Qantas Airways Limited (QAN) Earnings Call Transcript & Summary

Good morning, everyone. I'm your Chairman of Qantas, Richard Goyder, and welcome to the 2023 Qantas Annual General Meeting. Firstly, can I, on behalf of the Board and in the spirit of reconciliation, the Qantas Group acknowledges the traditional custodians of the country throughout Australia, and we pay our respect to Elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Islander people joining the meeting today. I acknowledge the Wurundjeri people of the Kulin nation, the traditional owners of the land on which we are meeting today. The AGM is an important event for Qantas and its shareholders. And on behalf of the Board, I thank you all for participating, whether you're in the room in person or joining us online. Before we start, let me introduce your directors. From my far left, we have Michael L'Estrange; Maxine Brenner; Todd Sampson; Dr. Heather Smith; the Chief Executive Officer, Vanessa Hudson; General Counsel and Company Secretary, Andrew Finch; Belinda Hutchinson, who chairs our Audit Committee; Doug Parker; Jacqueline Hey, who chairs the Remuneration Committee; and Tony Tyler, who chairs our Safety, Health, Environment and Security Committee. All directors up for election or reelection today will briefly address the meeting prior to the vote for their respective resolution. Also here today is Julian McPherson, [indiscernible] and David Riches, the senior KPMG auditors who are available to answer any specific questions you may have about the conduct of the financial year 2023 audit. I'm going to start today's meeting with some opening remarks and then hand over to Vanessa for some comments that she'll make. After Vanessa 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 any of your questions. I'm pleased to confirm that we have a quorum present, and I formally declare the 2023 Annual General Meeting open. Our AGM is in a different capital city each year, and we're very pleased to be back in Melbourne. We have a full agenda, and I know many of you will have questions for the Board. But I want to start by speaking plainly about the recent past before I hand over to Vanessa to talk about the future. Looking back at my comments at last year's AGM, I acknowledged that our post-COVID return to flying was a lot more challenging than expected and that we had let customers down. At that time, our team was working hard to fix the fundamentals like punctuality and cancellations, which have now materially improved. And our safety performance, which comes above all else remains strong. But it's clear there's been a substantial loss of trust in the national carrier, and we understand why. There are things we got wrong, there are things we could have handled better and should have handled better, things we should have fixed faster. And for all those things, we apologize. We also acknowledge the impact of the ACCC's allegations and the high court decision on the ground handling matter, which land within 2 weeks of each other. These are serious issues in their own right, and I'll address both later in the meeting. As part of our learning from everything that has happened, the Board has commenced a process of independently reviewing key governance matters over the past 12 months, and we'll share the outcomes of those by the middle of next year. While there is important context for each issue, we know that leadership renewal is an important part of restoring confidence. That renewal started in September with Vanessa Hudson taking over as Group CEO. It's fair to say Vanessa has hit the ground running. And with our new leadership team, is working hard on delivering material improvements for our customers and our people, and she'll talk about that shortly. At the Board level, Michael L'Estrange announced his retirement at this AGM last year. Maxine Brenner and Jacquie Hey have announced their intention