, we have Belinda Hutchinson, who is also Chair of the Audit Committee; Michael L'Estrange; Maxine Brenner; our Chief Executive Officer, Alan Joyce; General Counsel and Company Secretary, Andrew Finch; Todd Sampson, who dressed up for the day; and Jacqueline Hey, who's Chair of the Remuneration Committee. Tony Tyler, who's Chair of the Safety Health Environment and Security Committee was unable to be with us today physically, however, he's joining us online. All directors up for reelection today will briefly address the meeting ahead of the vote on their reelection. I'm going to start today's meeting with a summary of the group's performance and then I'll hand over to Alan for some brief comments. After Alan has spoken, we'll move to the formal business of the meeting, including voting on the resolutions to be put to the meeting and answering your questions. Once the formalities are over, I'd like to invite those of you who are physically here to join the Board for some light refreshments in the foyer. Also present here today is Julian McPherson, [indiscernible] and Pat Maloney, the senior KPMG audit partners who are available to answer any specific questions you may have about the conduct of the financial year 2022 audit. I'm pleased to confirm that a quorum is present, and I formally declare the 2022 Annual General Meeting open. Before Alan provides an update on the group's activities, I'd like to make a few comments. This is our first in-person AGM since the pandemic. The last one was in 2019 in Adelaide. It was my first AGM as Qantas Chairman. The group had posted another strong profit that year, and we were looking forward to celebrating the 100th anniversary in 2020. Of course, none of us knew the huge challenge around the corner in the form of a pandemic that shutdown our industry. In human terms, it resulted in a lot of tough decisions so we can make it through to the other side. We recognize the impact that had on thousands of people who left the business. In dollar terms, the pandemic cost us $7 billion in losses and more than $25 billion in revenue over 2.5 years. But not only we made it through, we're recovering much faster than anyone expected. As we announced in October, the Qantas Group expects to post a profit of between $1.2 billion and $1.3 billion for the first half of financial year 2023. When you consider the first half of last year it was similarly sized loss, it's a turnaround of almost $3 billion. Alan will talk about the factors driving that remarkable recovery. So let me briefly explain what it means. Firstly, it reinforces the Board's decision to order new aircraft in mid-2022 when aviation was still dealing with the crisis. It meant we secured much better terms and better delivery slots than if we had waited. To quickly summarize, the Airbus A320 start arriving from late 2023 as our 717s retire. The Airbus A321 XLRs are due to arrive from early 2025 as our 737s are retired. And the Airbus A350, which will enable Project Sunrise arrives in 2025. This is a huge investment in next-generation technology made possible by higher revenues through transformation market shift and yield growth. These orders are great news for our people, our customers and for Australia more broadly because of the opportunities that will unlock over a decade and beyond. Our people have done a fantastic job getting us back into the skies safely. The difficulty of switching an industry back on after it's been frozen for 2 -- for more than 2 years is still clear to see at airports and airlines around the world. But the fact that Qantas is already back to pre-COVID levels of service is a testament to our people. We're pleased to be sharing the benefits of the recovery with them with around 20,000 nonexecutive staff eligible for a $5,000 cash recovery boost and up to 1,000 Qantas share rights due to vest in August next year, and a major upgrade to our staff travel program, which is already seeing 10,000 more family and friends of Qantas Group employees able to access these benefits. We've also returned to 3% annual wage increases at a total cost of around $120 million per annum after a 2-year wage freeze that reflects the period of time we're on the ground. A stronger balance sheet also means we can get back to investing for customers. Alan will mention the huge commitment we're making in operational performance, which we know that is so important. In addition to the fleet decisions I mentioned earlier, we also have 3 more Boeing 787s arriving for Qantas International by mid next year, and 18 Airbus A321 is arriving for Jetstar, with 1 already flying and 2 more due by Christmas. They're helping us open up new routes like Sol, Bengaluru and Auckland to New York. That's on top of the 20 new domestic routes announced since 2021, most of which are to regional destinations. Our shareholders gave us tremendous support through the pandemic, that included a $1.4 billion equity raise in mid-2020, a time when airlines weren't exactly a safe haven for investors. In our prospectus, we said those funds would let us restructure and recover quickly, which is exactly what's happening now. That helped us retain our investment-grade rating throughout the pandemic and is now helping us outperform almost all our global peers and remain one of the best-performing airlines on a total shareholder return basis. We were pleased to announce a $400 million buyback in August, which is now 59% complete. With net debt expected to be well below our target range at the end of the half, the board expects to consider opportunities to make further distributions accord to our financial framework. Bringing our operations back to their best has been our priority, but we've also devoted a lot of focus this year to sustainability. In March this year, we outlined our plans to reach zero net emissions by 2050. We set this target back in 2019. And while a lot of airlines have since set a similar goal, only a few have set interim targets to keep them on track. Qantas is proud to be one of them. Our path to net zero will see 10% use of sustainable aviation fuel by 2030 and approximately 60% by 2050. That will cut our emissions by more than 1/3. The rest will come from technology that lowers fuel burn and improves the efficiency of our flying and from high-quality carbon offsets. 2050 and 2030 can save a long way away, given we're already living with the impacts of climate change. So let me share with you 2 quick examples of what we're doing right now. In August, Jetstar introduced the Airbus A321 LR NEO, which stands for new engine option. On its first commercial flight from Melbourne to Cairns, it used 2 times less fuel or 25% than the older aircraft it replaces. That's a massive and instant step change. Around 15% of our fuel from London is now a sustainable aviation fuel. Our flights from Los Angeles and San Francisco will follow from 2025 and have more supply arrangements in the future for sustainable aviation fuel. Many airlines are working to secure SaaS supplies. To put it simply, the industry needs a lot more of it. Australia supplies are particularly limited as most of our food stocks are sent offshore to be processed elsewhere. We've announced a $200 million joint investment with Airbus to invest in helping get a local sustainable aviation fuel industry off the ground. We're also talking to all tiers of government, given the importance to the future of aviation in this country that relies on aviation so heavily. As a major employer, we're closely following the changes proposed for Australia's industrial relations system. We understand the importance of wages growth to maintain and improve standards of living, particularly in low paid industries. Qantas is not one of those. Our average nonexecutive salary is more than $100,000 a year. Around 85% of our workforce is covered by agreements that are negotiated with unions and voted on by our people. We're concerned that the proposed changes effectively dismantle the enterprise bargaining system that has served Australia well for decades. We're concerned that lowering the bar for compulsory arbitration and enforcing multiemployer bargaining would effectively lead to centralized wage setting. This kind of system will have little regard for the fact different companies have different needs, and that will have a massive impact on productivity, growth and in the longer term, the ability to pay more. We welcome the minister's willingness to make amendments to the bill, and we joined with the key employer groups and other companies, big and small in asking the government to take more time for this legislation and as a consequences to be genuinely debated before any changes are made. Before I pass on to Alan, I want to finish on a note of gratitude. Firstly, to our people. On the front line and behind the scenes, they have done an amazing job in this past year, especially. We know it's been hard and that's why it's so important that they share in the benefits of recovery. To our customers who have been understanding and patient as we worked to get back to our best, and to our shareholders who have supported us all the way. On behalf of the Board, thank you. The Qantas Group is in a far better position than it was just 12 months ago, and we're in a better position to keep serving Australia well into the future. On behalf of the Board, I also want to sincerely thank Alan and his team for the work they've done to shepherd Qantas through this very, very difficult and challenging period. And with that, I'll now invite Alan to say a few words.