to step down at our half yearly results in February next year to facilitate more renewal. On behalf of the Board, I'd like to sincerely thank Michael for his years of service to the Board. And given this is their last AGM, extend that to Maxine and Jacquie for their years of service as directors. Their professionalism and due diligence -- and diligence, sorry, throughout that time, including through the existential crisis Qantas faced during COVID was invaluable. I also want to acknowledge the contribution made by Alan Joyce. Alan was the founding CEO of Qantas for 5 years before becoming CEO of the group for 15 years. He guided this company through some of its biggest challenges, which meant making some tough decisions. He also championed more direct flights, including Project Sunrise and was instrumental in striking the deal with Emirates. These are things that are all important to the company's long-term success. Indeed, it is easy to forget the challenges Qantas faced in surviving through the pandemic, effectively closing down and restarting an airline safely and ensuring we had a future. Tough and difficult decisions were made through that period. And as we've said many times, we didn't get them all right. The Board and executive at all times were focused on doing all we could to remain afloat, recover quickly when borders opened while never compromising on safety. Last month, I announced my plans to retire as Chairman before the next AGM. Between now and then, my focus will be on supporting Vanessa and her team any way I can, working with my fellow directors on the Board renewal process and doing all we can to strengthen Qantas. That process is already underway. Today, we have two new directors plus Vanessa as Managing Director, offering for election. Doug Parker and Dr. Heather Smith, bring a wealth of experience in aviation and public policy that will be invaluable in tackling the challenges and opportunities ahead. Two directors: Todd Sampson and Belinda Hutchinson are standing for reelection. As well as their individual abilities, returning these directors together with Tony Tyler is an important part of balancing renewal with continuity. In the lead up to this AGM, I've spoken directly with many of our shareholders. We've also seen votes cast in advance of today's meeting as well as recommendations from proxy advisers. It's clear that there will be an overwhelming vote against our remuneration report, which is almost a complete reversal of the 90-plus percent support in recent years. Jacquie will take you through the rem report in some detail to explain the steps we've taken and why. But please know this. we hear the message through strong vote sense, particularly in response to broader frustration with past events and it galvanizes our efforts to restore your confidence. While the Board and management will continue to reflect, I'm also struck by something I heard at one of our pilot unions had recently. Aircraft don't have rearview mirrors, just two big windows facing straight ahead. We have some big challenges in front of us, but we're in a strong position to meet them and to make the most of the opportunities on the horizon. Travel demand continues to be strong. Our balance sheet is in excellent condition arguably the best since privatization. Our fleet renewal is underway with new aircraft that will help us meet our sustainability targets and open up more network options. And we're investing in people with more training, more jobs and more promotions. On behalf of the Board, I'd like to thank all our 25,000 employees, our people for their incredible passion and commitment to the group. We see that behind the scenes, whether it's in our engineering or our operations center, our customer center at airports and, of course, onboard our aircraft every day. Thank you to those people. I'll now hand over to Vanessa to say a few words. Thank you.