Thanks, Richard, and thanks for those kind comments. As Richard did, I'd also like to acknowledge traditional owners of the land on which we meet here in Sydney. It's the Gadigal people of the Eora nation and pay my respects to elders past, present and emerging. I'm also very pleased that we're now doing a welcome to country on all Qantas international, domestic and regional operations that land in Australia and Jetstar services as well, which is, I think, a significant recognition of the oldest continuous culture in the world. This AGM is happening at an important time in Qantas' Group's 102-year history. After the biggest crisis we've ever faced, we're finally returning to profit. Our operations have reached or quickly approaching pre-COVID levels of service. And we're starting to grow again with new routes, new aircraft and new opportunities. As you know, getting there hasn't been easy. Surviving COVID meant we had to sell land, mortgage aircraft and raise equity. It also meant restructuring our business so that we could recover quickly. That restructuring is a key driver of the turnaround that we're now seeing. And in the longer term, it will be crucial in a domestic market that has become a lot more competitive. Another key factor in the recovery is the rebound in travel demand, both domestically and internationally. Revenue from leisure bookings is now more than 130% of pre-COVID levels and it's still unbelievably strong, and this has been continuing for a number of months. For business travel hits over 100% of pre-COVID levels. The third factor in our accelerated recovery has been an increase in our market share, particularly in the corporate market, which has moved from our competitor to [indiscernible] the small- and medium-sized enterprise market where we've seen a significant market share move, and pleasingly, on our international routes where we've seen a significant move in market share. We want to make sure that when people do travel, they have lots of reasons to choose Qantas and Jetstar. Reliable service is one of the biggest factors. For several months this year, we weren't living up to the service standard people rightly expected. There were too many delayed flights, long call center wait times and too many mishandled bags. As I said in my message to millions of our frequent flyers in August, there were good reasons why this happened, but they weren't good enough. Qantas performance improved hugely in August and kept on improving in September. Today, we've released figures that show we're firmly back to pre-COVID levels of service in October, and in some cases, better than pre-COVID levels. Maintaining this level of service requires more resources than it did pre-COVID. That's because the industry as a whole is far from post-COVID. There are side effects that are still impacting on us daily. One element is the supply chain. A spare part that would usually take 12 hours to fit onto an aircraft can now take over a week for it to be fitted and the aircraft back in service. We recently had a major delay in sourcing an avionics part because one of the suppliers had during the pandemic when the aviation industry was in hibernation. New [indiscernible] parts from aviation to the automotive industry because that industry was booming. The industry is now still discovering these broken links in the supply chain that tray of 4 levels deep and will take time to fix. We're also prepared for a potential spike in sick leave if there's another wave of COVID as we saw last summer when Omicron hits this nation. That's why we're now investing more than $200 million this financial year in operational resilience. We've rostered more crew so that we can cope better if sick leave was to spike. And we have up to 20 aircraft on the ground over the summer to help minimize delays that we're seeing through these supply chain issues. In fact the January for our international operations we have two A380s spare aircraft, one 787 and two A330s. There is a largest amount of spare aircraft that we've had for our international fleet ever. We see this as a temporary for critical investments until things normalize. When it does, we look at putting this capacity back into operation, and that will take us back to what we believe is our natural domestic market share position of around 70%, up from the high 60% that we're currently experiencing. The one constant in our operation is that safety remains #1, and it will always come before schedule. Our safety performance in financial year '22, which included the very complicated restart of our operations across the globe, show significant improvements compared to financial year '19. Reportable incidents per 1,000 flights dropped by 4% and workplace injuries dropped by around or over 30%. Our challenge now is how we keep on pushing these numbers even lower. Richard mentioned the investment in new aircraft, in our people and in our network. It's worth briefly explaining our approach to fleet renewal and how we face capital expenditure to stay competitive in this space. For decades, our strategy has been to buy new aircraft, look after them well and then we turn them at a 20-year mark. Usually at that stage, people buy the aircraft office because they're still really good. If you remember, the 767s that we had here domestically, they went on to Canada to be operated in that market for 5 years after we retired them at 20 years because they were so well looked after. This is still our strategy. When you average out the older aircraft with a steady stream of new ones joining the Qantas Group fleet, the overall average lands in the low to mid-teens, and that compares well with the majority of our peers. But the age of the airframe is only half the story. Part of looking after our fleet means regular renewal. Cabin interiors are typically refreshed about every 7 years. We did this with the 747s. We've also done it with the 330s and the 380s. In fact, we're in the middle of reconfiguring the 380s when coverted, and we send aircraft with brand-new seats directly into the desert seats that nobody had sat on before. And as we reactivated 380s, we're reconfiguring the last remaining ones into a completely new product. Also part of looking after our fleet is also looking at how we manage our engines and the maintenance of our aircraft. Old aircraft have complete engine overhauls on average every 6 years and with some of the best-performing engines on aircraft of any airline in the world. We're also adding extra features to aircraft to keep our customers satisfied, like the amazing high-speed WiFi we now have on the 737 to get significant customer satisfaction ratings. In summary, our approach is about making sure our fleet is fit for purpose. We think that is true now. And with the order pipeline we have, it will be true for years to come. Now turning to some other areas of investment. We've also switched back on our lounge investment program. Starting with Auckland Airport, which we're making a major investment in, in time for our new services from Auckland direct to New York. We're also enhancing the Adelaide lounges with the introduction of a business-class lounge there. And our regional ports are not forgotten, where Rockhampton and Port Hedland getting significant upgrades. We know how important the lounge experience is to our premium customers, and we're working on several more projects that we'll be announcing in coming months. We're also investing heavily in information technology, spending $650 million alone this year. That includes new kiosks across our network, new scanners and terminals for our airport staff. We've also made big improvements to the Qantas app, which puts more power in the hands of customers to manage their travel and is now one of the highest rating apps on the Apple app store, well ahead of most of our competitors. We're investing also in Qantas Freight with newer aircraft and bigger aircraft to help to meet the demand stemming from the permanent increase in online shopping. And we're investing heavily in the number of seats available for frequent flyers with more than 5 million still available over the next year, so they can more easily use their points. Qantas Loyalty has been a top performer throughout the past few years, and it will keep on growing. Through its continued expansion in financial services to hotel bookings, and now through the successful integration of the trip with deal online holiday package business, which we acquired a majority stake earlier in the year. One thing that has been clear recently is the passion of the people have for Qantas. Few brands in Australia, a few airlines anywhere can generate that kind of energy. It's a huge asset as well as a huge responsibility. What's equally clear about our strategy over the past few years is that it has put the group in a position to keep on delivering well into the future, delivering for the communities that we serve, delivering for the more than 20,000 people who make up the Qantas Group family and to continue to do an outstanding job. Delivering for our shareholders who have given us tremendous support, delivering for the tourism industry were a key part of, and delivering for the causes that we continue to champion. Thank you.

Thank you, Alan. Before we go to individual questions and I outline some of the meeting procedures, I just want to address 3 issues that have been common themes and discussions with shareholders. We've had several questions about our operational performance. What have we done about the issues and when will that be fixed and Alan deal with some of that. But let me first reiterate what we said many times in multiple channels that for several months this year, our service levels were simply not up to scratch. Problems were particularly acute at Easter and again, in the July school holidays. As Alan explained in his remarks, a huge amount of effort has gone into getting us back to our best and I think the much smoother performance for the September holiday shows that. We've been very transparent with the operational data we've released every month, including figures that show how bad things got. Looking at the latest figures, we released today, I'm glad to say Qantas is now at or close to pre-COVID levels of service. Our on-time performance for departures were 74% in October, before October, it was around 80%. Our flight cancellations are now below where we were pre-COVID, and we are on a path of mishandled bags. It's worth addressing the perception that operational performance was poor because we outsourced our baggage handling. The fact is we had outsourced baggage handling by Easter 2021, and domestic flying levels were back to almost pre-pandemic levels in the gap before Delta hit. There were no issues with service levels over that holiday season. Compare that to Easter 2022 when the same outsource baggage function clearly didn't cope with a similar level of demand. The difference between the 2 is that COVID was circulating widely at Easter this year because Australia had moved to living with the virus. That resulted in high levels of sick leave right across the community and across the industry. That led to issues not just with baggage handling, but with security screening, which is managed by the airports, cabin crew engineering and pilots. Our sick leave rates were averaging 20%. So of course, this generated huge resourcing problems, and that resulted in mishandled bags, long queues and flight delays. For pilot, sick leave was running at 2.5x normal levels. Other airlines have the same problem, both here and overseas. It would have been an issue whether the function was outsourced or not. As Alan has mentioned we've added a lot of operational buffer to help manage sick leave as well as the supply chain issues the whole industry is facing and that's clearly making a difference. The second issue on which we've had several questions related to customers, particularly how our operational issues have impacted customer loyalty and preference for quarters. This is something we take seriously and monitor closely. Clearly, the operational issues we had did not reflect well on our brand. The media sharp focus on Qantas doesn't help, but it also means that we're focused on lifting air game. The fact is Qantas on-time performance was better than our main domestic competitor for much of the last year. Our customers have been incredibly patient and understanding throughout the restart. What I hope the past few months have shown them is our determination to make things right. The clearest example of that is the $200 million we're investing in operational resilience, which not all airlines are in a position to do even on a relative basis. As well as the direct apology for the service trade, we've also offered a $50 voucher to millions of our frequent flyers and automatically extended the status of those silver and above. Our research shows those efforts have been well received and combined with consistent improvement in our operational performance, we've seen our customer satisfaction levels rebound quite quickly. As Alan said, our focus is on sustaining those improvements and building back that trust. The third issue I'd like to address upfront relates to our relationship with our people, the group's wages policy and our approach to employee agreements. Let me just reiterate that our people have been incredible during 3 very challenging years. During COVID, we had up to 25,000 people stood down and others working hard on repatriation flights and freight services on behalf of the Australian government. And then they work to restart the airline. I spoke earlier about sharing the benefits of our recovery with our people increased wage, rises a boost payment shares and improved staff travel. We're investing upwards of $300 million in these initiatives and the overall pay opportunity for many of our employees is substantial. For many of them will be more than 10% once potential wage increases and one-off opportunities have taken into account. On employee agreements, 25% of our workforce or more than 5,000 employees have signed up new enterprise agreements over the past 12 months. We're in discussions with several other work groups about new agreements, bargaining in good faith with our employees and their unions. It's often for trade that Qantas plays hard ball when it comes to wage deals. It's true that we have threshold requirements, which is the case for most companies, and we do look for improvements to productivity, which isn't unique either. But as I mentioned earlier, it's also true that Qantas is the highest-paying airline in Australia and one of the highest paying large employers in the country. So when we're negotiating, it's often from a very high watermark. We take a balanced approach deals with our people. To take a current example, we're asking about domestic cabin crew to extend their maximum shift link so that we can efficiently utilize the new aircraft we've ordered. And we're prepared to pay overtime rates of up to 300% in return. This is in the context where we have been very clear that we expect these shifts will only represent a small percentage of overall rosters. It's worth noting this duty length is already in place with Rex, with Virgin and with Jetstar. Across the group, we have more than 50 agreements that are negotiated with unions and voted on by our people. That process sometimes results in robust debates, which is part and parcel on a system that relies on give and take. Now before I move on to the formal business of the shareholder meeting, can I ask our friends in the media, and thank you for being here to cease filming and will pause for camera operators to leave the room as we've traditionally done in previous AGMs. Thank you. So now we'll turn to the formal business of the meeting, and I'll first outline the procedural matters for the meeting. As this is a meeting of Qantas shareholders, only shareholders, their appointed proxies or authorized representatives are entitled to make comments, ask questions or vote. The notice of meeting dated September 9, 2022 was circulated to members, and I'll take the notice of meeting as being read. Following consideration of the reports, I'll turn to general questions. Shareholders with queries relating to specific resolutions are requested to raise them at the time of the resolution in question being considered. If a shareholder has a specific customer-related issue, please raise it with our customer care representatives, who will be available at the customer care desk before and after the meeting. For an employee shareholder wishing to raise an employment-related issue, Phil Taylor, who's the Executive Manager, remuneration and benefits, Nathan Head of Industrial Relations; and Rebecca Donaldson, Executive Manager of Peoples Strategy, will be available after this meeting to answer your questions. Those in the room who'd like to ask a question are asked to move to one of the microphones located throughout the auditorium and after providing your shareholder details to the attendant, wait to be invited to ask your question. Shareholders who are attending online are able to ask questions via the online moving platform by clicking the messaging icon on your screen, typing your question and clicking send. You can also ask questions verbally by clicking on the request to speak button at the bottom 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. In order to allow as many shareholders as possible to participate, please keep your questions concise and had a limit of 2 per shareholder. And I'm pretty good at cutting off people that make speeches. Questions that are relevant to the business of the meeting will be read allowed to me by a Quanta staff member. We may amalgamate questions if there are multiple questions on the same topic. We'll say of answering specific -- questions specific to the resolutions until the relevant time. However, those online are able to start submitting their questions now. At the time each resolution is considered, I invite any specific questions to the resolution from the room, from our online attendees to ensure that all shareholders are given a fair opportunity to ask questions. I'll now summarize the voting procedures. All items of business will be voted on by poll, which I now declare open. If you don't cast your vote prior to the meeting and have not appointed a proxy to attend on your behalf, you may cast a direct vote using the online platform or via the handset you were giving at registration if you're here in the room with us today. Please note that you cannot vote via telephone. You may cast your vote at any time during the meeting. Voting on the platform will close 5 minutes after the close of the meeting, and I'll give you a warning when this 5-minute period starts. For those using the online platform, please click on the voting icon and follow the prompts. For those in the room, please place your vote for each resolution using the handset by pressing 1 to vote for, 2 to vote against or 3 to abstain. Press the green square to move to the next resolution or the red triangle to go back. I confirm that where undirected proxies have been given to me as Chairman, I'll vote in favor of the resolution to the extent permitted. During the meeting, we'll display the votes received prior to the meeting on each resolution. 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 difficulty using the online platform, the helpline number is displayed at the bottom of the online platforms homepage, along with other instructions on how to watch how to vote and how to ask questions. Link Market Services is 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 2022 annual report. The annual report was made available to shareholders in September. It contains the financial report of Qantas Airways Limited and its controlled entities, the directors' report and the independent auditor's report. The financial report has been approved by the directors and audited by Qantas' independent audit KPMG. As required by Section 317 of the Corporations Act, I now lay before this meeting the financial report, the directors' report and the independent auditor's report for the financial year ended June 30, 2022. Surely, I'll take any general questions or comments about the reports or any other general matters. As stated earlier, our auditors from KPMG are available to answer any specific questions you may have about the conduct of the audit. I'll now take questions from shareholders on the financial statements, the Qantas Group's performance over the last year, the directors' report or auditor's report. We'll start with a few questions from those in the room and ensure that we take questions from those attending online. If you wish to ask a question online and have not yet to get it, please do so now. Anyone in the room who wishes to ask a question, please move to one of the microphones. Annabel, anything online?