Thank you, Richard. It's an honor to be here today to speak to you as my first AGM as the group CEO. Since I was announced in this role, I've had a lot of conversations with our customers, our people and also shareholders about where we are and about where we are heading. Reflecting on what I've heard, the disappointment and the frustration is clear. As Richard said, there are many things, big and small, that we didn't get right. And for that, we have sincerely apologized to our customers, our people, and today, I apologize to you, our shareholders. As the new CEO, I am determined to make Qantas one of the most trusted brands in the country again. determined to be the company that you, as owners are proud of, that delivers value for stakeholders and gets the balance right. Doing this won't be easy, and it will take time. But I'm confident we'll succeed because of the incredible passion our people have for Qantas and what it has long represented. From a management perspective, we need to give our people the right settings and the right tools to deliver for our customers. That work has already started, and I'd like to share a few examples with you now. Knowing that we will rightly be judged not by what we say, but what we do and how we behave. Firstly, we are investing. We've materially increased our spending on customer experience in this financial year, which is starting to show up in the service that we deliver and the value that we offer. One example of better value is the changes that we have made to our frequent flyer program. Last month, we brought forward the release of 35,000 rewards seats, seats that you can secure with the least number of points for members. On top of that, we have added a further 6,000 seats to Europe for summer peak next year. At the same time, we offered a 50% discount to the number of points required for any premium international seat on any Qantas flight in our system. These are the things that we've been able to do quickly, but we've been also working on more permanent improvements to our frequent flyer program for several months, and that we look forward to sharing with you early next year. More broadly, we understand the importance of affordable travel for everyone. And we will keep adding to the 18 network-wide sales across Qantas and Jetstar that we have done many times over the past 12 months. That's on top of the everyday low fares offered by Jetstar, which is on track to carry 10 million people on fares for less than $100 this calendar year. We want to be easier to deal with. So we are reviewing all of our commercial policies to make sure they are fair. A small example of something that we have already done is to remove the change fee when a customer wants to change their name on their ticket if they have made a mistake. We know COVID credits have also been a source of frustration for many customers, and we have taken some big steps to fix that. In August, we announced COVID credits will now never expire. In September, we started SMS our customers on top of the many reminder e-mails that we have been sending for many months. And we've added 100 specialist agents to our call centers to make sure that we have resources available to help redeem when customers call us. Our efforts are working, and we have seen an acceleration in customers claiming a credit or a refund in the past months, but there is still a lot of work to do. And we will continue to drive until all credits are used or refunded including working with our banking partners to help automate refunds. We are also reviewing our call centers more broadly with extra training of agents, but also considering whether we need to bring more of this important task back onshore. Technology also has a role to play here. We've invested tens of millions of dollars to rebuild the Qantas app from scratch, making it easier for people to manage their journey from changing a flight to tracking a bag. New technology is also arriving in the form of new aircraft. Since our AGM last year, the group has taken delivery of 11 new planes. That includes 8 Airbus A321 long-range aircraft for Jetstar, which have helped us increase capacity on leisure destinations like Bali. We have also taken delivery of 3 787s for Qantas International, helping us add more capacity, but also launching Perth-Paris to July next year. By Christmas, our first A220 will arrive for Qantas Link, an aircraft that has the ability to fly between any two ports in Australia, burn up to 20% less fuel and make flying much less noisy by at least 50%. By the end of 2024, we'll have our first A321 XLR for Qantas Domestic. And beyond that, we'll start taking delivery of A350s and more Boeing 787s for Qantas International. These are big investments that will deliver for our customers, the communities that we serve, our people and you, our shareholders. And they are only made possible by the continued strength in our balance sheet. Ultimately, it is this cycle of investment and return that we are focused on. Whether it's major fleet decisions or a series of small policy changes, all stakeholders will balance it if we get the balance right. I'd like to take this opportunity by thanking our people. Across Qantas, QantasLink, Jetstar freight and loyalty, they do a fantastic job every day. Their commitment to safety and our customers is absolute, and this has never ever been in doubt. The simple fact is that we had 900 volunteers recently to operate our special repatriation flight to Tel Aviv. And the way our operational staff mobilized so quickly to make it happen tells you everything about the commitment and the capability of the people within the Qantas Group. I acknowledge that relations with our people have been strained, particularly by the decisions that we had to take during COVID. I am, and we are determined to rebuild those relationships moving forward. And while this is a shared responsibility, the creation of a Chief People Officer, joining our leadership team in January is a key part of that. We also want more constructive relationships with our unions. And since becoming CEO, I have reached out to the union leaders of our key employee groups to express my desire to reset that relationship. Those conversations have been positive, and I really do appreciate that and thank them for their time and effort. It's important to recognize that we may not always agree. And it's critical that the Qantas Group remains competitive, but we can look for outcomes that are sustainable and that benefits everyone. Later this month, Qantas will turn 103. There are very few companies in Australia and even fewer airlines globally that have reached that milestone. While we arrived at this moment with some big challenges, we also have some enormous opportunities and an exciting future, a future that will see our brand recover, our fleet renew, our network expands, our emissions reducing, our people offered many more opportunities. Collectively, I am confident that we have the experience, the focus, the energy and the financial strength to achieve this, and we intend to restore trust in the process as well. Thank you.

Well, thank you, Vanessa. Before we go to individual questions, I'd like to address a few issues. As I mentioned earlier, there have been common themes and discussions with shareholders and in the questions submitted ahead of today's meeting. We've had a number of questions about remuneration, about the decisions we've made relating to our executive team as well as how we're rewarding our frontline employees who have been the face of the airline through this challenging period. Jacquie will speak to the specific components of executive pay when she presents the remuneration report later in the meeting. But I think it's appropriate for me to address some aspects upfront. As you'll have seen in the financial year '23 remuneration report, the Board made a number of decisions on executive pay to drive accountability for the customer and reputational issues that have arisen. Customer metrics account for 20% of our annual incentive program, known as the short-term incentive program or STIP. For FY '23 on time performance was the only customer metric that was achieved. In light of the cumulative customer issues, the Board made 3 decisions in relation to executives' annual incentives. First, the Board exercised its discretion to zero out the customer component of the scorecard for executive management. We then cut a further 20% step bonus for executive management, and we delayed payment of any of the remaining step until there is more certainty around the ACCC proceedings and ground handling compensation matter. As I said at last year's AGM, we wanted to recognize the incredible job that all our nonexecutive staff did to bring us through COVID. The people who serve you on board, who fly the aircraft, who help with the airport and work behind the scenes in the hangars and operational centers. While it's clear that our recovery fell short in terms of meeting our customer outcomes, I'm pleased to say that the achievement of our 3-year recovery plan meant we were able to reward our people for their incredible contribution. In fact, many of our employees are now shareholders in Qantas for the first time as a result of our reward and recognition program, which provided up to 1,000 Qantas shares to over 20,000 employees. Combined with the $5,000 recovery boost, which nearly 15,000 agreement covered employees have already received, that meant we delivered our largest nonexecutive bonus scheme in FY '23. Returning to profit meant we were able to improve the annual pay increases for our people delivering $120 million in wage increases in FY '23 as part of our $4 billion annual payroll. Qantas continues to have very strong employee value proposition, and that's reflected in the demand for our roles. Last financial year, we received over 170,000 applications for nearly 7,200 roles across the group with cabin crew a major driver of that. The investment we're making to renew our fleet to improve our customer products and services in areas like sustainability now that we're growing again is creating thousands of new jobs as well as exciting opportunities for promotion for our people. The second issue I'd like to address upfront relates to the recent high court decision outcome on our decision to outsource the last 10 ports of our network where we still did our own ground handling. This decision was made in November 2020 when borders were closed, lockdowns were in place and no covered vaccine existed. The likelihood of years long crisis led to Qantas -- led Qantas to restructure its business to improve its ability to survive and ultimately recover. Both the Federal and High Courts found that Qantas had legitimate and legal reasons to make this decision, but they were not satisfied. There weren't other motives that would constitute adverse action against the industrial rights of employees. As we've said from the beginning, we regret that we needed to make that decision. We deeply regret the personal impact it had on those affected. We're now working through a process with the federal court and the transport workers union to compensate the 1,700 employees who were retrenched. Vanessa is personally leading that process and we'll meet with the TWU this month. Our aim is to move as quickly as we can to resolve this issue fairly and bring closure for the former employees involved. On another legal matter, we've had questions regarding the recent ACCC allegations that we mislead customers in relation to canceled flights during the difficult return to flying post COVID in early 2022. We understand the concern these claims have generated from shareholders and from the community more broadly. Let me start by saying we take our obligations under consumer law very seriously. The challenges of the return to flying post-COVID for Qantas and for the industry as a whole are well known. While our safety performance was strong, we made many mistakes that impacted our people and our customers, and we apologize for that. We have recently lodged our defense in this case and issued a detailed statement to explain our position. I would encourage you to read that, but let me share a few key points. Fundamentally, staffing and supply chain issues in the first half of 2022 exacerbated by the impact of Omicron meant we just didn't have the resourcing we thought we would have to operate our schedule. We made large cuts to our flying to stabilize our operations, which resulted in thousands of canceled flights. We acknowledge there were some delays in communicating with our customers. This wasn't done for commercial gain, but to give us time to find alternative flights for our passengers, either on Qantas or other carriers. We'd much rather tell people that they're flight had been canceled at the same time as letting them know their alternative options. The result of these efforts is shown in the examples highlighted in the ACCC's media release on the commencement of proceedings against us. 100% of impacted domestic passengers were offered same-day flights departing prior to or within one hour after their scheduled departure time. 98% of impacted international passengers were offered reaccommodation options on flights within a day of their scheduled departure date. In most cases, customers were rebooked on these alternative flights weeks or months ahead of when they were actually due to travel, allowing them to plan. We have learned from this experience and cancel flights are currently immediately removed from sale manually while we work on an IT solution to automate this process. But that does not mean that Qantas practice during the return to flying post-COVID breached the law. This matter remains before the court, and we'll provide updates when we can. Another theme from submitted questions relates to the fall in the share price over the past few months. We've had a number of questions from shareholders asking what we're doing about the decline