Chairman, we have a question from the Australian Shareholders Association. Given the recent and projected retirements from the Board and the longevity of the current CEO, could you expand on the Board's plan for succession in these areas?

Thank you, I thank the Shareholders' Association for that question. In terms of Board renewal, the Board actually downsized like the rest of the groups through the pandemic. And so we had at the last AGM, the retirements of Barbara Ward and Paul Rayner. We currently looking to -- that the Board looks at the skills that we have available and the skills which we think would add to Board capability, and we're looking at the moment for that, particularly with deep operational airline experience. And we'll also manage retirements and renewal of the Board in the years ahead, and we've got external party helping us in that work. In terms of CEO succession, I want to be really clear on this. Firstly, the Board takes succession very seriously. And that's from day #1 of the appointment of a CEO, So in Alan's case, something beyond 14 years. And the Board looks at succession each year almost in every meeting, but specifically, at least twice a year. We've -- we asked, Alan, in early 2020 to see if he would continue as CEO through the pandemic and make sure close came out the other end, and Alan agreed to do that. And so the position that -- with Alan at the moment is that he will continue serving as CEO until at least the end of 2023. In due course, Alan and I will sit down and have a conversation and determine what that time frame looks like, but that will be some time into next year. In the meantime, the Board is doing work on succession. The Board is very confident that Alan has developed a very capable executives and that we've got strong internal succession. And the Board, of course, will look scan externally as well. But the Board feels very confident that we're in good shape in terms of CEO succession as and when that is to occur. We've got one question going to microphone 5 in the room. And anything else online?

Chairman, we have a question from shareholders, Daniel Brown, our frequent fight rates likely to increase in value in the near future?

Thanks, David. I'll get Alan to answer that question.

So Daniel, what we have done is we haven't change for classic rewards, the point needed to redeem seats for a long time, no plans to do that. So it's still unbelievably good value for money. And as I said, we have now 5 million seats available in the year ahead for people to be able to redeem. The points post play is different because it relates to the airfares that they're at that time, so you can pay with cash, you can pay with points if the fares are high. it needs more points, if the airfares are low and needs less points. That's always the way points was playing work, and that will continue. But the value that you get in the given inflation in the economy, the value you're getting classic rewards remains really good. And if you would look inflation adjust that, it's superbly good and that will continue.

Thank you. Microphone 5 in the room.

Chairman, may I please introduce Rowan.

Actually, it's more a comment. I've enjoyed the meeting and the report. But my comment is that it's not what I'm hearing in the community. I'm hearing all types of trying to [indiscernible] all expenses and that's just not working even person who flies to Melbourne sort of every second week in, had to go by train. Because you just -- I think it was [indiscernible] is just not working. And the other thing was I'm just interested, where is the maintenance done on the planes. I think you moved it to Singapore one time. Did you -- I don't know -- only just -- more comment than a question.

Good questions, and let me see if we can give you...

It's good to see you back.

It's good to be back, particularly if you're in behind the iron curtain of Western Australia, where I was. So thank you for the questions. I'll get -- I think I'll get Alan to comment on both because it is important that we win back the trust of our customers, and we're really focused on that. And -- and what you've -- for trade is something we've all heard in recent times and something we work on and Alan also answer your question in terms of maintenance?

Yes. I think we have to adjust the heights of those wall and those microphones as well. My height [indiscernible] somebody 6 foot tall, I think we might do with that. I think they are good questions. First of all, I start by talking about the operation on fairs, because I think both of them you were referring to. And what we did have is a bad period, which we apologize for particularly in July, where we had all series of the impacts and our on-time perform was as low as 51% and our cancellation levels were very high at 7.5%. What we have seen with the focus of us putting these spare aircraft in, put an extra crew in place, compensating for the supply chain issues that I've talked about, we've seen a significant improvement, and it's gotten better on each month. And in October, as we mentioned, we had OTP at 74%. If it was not for the extreme weather events that we saw at 1 or 2 other small items, we would have gone to the 80%. And we are massively ahead of our competitor. For that month, we're 10 points ahead of our major competitor here. We haven't been far ahead since 2013 -- February 2013. So it was a very big lead and cancellations came back compared to pre-COVID level. And as I said in the comments there, with this adjustment of 200 million, our intent is to keep those very high standards going forward to deploy all the other challenges. It will take a while from people's memories to get those bad months out of people's minds. And so we're going to see that improved. And one of the factors as a consequence of having those 20 spare aircraft, if we don't have as much capacity as we were planning because we've kept the aircraft in reserve. We would have normally been flying them. Well, we'll get back to 100% of our pre-COVID levels of domestic capacity in the second half of this year, we were planning to be near 120% of that levels, that extra capacity would have met the unbelievable demand we're having there. And with 100%, we're seeing more demand than there is supply. But we have to keep these aircraft in reserve to make sure that we don't go backwards in the operation, which of course, for our customers. But even in that world, we are seeing a very lower air fares, not as much as they want maybe back in '18 and '19. But to give you some example of what's out there. At Jetstar this year, will sell around 5 million seats at under $100. A few weeks ago, we had a $35 airfare between Melbourne and Sydney. That's 800 kilometers. If you were to take an [indiscernible] to the airport from here, it costs you more money than that, and that's same kilometers. So they don't believably good value those airfares are. And we will continue to offer them Qantas, I think we'll have 2 million seats under $150 this year fly domestically. And airfares internationally, unfortunately, international aircraft are taking longer to reactivate because the A380s need 4,500 hours of maintenance just to wake and most of them need 3 months of heavy maintenance to get them back in the air. And all our competitors are in the same pot. We are adding capacity faster than our competitors. So an international market share has gone from 24% to 31%, a big increase because we're adding capacity faster. But again, there isn't enough capacity for the met the demand, and that's why you're seeing all the seats selling. On my voice, if you do early enough, in events, you'll get still some unbelievably attractive airfares across the international network, and people should be actively looking out there for them, and we'll have more capacity every month coming into the system. On engineering, we're the only airline that does heavy maintenance here in Australia. So if you want aircraft maintained by Australians, you go on Qantas, we have a very big maintenance facility in Brisbane, where we do the heavy maintenance of the 737s and the 330s. Where there is a fleet of aircraft that is small and it's not economic to do them here, we do them overseas like the A380s. But we have a very large hanger in Los Angeles, the largest hanger in North America, where we employ engineers in North America to do that maintenance. And we've given maintenance to a reputable organizations like Lufthansa or Etihad in the Middle East to do it for those big aircraft, where we just have such a small fleet, it's not economic to do them here. But the 737, you fly out, the 330s that you fly are maintained in Australia. And the line maintenance, which is the maintenance that's done on the airport is strong by our people. So there's a lot of misinformation on that, please be assured we still get the investment, and we didn't cut back on our heavy maintenance facilities in Brisbane.

Thanks, Alan.

Chairman, we have had a question from shareholders, Stephen Mayne. He asks did any of the 5 main proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and ASA recommend a vote against any of today's resolutions.

Thanks Annabel, and thanks, Stephen, for the question. So of ACSI ownership matters, CGI, Glass Lewis, and the Australian Shareholders Association all supported all the resolutions today. ISS supported all except for the restructuring, what's called -- and retention restructuring plan resolution as it applies to the CEO and the remuneration report. So of the proxies, ISS was the only one who advocated vote against on those 2 items.

Chairman, we have a second question from Stephen Mayne. The question for the auditor on the accounts. The audited account claims, Qantas has negative net assets of $190 million with accumulated losses of $4 billion, but the current market capitalization is $11.2 billion. Could the auditor please explain why this is the case and whether Qantas has been too aggressive with write-downs over the years.

So thanks, Stephen again. I don't think it's a question for the auditors. I think it's actually -- it's a reality of 3 years of cumulative losses of $7 billion, and how that -- then its been reflected on the balance sheet. And it's not -- it's not out of -- it's not uncommon for companies to have a very different market capitalization to what their balance sheet may record at a point in time. And we think and the auditors have confirmed that the carrying value of assets is appropriate on the balance sheet. Did I cover that?

Yes. No, absolutely. Look, we've got a negative asset position on the balance sheet of $190 million, but that reflects the COVID pandemic and you would expect that after a $7 billion loss. And the market capitalization is really reflective of our future cash-generating position and profitability. And as both the Chairman and CEO have mentioned, the result that we are expecting for the December half is a $1.2 billion to $1.3 billion profit before tax. So I think that absolutely demonstrates why the market capitalization is where it is.

Thank you. Annabel?

Chairman, we have a question on the phone from Matthew Watson on customer service improvements. Matthew, please go ahead and ask your question.

Yes. Thanks for the time. You're mentioning a lot of customer service improvement and flight cancellations are down across both Qantas and Jetstar. And that obviously brand and reputation at Qantas is significantly lower in the public eye at the moment. What I've noticed and sort of this is a comment and then question. I'm looking for a sort of an explanation as to why in the last week, 2 Jetstar flights that I've been linked with have both been canceled at short notice within 5 to 3 hours of time. As such, obviously, replacement costs at such short notice have been significant. And then these flights were booked through Qantas' website. Qantas Customer Care has not helped in replacing the Jetstar flight onto a Qantas flight. And I just sort of want to get an idea from you as to why if service is booked through Qantas' website, the customer is being forced to book externally paying substantially larger replacement costs and why Jetstar has seen as a separate operator through Quanta's website.

Thanks, Matthew. We'll make sure our customer people get back to you. If you can give details to our operators. We'll make sure specifically that we get back to you on your issues. I'll get Alan. Jetstar has had more than its share of challenges in the last month or 2. I'll get Alan just to explain a bit of that. But as I said, we'll get our customer people to speak directly to you in terms of your specific issue.

Yes. Thanks, Richard. There could be a lot of reasons just on cancellations that occur very late. There can be a lot of reasons why they occur and they occur across the industry. Actually, in the month of October, Jetstar's cancellation levels were very similar to [indiscernible] during the same month and the on-time performance was very similar. So Jetstar has also seen a rapid improvement. It's not where we need it to be, and our intent is to improve even further before we get to Christmas. But I know for the fact in the last few days because I've had also now people that being impacted by it. The extreme way and then Sydney is a good example of where we're having problems because if the wind gets over 20 knots in Sydney, we have to go to a single runway operation. That means there's restricted amount of aircraft that can land. So typically, there's up to 50 aircraft that can land in an hour. For the last 3 days, that's been restricted as low as 20 an hour. And that means it sophistically just can't operate everything here. Cancellations have to occur. And unfortunately, weather forecasts sometimes can change very dramatically, and it gives us with very late notice to make those changes. We're trying to work on procedures to increase that threshold to 25 knots, where we -- that happens around the globe, and that would be helpful in minimizing the amount of disruptions that stand. Also, I would say, that Qantas does make it very clear on its website which airline people are being carried by. And Qantas on its website and through its partners all over the globe sells hundreds of different airlines to give people one-stop access to a range of routes that Qantas supply itself, but that is made very clear. And typically, the aviation industry, it's the operating carrier, and Qantas has 2 separate carriers here has more than 2, because the Qantas linked as well. And the operating carriers do look after disruptions, and that's where it needs to go. If it hasn't been handled well, we apologize for that, and we will get our customer service people. We have a number of here today to help if any shareholders have any issues we'll get them to call you back and go through what your issues are and try to come up with solutions. But this is a typical approach, and it's the only way you can really approach it to manage disruptions. In some cases, we just forced on the airlines are very late movers. And we all know that we've had extreme weather events and these coast of Australia for the last few months, and they are having an impact on the level of cancellations and disruptions in the airlines.

Annabel?

Chairman, we have a question from shareholder, [indiscernible] asks will Qantas make any significant changes to its cybersecurity and client privacy approach in the wake of the recent Optus breach to ensure risk avoidance.

The Board had a comprehensive update on cyber yesterday. And the Qantas has investing significant sums of money into cyber, and to ensure the strong adequacy of the systems we've got in place. Understanding that it's a pretty volatile globe at the moment on these players who use very sophisticated mechanisms to try and access information that shouldn't otherwise access. I think it would be fair to say, Alan, that the Board and you are confident that we've got robust systems in place, but it's something we don't take any great comfort in, and the sense that we're continuing to look to see what we can do to enhance our protections on cyber.

Yes, Richard, I would say that the way we approach this is the way we approach aviation safety as well. You can never get complacent. We look [indiscernible] in aviation around the globe. We figure out why the landings we can get from that. We look at -- we call it a Swiss cheese model where you see the level of protection you have to make sure to hold [indiscernible] off and something back and [indiscernible]. In aviation, we continuously improve. We're continuously seeing how these issues can -- we can use to actually enhance our safety ramp reputation or safety management system. We do the exact same in cyber. So these incidents have been a number of them. Our technology team, our cybersecurity team have looked at them, have looked at what we would do to change. And of course, I can't go into all of the details of the stuff that we do in this space because it could be completely inappropriate. But you can -- you take it for granted that we will land from every issue that happens and hence, what we do to enhance our protections. As Richard said, I mentioned that in my space that we spent $650 million on IT each year. We spend around $70 million, have spent hundreds of millions in the last few years on cybersecurity, and we'll continue to invest in that to protect your data and enhance it as we need to do because the world is getting more aggressive in this space and people are investing more money on the other side to try and penetrate companies data.

Thanks, Alan.

Chairman, may I please introduce Stephen Way.

Microphones are very, very high. Okay. Mr. Chairman, I was passing through your annual report while I was at the meeting. So maybe I did miss a fine print in this report. But my question is very similar to the one risk by my fellow shareholders, Mr. Stephen may, is regarding the fact that our net asset is in the negative. Now we know the outage 2.5 years of losses. This is the position we are in now. And one of the way that we managed to stay in a better share is that we sold our assets like land in Mascot. Right now, we are not still fully out of the pandemic, and there could be future one coming. So in the next pandemic, have we got anything to sell?

Thank you. So -- if you look at the things Qantas has had to do over the last 2 or 3 years to ensure we got through this pandemic. And thankfully, we went into the pandemic with a strong balance sheet and had a very strong management team. We've been able to raise $1.4 billion from our shareholders. We sold the land for $800 million. We've raised about a $2 billion from our finances from the banks. And so all that helped us get through some of that was because we owned a lot of the assets, aircraft and the like. Because of the cash flows in recent times, we're seeing that strength come back into the balance sheet now. And you'll see that in terms of reported balance sheet as our profits come forward in the periods ahead. So we've right, we've given an update last -- sorry, in September that our net debt would be in the range, I think, $3.2 billion to $3.4 billion, which is the low end of our range. We've got just under $5 billion of liquidity right now. And we own as many aircraft now as we did when we went into the pandemic. So we feel that we're pretty resilient to any further shocks. But please, God, we don't get any like we just had.

Thanks for that answer. Now is Alan Joyce is the asset to the company. I thought maybe you would have answered my question by saying that we will put on the balance sheet. But unfortunately, the Australian accounting standards...

It's a good point. Thank you. Annabel?

Chairman, we had a few questions about dividends. So we will take a question from shareholder, [indiscernible] which covers the core themes raised. Can you please advise when Qantas will start paying dividends again?

So as I said in my address, we announced a $400 million share buyback when we released our previously. As I said, going forward, we'll look at the most effective way based on our capital model of distributing funds to shareholders. Because of the pandemic, we're in a position where we don't have any franking credits. So we're not in a position, at least for some time to pay franked dividends. Which means if we were to pay dividends, and they're taxed in the shareholders' hands, and that's a very inefficient way of distributing excess capital. So we'll look at -- as we move forward and based on performance, we'll look at the most efficient way of returning capital to shareholders.

Chairman, may I please introduce Malcolm [indiscernible].

Thank you very much. I'm just wondering what programs does the company have or reaching out to the people of Australia, either in reaching out to communities with perhaps charitable programs and also in actually providing employment within the company.

Thanks for the question. We have our own reconciliation action plan. We have a program to employ more of regional people in the group, Alan what's the percentage now?

So we're at around 1.8%, with the target to get to 3%. And we put a whole series of programs in place to start recruiting people in various areas. Qantas Link in particular, at the moment, it's a very good because obviously it flows into a lot of these region communities. We're also trying to enhance what we do in our pilot academy to get indigenous people into that academy, but we're also at a target to increase the amount of female pilots, so we have gone through that, and to helping small indigenous businesses. So as part of the BCA, we've made a commitment at supply products, usually in fly products, but there's also IT products, water that we're buying from indigenous communities all over the country and owned by indigenous people to put them on our aircraft. And what we typically find the people like [indiscernible] with Qantas' products on our aircraft. So that could be the best way of actually helping towards indigenous communities. We're also one of the biggest promoter of, I think, internationally, the oldest continuous culture in the world. We have a number of aircraft painted in indigenous artwork. And we have more coming in that space, and we're really trying to help promote tourism to some of these agents with indigenous tour groups, indigenous businesses to help. The other thing that I think is very important is that Qantas is one of a handful of companies with its reconciliation action plan that's got to an elevated status, which is the highest status as you can get. We're in submission for that at the moment. Hopefully, we've maintained that status with all of the activities that we're doing across the Board. And we were also one of the supporters of the [indiscernible] from the heart, and we'll be very -- continue to be very active in helping and support when we see the details of the referendum, how big support the indigenous case for that across the country.