in shareholder value reflected in the lower share price. We acknowledge the substantial fall in our share price since July, albeit we've seen an uptick this week. But it is important to look at the global context and some of the factors that have been weighing on our stock. Globally, airline shares have fallen between 20% and 30% over the last 6 months as oil prices have risen to recent highs. And you can see that on the slide here. Acknowledging the importance of affordable travel in an environment where fares are already elevated, we made decisions to absorb most of the cost of the higher fuel prices in the first half, which is likely to total up to $250 million. However, with sustained high oil fuel prices and a weak Australian dollar last month, we increased fares by an average of 3.5% to recover some of these higher costs. We firmly believe in the fundamentals of this business as we outlined at our Investor Day earlier this year. This includes strong brands, deal brands in the domestic market that transform the international business with incremental earnings from Project Sunrise and an ambitious growth plan in our Qantas Loyalty business. The balance sheet is in a strong position. And at June 30, we had around $10 billion in liquidity. We continue to return funds to shareholders with our buyback now over 40% complete. We know we have work to do as we restore trust with customers and investors in progress through the resolution of the ACCC allegations and compensation for the ground handling outsourcing. But I'm very confident and the Board is confident that Vanessa and her new management team are focusing on delivering for all stakeholders, including our shareholders and the fundamentals of this business will be better reflected in due course in the share price. Now before I move to the formal business of the shareholder meeting, can I thank members of the media for being in attendance this morning and ask for filming and photography to cease at this point as we've traditionally done in previous AGMs. We'll just pause for a minute to allow the camera operators to leave the room. 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 22 September 2023 was circulated to members, and I'll take it 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 those queries at the time that resolution is being considered. If a shareholder has a specific customer-related issue, we have with us today dedicated customer care representatives from Qantas, Jetstar and Qantas Loyalty who will be available at the customer care desk in the foyer after the meeting. For any employee and ex-employee shareholder wishing to raise an employment-related issue, we have representatives from our remuneration and benefits team as well as our industrial relations and people teams available after the meeting to follow up on any specific questions. Those in the room who would like to ask questions are asked to move to one of the microphones located throughout the auditorium. And after providing your shareholder details to the attendant, please wait to be invited to ask your question. Only those with a handset and blue nonvoting card are allowed to ask questions. Shareholders who are attending online are able to ask questions via the online meeting platform by clicking the messaging icon on your screen. Selecting the relevant item of business, typing your question and pressing the arrow symbol to submit your question. You can also ask a question verbally by clicking on the request to speak button at the bottom of your broadcast window. You will then be prompted to confirm your name and enter the relevant item of business for your question. Submit your request and follow the instructions to allow access to your microphone and connect to the queue. Please pause the broadcast first as you'll be able to listen to the meeting on the audio line while you wait to ask your question. In order to allow as many shareholders as possible to participate, please keep your questions concise and to the limit of two questions per shareholder at a time. Questions that are relevant to the business of the meeting will be read allowed to me by a Qantas staff member, and we may amalgamate questions if there are multiple questions on the same topic. We'll save answering questions specific to the resolutions until the relevant time. However, those online are able to start submitting their questions now. At the time each resolution is considered, I'll invite questions specific to that resolution from the room and from online attendees to ensure that all shareholders are given a fair opportunity to ask questions. I'll now summarize the voting procedures. All items of business will be voted on by a poll, which I now declare open. If you did not cast your vote prior to the meeting and have not appointed a proxy to attend on your behalf, you may cast a direct vote using the online platform or via the handset you were given if you're here in the room with us today. 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. To cast your vote, simply select one of the options. Your vote is automatically recorded and there is no need to press the submit or enter button. For those in the room, please cast your vote for each resolution using the handset. Use the trackball to highlight the resolution you wish to vote on, press the green square to confirm. You can vote by pressing 1 to vote for, 2 to vote against or 3 to abstain. Press the green square move to the next resolution or the red triangle to go back. You can change your vote up until the time I declare voting closed. I confirm that where undirected proxies have been given to me as Chairman, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display the proxy votes received prior to the meeting on each resolution. The final results will be lodged with the ASX as soon as they are available following the conclusion of the meeting. If you experience any difficulties using the online platform, the help line 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 this meeting, which is to consider the reports contained in the 2023 Qantas annual report. 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 auditor, KPMG. As by -- as required by Section 317 of the Corporations Act, I now lay before this meeting the financial report, the director's report and the independent auditor's report for the financial year ended 30 June 2023. Shortly, 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 past year, the director's report or the auditor's report. We'll start with questions from those in the room and then we'll move to those attending online. Those attending online who wish to ask a question and have not submitted one, please do so now. Can those in the room who wish to ask a question, please move to one of the microphones. Can we turn the lights up in the room a little bit, please? Thank you. Microphone 1.