Thanks, Alan.

Chairman, we have an online question from Matthew Price. Matthew says, I appreciate the apology regarding service and operational impacts. However, the experience in service level in WA regional flying regarding food and beverage even in mainline 737 flights is still substandard and more in line with your low-cost competitors. Can you specifically address when food and beverage is going to be restored to pre-COVID levels?

Alan, you probably haven't flown first Port Hedland for a while, but you're probably...

So one of the things that we are rapidly doing is getting all of our service levels back to pre-COVID. There were some things we, as you can imagine, have to do to restrict contact between people and the COVID world. So we did take some options and some choices away. One example is the vegetarian meal, which we quickly have fixed and put back onto aircraft. We are looking at investing more in food and beverage across the board, domestically and internationally. And we're hopeful before Christmas, we'll be able to launch more enhancements in the air and on the ground in the lounges that people will see, well, not only take us back to pre-COVID levels, it will take us substantially better than pre-COVID levels. So stay tuned for this. Unfortunately, some of these things take a little bit of time to reactivate because you need to get the suppliers, you need to get the product and logistics wide, and you need to consult in a lot of cases with the crew to make sure that they can be delivered in the appropriate time and we're going through that process.

Thank you. Annabel?

Chairman, we have an online question from [indiscernible] to address the issues of sick leave and shortage of experienced staff. Why doesn't Qantas reach out a long-serving crew, who took voluntary redundancy during COVID and may want to return to flying without having to go through such a full selection process.

Alan?

So what we are doing is we are recruiting people, and we can -- we have seen huge interest in it. So anybody can apply to those jobs and go through the process. I think we advertised for 2,500 people a few months ago, we had 25,000 people applying for the 2,500 jobs, mainly in the crew space. The issue we're having is mainly in the training, which would happen. We have to do it for pilots that may have 20 or 30 years training. So like an [indiscernible] pilot that hasn't flowed for the 2 years, we put them through 24 areas of simulator training. Before we -- and then 4 sectors were checking training camp all of them before we certify them the flying aircraft again. That's just Qantas' safety standards across the board. For -- even for cabin crew that haven't worked for a while, we have to put them through those EP training and get those crew up and training. So our bottleneck to get even more crew in places around the training, and every airline in the world is still the same thing. Our partners, Emirates had a lot crew that left, and they are filling up their training centers, we're filling training centers, simulators of all. So that's one of the bottlenecks, not the only one to get the international aircraft back up and running as fast as we can. And that will be still the case. We still have to get some training done even if you were a previous experienced cabin crew.

All right. Thanks, Alan. Are there any other questions in the room? If none -- Anna, if you've got anything else, otherwise, I'll move on.

We do. Chairman, shareholder David asks Qantas needs additional long-haul aircraft. Are you planning to order more Boeing 787s?

Alan, quick response I think.

Yes, we've got a lot of questions coming in. So the -- we have 3 brand new 787s, unfortunately, can we subject to a delay that Boeing had worldwide, which are due to live next year in April, May and June. Those aircraft, we are already starting the plan of flying for the New Auckland, New York service was dependent on those aircraft arriving and will be put in. So there's 3 brand-new aircraft arriving in the middle of next year. And of course, we have from '25, the A350s, 12 of them arriving. And we have these XLR aircraft, which are 321s that can fly internationally and our intent is to do that. So there's plenty of aircraft arriving over the next few years to expand our international operation.

Thanks, Alan. I think we'll move on now. So we'll move to the next item of ordinary business. Second item of formal business permitting is the reelection of your directors. The directors offering themselves for reelection of today's meeting are myself, Maxine Brenner and Jacqueline Hey. Pursuant to the Qantas constitution, the ASX listing rules, it's necessary for each director other than the CEO to seek reelection by shareholders at least every 3 years. The notice of meeting and annual report contains details of the directors' background and experience, and we'll also hear from each director up for reelection. The Board and Nominations Committee regularly reviewed board composition, as I said earlier, to ensure that we have the right mix of skills and experience among our directors, and we consider that individually and collectively, the directors have an appropriate amount of skills, experience and expertise to set the strategic direction of the group, and monitor the implementation of that strategy by management. I'd like to thank my fellow Board members for their valuable contribution and leadership over the past year -- and the last few years under what have been very trying circumstances. As Item 2.1 of today's meeting relates to my reelection, it is not appropriate to move that. So I've asked one of my fellow Dr. Jacqueline Hey take the chair at this time.

Thank you, Richard. I have pleasure in moving the reelection of your Chairman, Richard Goyder. Richard was appointed to the Qantas Board in November 2017 and as Chairman in October 2018. He's also Chair of the Nominations Committee. The Board believes that Mr. Goyder provides outstanding leadership to the Board through his extensive commercial, management and board experience, and he brings considerable strength to the Board and its collaborations generally. The directors, with Mr. Goyder withstanding, unanimously support his reelection and recommend that you vote in favor of this resolution. I'd now like to say and invite Richard to say a few words.

So thanks, Jackie, and thanks, shareholders. As you know, I've been a Director for 5 years of Qantas Chairman for 4 of those years. I couldn't have asked for a more interesting first couple of terms on the Board. We had a record profit in 2018 followed by record losses through the pandemic, and now we're on course for first half profit in 2023. COVID meant that our Board and I particularly have had a lot of engagement with Alan and his team as we've navigated our way through the pandemic. I remember really clearly, Alan calling me it was around the 5th of January in 2020. I know where I was. I was outside of my brother-in-laws' placed in Perth. That was well before -- there was any conversation in Australia about COVID. He said, Richard, there's a virus, there's something going on in China, there's a virus spreading, and we're a bit concerned we're going to stand up our crisis committee. I said literally shrug my shoulders in the car and said, fine, keep me informed. Well, he most certainly did. And we've seen the value of that early action, a strong balance sheet. We're talking to the pandemic in 2018 and 2019. And we've had an incredible loss till 3 years. And I must say, I've thoroughly enjoyed the experience of working with the Board and with Alan and his team as we've never go our way through. Prior to joining this Board, I was at Wesfarmers for just over 12 years, 24 years with the company. When I left Wesfarmers, we're a $50 billion company with businesses in retail like Bunnings and Kmart Officeworks, Target as well as energy, chemicals and industrial safety. I care 2 public companies now Qantas and Woodside Energy, Australia's largest energy company. And I also chaired the Australian Football League and a couple of not-for-profits. I happen to believe it's beneficial for directors to serve on different boards. It provides me with a perspective across a number of sectors in the economy and a wider lens to assess the drivers that underpin our business, like balance sheet strength, liquidity, the quality of management, the strength of stakeholder relationships and the understanding of policy settings. My experience as a public company CEO has been extremely valuable, and I play a different role now, hopefully, than when I was an executive that allows me to divide my time between the boards, but also hopefully provide some guidance that is a value to other directors and to Alan. I've spoken already about our people, their passion for Qantas, I'm passionate about this company and our strategy. At the Board, we support Alan and his leadership, but we also challenged them. I speak with shareholders regularly and hopefully represent your interest well. I'm a shareholder and with just over 193,000 Qantas shares now, and I'll continue to grow that holding as I receive 30% of my directors fees each year and shares under a scheme we have for the Board. So thank you for considering my reelection as a director. If I am reelected, I look forward to continuing to lead our Board and bring that knowledge and experience to our discussions.

Thank you, Richard. I now formally propose the following ordinary resolution: that Richard Goyder, 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. With any shareholder who has a question on the proposed resolution, please move now to one of the microphones or submit their questions via the online platform. It doesn't appear like we have any questions in person today. So Annabel, I might ask if there are any questions coming online.

Yes. A question on Richard's reelection from Stephen Mayne. Is this going to be your final 3-year term on the Qantas Board. And do you believe your successor as Chair is currently on the board. Also, does the Board perform an annual performance review on the Chair's performance and who leads that process?

So I can start with that, if you like, Richard. So I'm not sure the Board has decided this is Richard's last term. We don't have a fixed term per se that would be -- I think it'd be 7 years by the time you finish this term, give or take. And certainly, we imagine Richard might go on beyond that. We do certainly do an annual performance review of each of the directors, including of Richard, and that's a very thorough process, sometimes done in-house by the Board sometimes done by external parties. Richard, is there anything more you'd like to add?

No.

Any other questions? And there are no more questions in the room. So I'll now turn to details of the proxy votes received prior to the meeting. We could have those put up. On the screen are the details of the proxy votes received in respect of Richard's reelection. For those voting today, please cast your vote now if you haven't already done so, both in the room and online. So thank you for that. And based on those provisional results, it does look, Richard, like you have definitely been reelected, and thank you. We look forward to continuing to serve us as Chairman of the Board. I'll hand the meeting back to you.

Thanks, ladies and gentlemen. Thank you, Jacquie. It's an honor to be chairing this great company. The second reelection is of Maxine Brenner being Item 2.2 of the Notice of Meeting. Maxine was appointed to Qantas Board in August 2013. She is a member of the Remuneration Committee and the Audit Committee. The Board believes that Ms. Brenner provides through her considerable strategic financial, legal experience, great strength and led to the board and its deliberations generally. Additionally, these skills add to the strength of the audit and remuneration committees on which she serves. Ms. Brenner as a member of other company's audit committees due to the different financial year ends of the companies, the Board believes that she is able to devote the time and attention required for her Audit Committee work. I'd now like to invite Maxine to say a few words.