Chairman, may I please introduce Rachel Waterhouse.

Good morning. My name is Rachel Waterhouse, and I'm representing the Australian Shareholders Association which represents retail shareholders. This morning, I'm representing proxies in respect of 415,528 shares with a value of $2.1 million. Mr. Chairman, Vanessa spoke around the policies for flight credits and what has changed, and it was good to hear some of those responses. The question we've got is what is the total value of flight credits still on the balance sheet and have customer complaints reduced?

Have you got another one or just...

I've got a second question as well. .

Why don't you ask the second one as well. Thanks.

And the second question, Mr. Chairman, is, does the company have a figure for the likely level of compensation regarding the illegal stacking issue. And if not, has the company determined what it will reserve in respect of this matter on the balance sheet.

Yes. So thank you for both questions. And it's great to have the ASA represented here today, and thank you for the support of the shareholders you represent. On the first one, which related to COVID credits. We've now -- our balance is down to $520 million. We've returned about $1.5 billion of COVID credits. But I'm going to give Vanessa to take you through what we're doing now to -- and she touched it in her speech, but what we're doing now to that money back to shareholders or those shareholders who don't want to retain it as a credit. Sorry, customers, sorry I said shareholders, customers or some of them may be shareholders. And then we'll come back to your second question on the outsourcing. Vanessa?

The balance is coming down. So in August, it was $570 million. And as the Chair said, it's now $520 million. We are absolutely, as a leadership team, we are focused on making sure that all credits are either redeemed or refunded to customers. And that is actually going to be an ongoing effort. So we have a whole team that is focused on this, 100 dedicated agents in our call centers with a dedicated line that a customer can call and that is to improve the ease with which they can access those funds because we know and have recognized that it has been hard for customers over time to do that. The second thing is that we are going to be unrelenting with the way in which we contact customers, so we have started SMS in customers, and we found that, that is a method of communication that is easier for customers and has driven a lot of the uptick that we've seen recently. And the other part that is also important is that the credits or the refunds now are never going to expire for both Qantas and Jetstar. That is something that we know and in talking to customers we want to make sure that there's still urgency to get that refund back to customers. So we are working with our banks. One of the issues that we have had is that over 3 years ago, the credit cards that customers use to make those original bookings have now expired. So it's very difficult to automate the return of that because those funds get stuck in between Qantas and the customer. So our banking partners are helping us and we're figuring out a way of being able to do that much faster. And we're not going to stop until that balance is zero.

And on the issue relating to, I think it was the ground handling. As I said, Vanessa will be leading the process which the Federal Court has ordered in terms of Qantas and through the TWU, those employees in terms of working to get an outcome. It would be inappropriate to comment on any more than that in terms of what the outcome might be financially. We have made provisions, but again inappropriate to comment on what that provision may be.

I guess we're just assume it's a significant amount.

I think so. As I said, we want to move on from this as quickly as we can. And Vanessa, we've got the CEO leading the negotiations. And hopefully, we can move things forward very quickly. Microphone 3 then 2.

Chairman, may I please introduce Mr. Spiro Aquisos.

Good morning, Mr. Chairman. This morning, I've come as a friend and in peace. And as good friends, we've got to speak openly, candidly and honestly. I listened very closely to both your speech and Vanessa, your speech and everybody here today and online will be thankful of what you've said. It's also important to see the action follow through. We probably had 15 years to get things right, yet there's been a lot of problems in that 15 years. But I know no one's perfect. None of us are. But in the positions that you all are and the remuneration that you receive, you've got to do a much higher standard that's being delivered. Now I flew down from Queensland specifically to be at this meeting today. Now I mean, I heard Mr. Chairman, that you've addressed the financial review of ACCC and what's been said in relation to the flight scandal. Are you prepared to offer a humble and sincere apology to all of those customers affected? I think that that's an important thing to see from the Board, a sincere apology and to make things right for all of the shareholders want to see improved stock prices, but that will only happen by looking after -- truthfully, looking after your customer because without your customer, your planes will be sitting on the tarmacs and not creating revenue. I'm here as a friend, but we've got to speak openly. And forgive me, I didn't congratulate you on your position, Vanessa.

Mr. Aquisos, I don't want speeches, I want query. Can you please ask your question?

Are you prepared to give an honest sincere apology to your customers affected?

I think we've given a number of apologies, sincere, and I think I did again today for...

And you feel that that's adequate?

Well, what's actually more important is what you just -- what you outlined, which is the actions going forward, I think. And we've got a very sharp and unrelenting focus on time performance, on reducing cancellations, reducing baggage losses, the things that matter most to customers. Vanessa outlined the work we're also doing in terms of loyalty to give customers more opportunities to use their points. So I think what we should -- we are incredibly sorry and apologetic to our customers that we've let down and any other of our stakeholders, we've let down over the recent past. As I said earlier, the context is important, but that doesn't matter. We own it as a Board and management, but the real focus for us now is continue to improve. Hopefully, your flight down from Brisbane was okay or better than okay.

Well, Mr. Chairman. I'd love to say that I flew with Qantas, which I've been very proud of flying with Qantas for many, many years. But unfortunately, I didn't fly down with Qantas today. So I apologize for that. And Qantas did a great job. So thanks for that. My second point that I'd like to ask is customer service is premium. And if we see historically, Geoff Dixon, James Strong, they focused on customer service like nobody else. They fix problems very quickly. They didn't dillydally around, and you have to make hundreds of phone calls like you do now to fix a problem. They were amazing. As the Chairmans were Margaret Johnson and Mr. Pemberton, they were amazing. I would encourage you to take a leaf here and a note out of their books on how they operate it so that we move forward to grow Qantas, we work together customers, shareholders and Board so that we can actually move forward in a strong way, standardizing the fleets, fuel, et cetera. But customer service is where it's at because it's word of mouth that's going to create the biggest transparent movement forward so that your -- the stock grows in price. The more positive words from your customers, the greater outcome and the greatest -- greater share price increase that you will notice. Thank you, Mr. Chairman.

Thanks, Mr. Aquisos. I will get Vanessa to respond on the customer service because it's -- and I think she's referred to this. It's not just the experience, experience when inevitably things happen. They do in airlines, as you know. So I just want Vanessa to talk about the focus that she and the team are putting around that at the moment as well. And the investment we've made in customer.

Thank you for those comments. And the one thing that I could say to you and everyone are here today is that our focus on customer is my and my leadership team's #1 focus. We talk about it all the time. And a number of things we are focused on. First of all, we will never become complacent or feel entitled to customers. We have to win customers and we know it, I know it on every flight in every interaction that our people have with the customers, whether it's on a flight or whether it's in a call center or whether it's in between that through our loyalty. So number one is that on-time performance, reliability is going to be a key part of what we do and that we deliver on that promise, whether it be on a Jetstar flight or on a Qantas flight. But more importantly, actually, we are focused and we are lifting our game to recover better when things don't go to plan. Because what we do know, we will never compromise safety, and we'll never put that before schedule.

That's wonderful, not compromising on safety.

Absolutely. So it's always going to be. And so there will be things and times where things don't go to plan. But recovering and empowering our people in the moment on the spot and empower them to recover for the customer and generously do that is another part of what we're doing. Also the pain points that we know -- and the other thing that we are doing is that we are bringing the voice of the customer through our people, but also from customers. And we will never stop improving the continuous cycle of driving better customer service, it never stops.

How do you think that that's going to happen because many have rang and have gone through so much trouble even to resolve a small issue. And we want to work together. Definitely, we want to work together, but it has to happen from your side and retraining of your staff because some of the staff are absolutely wonderful. But some have got some adjusting to do really.

So I think that the one thing that we are going to do is focus on training as well, but also getting that voice of customer through. Where things don't go to plan, we need to listen, number one, and we are a team that are going to be doing more listening. But secondly, we're going to be acting really quickly to fix the problems. And then finally, it's on reward and recognizing loyalty, and that is where our loyalty program and focusing on making sure that where customers are earning with us, they have the ability and the reward for being able to seek redemptions as well. So we are absolutely focused on that, but thank you for those words.

Thank you, Vanessa, for your response, and thank you, Mr. Chairman.

Thanks, Mr. Aquisos. Microphone 2, and then we'll go online for some questions and come back to the room.

Chairman, may I please introduce Mr. Max Worthy. .

Mr. Chairman, Chris Max Worthy, I'm a shareholder, but I'm also a member of the Australian Shareholders' Association. Rachel would be the polite voice here in giving feedback. I'll be a little bit more abrupt. I have concerns about the ethics, the ethics of the Board in relation to the leadership of the company. I've heard you say that you apologize, I've heard that several times. But I think you've avoided the elephant in the room on several occasions. So if I look at an ethical point of view, with the TWU and the 2 sets of the federal court and the appeal to the High Court, to me, it's an ethical issue. Okay. You may have justified at the time on a commercial basis. And we are paying for your lack of ethics now or we will be shortly once negotiations are completed. But sir, Chairman, I have a question for you. I understand that the former CEO sold a significant proportion of his Qantas shares. Is that correct? Perhaps 90%?