Thanks, Richard. I'd also like to acknowledge the traditional owners of the land on which we made and paying my respects to elders past, present and emerging. Thank you, and good morning to everyone taking part in today's meeting. I'm pleased that we're able to be here in person at this AGM as well as online. The challenges of the aviation industry over the past years are well known. At all levels tend to review, respond and reimagine. Our relentless focus has had to be on surviving. And now the renewed focus is on being sustainable. I'm incredibly proud of what Alan, the management team and our people have done to drive our recovery and long-term sustainability. To get airline back from a standing start is very difficult. Like all airlines, we've had our hiccups, that the team have listened and is responding. My experience in other heavily disrupted industries, such as the university sector have held in formal discussion around need for rapid response, listening to our stakeholders and finding solutions to the physical challenge of bringing many people together in the context and aftermath of COVID. Additionally, each of the industries they operate in are thinking closely about how best to navigate the worth of talent, and that experience has been very relevant to Qantas as we have struggled with absentees and due to COVID flu and moves to other industries. My involvement in the energy industry makes me especially proud of the work done by the team in introducing our climate action plan and the subsequent announcement of the Sustainable Aviation Fund, as Richard mentioned earlier. This will not only accelerate the [indiscernible] industry in Australia, it will make Qantas a leader in the aviation space. My background as you heard is in finance and legal, and I'm now involved in the supermarket industry, energy and mining services industries. I brought that experience into all areas of Qantas, particularly looking and working with disruptive supply chains, delivering for our people during change and, of course, serving our customers. We're all focused on that. And as you've heard this morning, continue to work hard on that. Thank you for the privilege of being a part of this extraordinary organization to date. With your support, I would be honored to work with my fellow Board colleagues and management to ensure Qantas remains sustainable in the long term.

Thanks, Maxine. And to the directors with Ms. Brenner abstaining unanimously support her reelection and recommend you vote in favor of this resolution. I now formally propose the following ordinary resolution. Maxine Brenner, 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. I'll now take any questions on Maxine's election, starting with any in the room or online, Annabel?

Chairman, there are no questions online or on the phone.

Thank you. If there are no questions, I'll turn to the details of the proxy votes received prior to the meeting, on the screens are details of proxy votes received in respect of Maxine's reelection. For those voting today, please cast your vote now if you haven't already done so. And Maxine, based on those numbers and the votes in the room, congratulations on your reelection. Third and final reelection of a director is that of Jacqueline Hey being Item 2.3 of the Notice of Meeting. Jacqueline was appointed to the Qantas Board in August 2013. She is the Chair of the Remuneration Committee and a member of both the Audit Committee and Nominations Committee. The Board believes that Ms. Hey's extensive financial, operational and international experience, together with her experience as a professional director, enables her to make a significant contribution to the Board, the Audit Committee, the Nominations Committee and as Chair of the Remuneration Committee. I'd now like to invite Jacquie to say a few words.

Thank you, Richard, and I think it might be good afternoon now without checking the clock, but good afternoon to all our shareholders today joining us here. It is likely to be back in-person and also for those watching online. Prior to joining the Board in 2013, my feelings about Qantas, we like so many other Australians who do a lot of traveling. And perhaps even those who don't do a lot of traveling, but still have a personal connection to the national carrier. It does feel like our heart of our national identity. I looked abroad for a number of years. And whenever I was returning home to Australia, I felt the moment that I stepped to board a Qantas aircraft. Over the past 9 years, I've had the honor of getting to know the people of Qantas and are seeing their enormous commitment and professionalism, most especially during the enormous challenges that we've passed and had over the past few years. Since I was last of reelection to the Board, I've taken on the role of Chair of the Remuneration Committee. One of the things I am most proud of over the past year, in particular, has been the work we've done as a Board, along with Alan and his team to recognize and reward the contributions of Qantas employees in the airline recovery from the pandemic. The employee reward and retention program we announced in February is on track to make more than 17,000 nonexecutive employees, shareholders in the company rewarding their efforts and recognizing the path that they play in the success of the company. And last month, we extended that program to cover the more than 3,000 employees who have joined us in the past year. In October, we also adjusted the wages policy so that as the company returns to profit, we're returning higher pay rises. Outside of Qantas, my experience is in the areas of finance, technology, energy and large-scale infrastructure. My focus on technology, in particular, is important in the Board room to ensure Qantas' both the technical and digital capabilities to continue to support good customer service going forward, and particularly in these times to support a robust cyber preparedness regimes. I hope that I have your support for reelection, and I look forward to having the opportunity to continue to serve Qantas and all its stakeholders. Thank you very much for your consideration.

Thanks, Jacquie. The directors with Ms. Hey of abstaining unanimously support her reelection and recommend that you vote in favor of this resolution. I now formally propose the following ordinary resolution. Jacqueline Hey, a nonexecutive director retiring in accordance with the constitution being eligible, is reelected as a Non-Executive Director of Qantas Airways Limited. Are there any questions, Annabel?

Chairman, we have question from Stephen Mayne. Given that Ms. Hey Chaired the reelection of the chair resolution, you see officially the second highest ranking director. Also, after 9 years on the Board, is this likely to be her final term. Could Richard and Jacqueline comment on whether Qantas should have a Deputy Chair?

Thanks again, Stephen. We've made no decision on any sort of -- we don't have term lengths as Jacquie said earlier, and we've made no decisions on when Jacquie may retire as a director. In terms of Deputy Chair, I don't think it's necessary, but we've always had an understanding at Qantas that the Chair of the Audit Committee, will stand in if the Chair is unavailable for any particular reason. Nothing else, Annabel? Okay. There's no questions. I'll turn to details of the proxy votes received prior to the meeting on the screen are details. Proxy votes received in respect of Jacquie's reelection. For those of you voting today, please cast your vote now if you haven't already done so. But based on those numbers, Jacquie, congratulations on being reelected. We're now going to turn to remuneration matters. Before considering the remuneration-related resolutions, we'll hear a few remarks from Jacquie Hey, Chair of the Remuneration Committee, as we just said. On the Qantas approach to Rem this year's remuneration report. During her address, Jacquie will specifically deal with the remuneration-related themes emerging from the questions submitted in advance of this meeting. So I'd now like to invite Jackie to again address the meeting.

Thank you, Richard. I would like to present this year's remuneration report to Qantas shareholders. This is my first report as Chair of the Remuneration Committee. And I'd like to thank my predecessor, Paul Rayner and my fellow committee members for their support. As Richard said earlier, FY '22 was clearly a challenging year for Qantas as our financial results reflected. In response, the Board continued to take a prudent approach on remuneration, and let me address the key areas. First, base pay or annual salary. In line with the group's 2-year wage freeze, there was no increase to base pay for the CEO and executive management in FY '22. During the pandemic, Alan and our leadership team voluntarily took pay reductions in both 2020 and 2021 financial years. In FY '22, Alan and the team received their contracted base pay. This was not a pay rise, as some have suggested, but return to the salary level that is in their contracts. The only difference is the salary that they had sacrificed in the prior 2 years. Overall, the CEO's pay level was 77% below the pre-COVID level and executive pay on average 58% below. And for the record, Alan Joyce's contracted base pay has not changed since 2018. Secondly, we also did not operate our annual incentive plan, which we refer to as the short-term incentive plan in FY '22. This was the third consecutive year of no annual incentive payments for Qantas executives. That reflects our financial situation, not the performance of our executives. Under very challenging circumstances, Qantas Group has again outperformed most of our global airline peers, which is a credit to our management. Recognition of our talented people became a key focus during the year. After 2 years of COVID, we had seen a rise in attrition across our broader executive ranks. And the need for retention was raised at last year's AGM. And in February this year, we launched our recovery retention plan. This is a one-off 2-year performance incentive tied to the delivery of Qantas' COVID recovery plan. With our performance now rebounding strongly as seen in last month's market update, it's easy to forget that 12 months ago, as other industries were recovering from COVID, Qantas was under immense strain. It was in this context that the recovery retention plan and the performance measures that would apply to it were developed. We made the deliberate choice at the time that all of the performance measures in the plan must be satisfied for vesting to occur. The specific performance targets are: firstly, that the group delivers its $1 billion cost reduction program target by 30th of June 2023. Secondly, the net debt is below the top end of the net debt range, as said as part of the group's financial framework as of the 30th of June 2023. And finally, that the group is profitable on an underlying profit before tax basis in FY '23. The plan includes executive management and the wider executive cohorts as well as approximately 20,300 eligible nonexecutive employees. For many nonexecutive employees, as I said previously, it provides an opportunity to become a Qantas shareholder for the very first time. Shareholder approval is being sought at this meeting for the CEO's participation in the recovery retention plan as this AGM is the first time we've had a chance to seek this approval. A question has been raised is on why there is a cash alternative if shareholder approval is not obtained. The answer to that is relatively simple. We think it's critical that the CEO is aligned to driving the recovery plan and is subject to the same recovery and retention plan performance measures as everyone else in the company. And as the recovery retention plan replaces the short-term incentive in FY '22, we do have a contractual obligation to provide an incentive opportunity to the CEO. We would like that opportunity to be through the RRP and to be all in equity. The Board, of course, retains discretion to ensure pay is aligned with performance. The final element in our remuneration framework is our long-term incentive plan or LTIP. This is a 4-year plan with performance and service conditions over a 3-year period, followed by a further 1-year restriction on any vested shares. We measure performance by Qantas' relative total shareholder return, or TSR, against 2 peer groups. One is other companies in the ASX and the second is a peer group of global listed airlines. In the 2020 to 2022 LTIP, we partially achieved the performance hurdles as we ranked in the top quartile of our airline peer group. We did not meet our performance here against peer companies in the ASX 100. Qantas' TSR has outperformed most airline peers over the past 3 years, and in fact, Qantas has achieved a top quartile performance in each of the past 7 rolling 3-year periods, and this is quite an exceptional performance. Based on this performance, 50% of our executives LTIP rights vested and converted to shares with the remaining rights lapsing. For the third year in a row, Alan Joyce's defer a decision on the vesting of [indiscernible] rights. The decision on vesting these rights as well as Alan's rights from LTIPs concluding in 2020 and 2021 has been deferred until August next year. We've seen reports, including from media and proxy adviser ISS which have described Alan's remuneration is excessive. These analysis either ignore previous remuneration sacrifices Alan has made or are measuring his salary against what we think are nonrelevant comparator sets. Qantas is an ASX 50 company. The Board's remuneration approach, benchmarks, our executives pay against ASX 50 companies, which are comparable in scope, geographical reach and complexity. And most of this commentary also does not consider the CEO's deep experience and importance to delivering our recovery plan. Turning briefly to our remuneration framework for the current year, FY '23, we've continued to evolve the performance measures for our executive team. Anticipating a return to more normal trading conditions, we'll return to using underlying profit before tax as our primary financial scorecard measure. We've also increased ratings in our incentive plan to customer service, including delivering better operational performance in our performance measures. And for the first time, we've introduced an environmental performance measure, tracking the progress of our climate action plan. The environmental measures will be included alongside other ESG measures. In conclusion, the key point I'd like you to take away is that the Board's aim is to ensure the pay outcomes continue to be aligned and appropriate for the circumstances in which Qantas, its people, its customers, and most importantly, its shareholders are operating. We will continue to review the remuneration framework, and we welcome your comments and suggestions for any further improvements. I'll now hand back to the Chairman, who will present the resolutions.

Thank you, Jacquie. So next 2 items of formal business for this meeting are to consider the proposed award of rights to your CEO, Joyce's group's recovery retention plan and long-term incentive plan. These awards are explained in the notice of meeting. However, I'd like to reiterate an important point on the operational -- both plans being the right to vote, will only vest in vote to shares if the respective performance conditions are achieved. As Jacquie detailed in her address just now for the recovery retention plan rights to vest in full, the following performance hurdles must be met. Because group meets its $1 billion recovery program target by June 30, 2023. As at June 30, 2023, Qantas' Group net debt is below the top end of the net debt range as approved by the Board in accordance with the group's financial framework and the Qantas Group is profitable on underlying profit before tax basis for financial year '23. All shares that may be awarded under the 2022, '23 RRP will be newly issued shares. ASX listing rule 1014 requires the shareholder approval of Mr. Joyce's participation in the RRP is sought. If shareholder approval is not obtained, then subject to the achievement of the performance and service conditions as described in the notice of meeting, Mr. Joyce will receive a cash payment at the end of the performance period equivalent to the value of the rights which would have vested and converted shares had shareholder approval being obtained. The RRP award opportunity for the CEO has been set at 150% of fixed annual Rem on a face value basis. I now formally propose the following ordinary resolution, that Alan Joyce, the Chief Executive Officer of Qantas Airways Limited is committed to participate in the recovery retention plan as contemplated by the explanatory notes accompanying the 2022 notice of meeting. I'll now take any questions on this item. Annabel?

Chairman, we have a number of similar questions relating to CEO remuneration. So we will take a question from shareholders, Patrick and Jennifer Brian, which covers core themes raised. They ask, how can you justify Alan Joyce receiving large bonuses when Qantas retrenched thousands of loyal employees despite accepting taxpayer funding through job keeper.

So I want to make a couple of comments on that. Firstly, yes, we had support from the government over the last 3 years. And that support was very important. Just under $1 billion of about $2.3 billion in support went directly to our employees in job keeper payments, and the balance was basically to support flights we did. I think we did something like 3,700 freight flights, we've done 400 repatriation flights, and we kept flying between Australia's capital cities and our regional towns at time when there were no customers flying. And so the government support underpins the cost to us of delivering that service to Australia through the pandemic. So certainly, Alan didn't benefit in any of that. Alan, over the last 3 years has gone 4 months without any pay in a number of months with reduced pay. None of Alan or all the senior executives have taken short-term incentives over the last 3 years. And Qantas is the only company in the ASX 50 where that has been the case. So I think we've been an exemplar in terms of executive remuneration over the last 3 years. And I think it's incredibly important that Alan and the team, given what they've done, are part of the RRP. The Board was very concerned over a year ago about retention of key people in the organization. We asked Alan, as I said earlier, in 2020, to continue serving as CEO to sees us through the pandemic and he agreed to do that. And we -- and a number of the senior management team have also made extraordinary sacrifices over the last 2, 3 years. And their plans may otherwise have been quite different to support this organization. So I want to thank on behalf of the Board for that considerable sacrifice they've made. So the Board is very strong on the view that Alan should be able to participate in the RRP.

Chairman, may I please introduce Malcolm Fraser.

Thank you very much, and thank you for the opportunity for being able to ask or make comments in my case, on the executive remuneration package as a whole, not just Mr. Joyce's. When I recognize the restraint, it's been applied over these last few years, and I've listened to what Mr. Goyder has said, and I'm very proud to be a shareholder in a company which has this, I say moral, well, ethical standard applicable to the executives. My concern is that -- but also I recognize that Qantas is having to operate out of a high-wage country. And I think this is a challenge in itself, whether it's a pandemic or not. What I am concerned about, though, is the growing gap between the have and have-nots in Australia. But I find that I can't really vote for the executive remuneration plan. But nevertheless, I can envisage another plan, which perhaps might be applicable in the future, which will demonstrate how our company in this challenging aspect, I think all companies actually have to deal with this growing gap between the haves and have nots. And I see our company perhaps in the years to come, may work out how this can be done and indeed demonstrate how we are at the spirit of Australia. Thank you very much.

So thank you. I do hope that you will vote to support this. So I think we would all -- I mean, Australia, I think, is an amazing country and we have an incredible standard of living. And I don't think any of us are satisfied that there are some parts of the community that don't share any of the benefits, whether they're homeless, whether they're part of indigenous population and some other people. But my view is that we -- in creating wealth, we can then have a really good debate about how that wealth is distributed, but it's pretty important that we build the pie. And I think Alan and his team are showing now the opportunity to build that wealth in this business, and that's going to allow us to buy aircraft, employ more people, reward our shareholders and reward our own people and reward our customers as well. So I hope that you can support it, but I appreciate your comments. Thank you. Annabel, anything -- you said microphone 2.

Chairman, may I please introduce [indiscernible].

I'd like to agree with the previous shareholder. But in fact, I find it hard to understand how that kind of quantity of remuneration on top of a base salary that should incentivize your desire to see Qantas rise itself from the aces like Phoenix. I found it hard to understand how that kind of remuneration should be necessary. And I also find it slightly ironic that while you're waiting to come into this particular theater that it says outside people today are hungry for love, for understanding love, which is much greater than which is the only answer to loneliness and great poverty, Mother Theresa. So I found it really kind of ironic that, that signs should be outside where a lot of the voting today is actually, totally in relation to Alan Joyce's incentivized gathering of extra assets beyond his base salary, which in itself, I think, would be quite adequate to fill you had a great incentive and desire to put Qantas steps where it was pre pandemic. And also in relation to uncle Michael's original introduction today, that if Qantas really sees itself as a world leader and a top company in Australia, an icon for Australian people, why scholarships aren't being offered to the indigenous population, of course, training them as pilots and other staff for the airline. It's a wonderful idea. But also there should be scholarships. There's a scholarship. He certainly left his legacy. Perhaps Qantas could look at that kind of thing. But I would really like to hear from Mr. Joyce himself why he feels that it's necessary to have an incentive above a base salary to actually strive to put Qantas back to where it was pre-pandemic.

Thank you. I'll get Alan to respond on the indigenous scholarship issue. Executive remuneration is always a challenging item. I've been a CEO, myself and I've sat where Mr. Joyce is sitting and had shareholders like you say, how much is enough. One of the challenges we've got in setting remuneration is that we're competing in a very competitive world mark in terms of capable executives -- and airline executives is a much even tighter market. We think for all the reasons I've outlined earlier and that Jacquie outlined as well that our remuneration settings at Qantas are competitive and provide the appropriate incentives for performance that reward all our stakeholders. And your suggestion which on the face of it has -- is understandable, in real world just doesn't stack up against the opportunities that people can have elsewhere. And the reason we like these schemes is because it's equity based -- and that means that the -- in this case, the CEO, but also the executives have very strong alignment with shareholders. Alan, do you want to talk about indigenous?

Yes. So I highly recommend that people read our indigenous reconciliation action plan because it covers all of these areas in quite good detail. We do indigenous scholarships with a number of different areas including through an area like Korea trackers where we do sponsor a number of indigenous people. We did switch a lot of stuff after the COVID. We had to because we have no cash coming in, but we reactivated all of that activity, and it is covered in immense detail. But I think you'll be proud of what your company is doing in this space. As I said, there's only a handful of companies that get to the Elevate status, there is a reconciliation action plan, Qantas' [indiscernible] because it was a number of things across the Board that you still all of academy or for graduates, for people trying to commit to management, indigenous kids across the Board, and we do sponsor a lot in indigenous activity in local communities. Have a look at the plan, I think you'd be pretty impressed there.

Annabel?

Chairman, we have another question from shareholders, Stephen Mayne. Given the interesting discussions across a range of topics today, including on this remuneration report item, could the chair undertake to make an archived copy of the webcast available plus a full transcript of proceedings available on the company's website.

So again, thanks, Stephen, for the question. We don't see much value actually in transcripts, but we do keep our webcast, and this one will be on our website. Andrew, following the meeting? And they go back to 2014, the webcast previously. Nothing else, Annabel.

Chairman, there are no more questions online or on the phone.

Thank you. so on screens, details of proxy votes received in respect of the allocation of rights to the CEO under the recovery and retention plan. As outlined in the Notice of Meeting, Qantas will disregard any votes cast on this resolution by Alan Joyce, his associates and his closely related parties, except as directed by any proxies. Proxies cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chairman of the meeting, I intend to vote all undirected proxies in favor of this resolution. The directors with Alan Joyce abstaining, recommend that you vote in favor of this ordinary resolution. For those voting today, please cast your vote now if you haven't already done so. We'll now move to the proposed vote of rights under the long-term incentive plan. The long-term incentive plan rights to vest in full, our total shareholder return needs to outperform 75% of the companies in the ASX 100 as well as 75% of the global airlines peer group over the 3-year performance period. Should these conditions be achieved, the rights will vest and convert to Qantas shares on a one-for-one basis. These shares would then be subject to a 1-year holding lock. If the performance conditions have not achieved the right slabs and those shares are awarded. As outlined in the notice of meeting, Qantas will disregard any votes cast on this resolution by Alan Joyce, his associates and his closely related party except as directed by any proxies. Proxy votes cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chairman of this meeting, I'll intend to vote all undirected proxies in favor of this resolution. The directors with Alan Joyce abstaining recommend that you vote in favor of this ordinary resolution. I now propose that Alan Joyce, the Chief Executive Officer of Qantas Airways Limited, is permitted to participate in the long-term incentive plan as contemplated by the explanatory notes accompanying the 2022 Notice of Meeting. I'll now take any questions on this item. Annabel?

Chairman, we have another question from Stephen Mayne on the LTIP resolution. Big and small shareholders often have a very different perspective on executive pay resolutions. For instance, at the recent AGM, only 47% of voting shareholders supported the LTI grant, but they represented 98.7% of voted stock. When disclosing the outcome and voting on all resolutions today, including this LTIP grant, could you please advise the ASX how many shareholders voted for and against each item similar to what happens with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of net cash [indiscernible] so far this AGM season.

Andrew, do you want to respond to that, the company Secretary.

Thanks, Steven for the question. We'll report the results of the meeting in accordance with the ASX listing rules, as you know, Stephen, those listing rules have developed after wide consultation amongst investors across the -- probably reflect better the feeling of investors as to what's required and what's important to gain a feeling for the votes in this AGM.

I might mention that one of our significant shareholders had a bit of a markup in their voting and they have advised us that they would have voted in favor of all resolutions today. They're about 3% shareholders. So that would have moved the numbers that have already been disclosed further in support. Annabel, anything else?

Chairman, there are no other questions online or on the phone.

Microphone 2 in the room.

Chairman, may I please introduce again [indiscernible].

This question is obviously directed to Mr. Joyce as well. During the period in which you've actually been the CEO of Qantas, you've introduce things that have not been seen before. There was a reduction in the value of the shares that were devalued so that everybody owns less shares in order to align the books in some way. And also during that period, obviously, before the full effect of the pandemic it was known that it was announced that there would be a dividend to shareholders that was actually look forward to -- many shareholders, I do say that was in actually that [indiscernible] never given. So is that outstanding dividend ever going to be delivered in the future that was promised. And the other thing, of course, is that there have been no dividends during the pandemic, which is to be expected because it's been a tough time universally for people across the world. There's been no dividends offered by Qantas because of the severe effect that pandemic has had on international and domestic travel. So that's understandable. But in view of that, how can that kind of remuneration on top of the base wage again be seen as justifiable when shareholders are no longer getting dividends.

So I'm not sure if I understood the first part of the question. So on the second part, I'll get Alan to just talk about the capital return. On the second part, clearly, it was disappointing for us not to proceed with the dividend payment, which I think was due in early 2020, wasn't Andrew? But we're at that stage focused on one thing, which is liquidity to ensure we had no idea. And I don't think anyone did how long and how bad this pandemic would be. And we have to batten down the hatches in every respect to ensure that we survived the pandemic and that included, unfortunately, not proceeding with the dividend payment. At some stage in the future, we hope to reward shareholders in dividend payments as well as what we've been doing in recent times, buying back our shares when we're in a position to do that in an efficient way, which means we've got franking credits, i.e., we've started paying tax again. Alan, do you want to talk about the capital return?

Yes. So there's a number of different ways of returning money to shareholders. And one of the ones that we did a few years ago was capital return, which is a very tax effective way of giving surplus cash that we have after the shareholders, essentially, does reduce the number of shares. But what that does is it potentially enhances -- what does enhance the earnings per share and improves the share price. So when you say Qantas share price performance, particularly over this period of time, we've seen total shareholder return, which is the measure we have significantly improved compared to airlines, Jacquie showed the slide. We've been the top performer, nearly #1 and #2 in airline performance in total TSR, because our share price has either maintained or improved over that period of time. As Richard said, I mean, the big issue with dividend is because of the tax losses that we have had is this issue of not being able to pay dividend -- after franked dividend and the strong feedback from Australian bank shareholders, buybacks, capital returns if they were appropriate, are a better, more tax effective way of doing that and to enhance all shareholder return -- and we can see that through our history as we've gone there.

Thanks Alan. So I think I'll move on. I'll turn to the details of the proxy votes received prior to the meeting. On the screener details of the proxy votes received in respect to the allocation of rights to the CEO under the long-term incentive plan. I think as I've said and outlined in the notice of meeting, [indiscernible] will disregard any votes cast on resolution by Alan Joyce, his associates and his closely related parties, except as directed by any proxies. Proxy votes cast by key management personnel and their closely related will also be disregarded where the votes are undirected. And I think, as I said, I intend to vote all undirected proxies as Chair in favor of this resolution. For those voting today, please cast your vote now if you haven't already done so. We'll move on to the next item of business. The fourth and final item of formal business of this meeting is to consider an advisory resolution to approve the remuneration report. The remuneration decisions made with the Board during the year were just outlined by Jacquie in the details in the remuneration report. Qantas will disregard any votes cast on this resolution by key management personnel as remuneration is detailed in the Rem report and their closely related parties, except if cast as a proxy and the votes are directed. As Chairman of this meeting, I intend to vote all undirected proxies in favor of this advisory resolution. The directors recommend that you vote in favor of this advisory resolution. I now formally propose the following advisory resolution that the remuneration report for the year ended June 30, 2022 set out in the directors' report is adopted. I'll now take any questions on this item. Annabel?

Chairman, we've received a number of similar questions focused on executive remuneration. So we will take a question from shareholder, Alexander which covers the core themes raised. He asks, will executives to be taking bonuses this period despite the poor performance of the business.

I think Jacquie has answered that pretty well. Executives haven't taken any short-term incentives over the last 3 years. Long-term incentives have been awarded in equity. And Mr. Joyce has deferred taking any of that -- any of his long-term incentives over the last 3 years. The RRP that we've just talked about will vest if the 3 performance hurdles are achieved next year. And we've outlined in the remuneration report that for the financial year, we're now in, i.e. the '22-'23 financial year, that will be the short-term incentive, and we've outlined and Jacquie disclose those as well outlined the key elements of that, that will go to both short-term and long-term incentive any awards to be paid next year. Jacquie?

I think you've covered it all well. Thanks, Richard.

Thanks. Annabel?

Chairman, there are no other questions online or on the phone.

Microphone 4.

Chairman, may I please introduce Malcolm [indiscernible].

Thank you very much. And may I also just make the point how grateful I am for our Board, my disagreement with the pay system should in no way indicates that I'm unhappy with the Board. I am very happy with the Board. We have done extraordinarily well as an airline over these last years. And I think as Mr. Joyce, I didn't know until today that Mr. Joyce on the January 5, 2020, actually identified the source of this [indiscernible] virus. He must be clued up and listen to what's going on around the world. As pilot say, he was situationally aware, and for a CEO that is absolutely essential. And I just acknowledged and owed by his judgment and situation awareness. But I'd just like to ask a question about this remuneration report. I think there was a real change some years ago about a remuneration report had to be voted on and that if a certain percentage of shares voted against it, the whole Board had to resign or something. Is this what we're talking about here.

So is -- it's with that. First, I appreciate the comments. And that situationally aware -- I talk about -- able to see around corners and it's actually pretty helpful. And the last 3 years has been more than helpful. And I think Alan and the team have been very good at that. And I know Alan would so that his management team have been a key part of that, which they clearly have. On remuneration reports, as I said earlier, it's advisory only, if there was more than 25% vote against the remuneration report, then in 2 years in a row, then there's a Board spill. So that's the way it works. So a number of companies in Australia have had 1 year of more than 25% votes cast against remuneration reports. Very few there are some, I think, Andrew, but very few have had 2 in a row. Mostly because -- I mean, I think as a Board, we're very achieved to the shareholders' needs and requirements. And I think today's discussion has been good on remuneration, but I think we've come a long way in terms of developing remuneration schemes that are well aligned with the interest of all stakeholders. And if you look at the Qantas annual report, I think you can see that our remuneration very closely aligned with outcomes for shareholders, which is what we designed.

I think that we didn't have a vote against this last AGM.

And I'll put up the results now. Annabel, anything else?

Chairman, there are no other questions online or on the phone.

Okay. So on the screen are details of the proxy votes received in advance of the meeting in respect of this resolution. And again, if you're voting today, please cast your votes now if you haven't already done so. So all resolutions have now been dealt with, which concludes the formal business of the meeting. So I now declare the meeting closed. Shareholders and proxy holders will have 5 minutes from now to complete their voting via the online platform. Once all votes have been accounted for and verified by the share registry, the results of the AGM will be lodged with the ASX as soon as possible, which will be later this afternoon. On behalf of the board, can I thank you all again for your ongoing support and for joining us today at our 2022 Annual General Meeting. I appreciate the time and questions in the room and online. I think it's been a very constructive and -- an AGM that's constructive and hopefully, one where we can look forward with great optimism in terms of the future of the airline. And for those of you in the room, hopefully, you can join the Board now for a live refreshment in the foyer. Thank you very much, everyone.