At the time was a significant proportion of the share.

Okay. And am I also led to believe that it was the day prior to the ACCC making an announcement about the false flights or the mystery flights.

No, that's incorrect. So let me deal with those two issues, if I can, Mr. Max Worthy? Is that all right?

Yes.

On the first one, the reason that we, Qantas has appealed the Federal Court Justice Lee's decision in the Federal Court on the outsourcing packages, we would never, as a Board or executive -- and goes to your question on ethics, would never ever do anything that we felt was illegal. And so we felt it was the right thing to do to...

I'm talking ethics, not legality.

Yes. I'm talking both. So that's why -- and I -- one thing that I'll stick up for me and the Board is the ethics of the people sitting up with me. I've got absolutely zero concern about the ethics of the people who sit alongside me in the Qantas board. Your question about Mr. Joyce's share sale is wrong. He sold shares in June. It was already announced that he would departing the company in November at the time. We had done a market briefing day two days before. We complied with our continuous disclosure obligations. That was in June, the ACCC action commenced on the 31st of August. And that was the time when we were advised by the ACCC that they were conducting that action.

Okay. I'll give you the benefit of the doubt. But I work in Canberra, and I know the nature of how discussions prior to public announcements works. So it would not surprise me to find that somebody with a bit of an insight into where things were heading may see an opportunity having pumped the share price to...

I'd be very careful because you're implying an illegal act and there was nothing illegal...

Unethical actually.

You're implying either or, and I'm not going to let that stand in this room. Thank you. I'm going to move online. Can we close down microphone 2, please? Online questions.

Chairman, we've had a number of other questions from the Australian Shareholders' Association that have come in online about Qantas' support for the indigenous voice to parliament, including the cost involved, who approved the support and the rationale for supporting the voice campaign given polls didn't indicate overwhelming support from the public.

So it's an important question, and it's been a question asked of a number of corporates. The first thing is Qantas supported this campaign and always -- and has supported constitutional recognition since 2014. And we did it again in 2019, and we also supported the Uluru Statement from the Heart. The management recommendations and endorsed by the Board to support the voice campaign, the contribution we made was in kind and equaled about $370,000. We knew at the time that it would be -- there would be a diverse set of views, but we felt it was important that we continue to support what we had done for a long period of time in terms of aboriginal reconciliation. Any other questions online? James?

Chair, our next question from online comes from Stephen Mayne who asked whether any new chair recruited from outside of the existing directors will carry the restrictions that they must agree to support the ongoing tenure of the new CEO, Vanessa Hudson, in order to receive the support of the existing directors? In other words, will a high-profile external appointee be given a genuine clean canvas to work with? Or will there be conditions?

So thanks, Mr. Mayne for the question. I can't imagine any incoming director who subsequently would be appointed Chair being compromised on anything other than them being able to come in and take a fresh look at things. I'd be very surprised, though, if an incoming chair made a change for the CEO because we think that Vanessa is going to be an outstanding CEO. Any more online, James?

Chairman, there are no further questions online.

Microphone 1.

Chairman may please introduce Mr. Michael Ritchie.

I guess my question and comment for Vanessa -- and first of all, congratulations on your appointment, and I wish you well moving forward. As you've acknowledged, you have a lot of work to do as someone who qualified as platinum last year on domestic leagues alone, I'm pleased to say that your frontline staff at the airports overall do very well. Your contact centers leave a lot to be desired until 18 months ago, I've been a team leader in the financial services contact center for 6 years. I understand from commercial practice that things do go wrong from time to time, it's no one's fault, it's just life. But the issue from a service point of view is that when things do go wrong and where you find out how good an organization is, how adroitly and adeptly and quickly they respond. I sent a letter of complaint to you on the 21st of September, which arrived at Mascot post office on the 28. It took two weeks to be picked up. I've since had a phone call from someone in your executive relations team who said she was going to call back. I then got a follow-up phone call about 10 days after I was promised a call back from the executive relations team frequent fly center, and she had no idea what my complaint was about really or complaints. And secondly, we organized a call back and that was two weeks ago, nothing's happened. So I think in terms of engaging with your staff, you need to look at your complaints team as an issue of absolute priority.

First of all, I'm very sorry that you've had that experience because it is not up to our standard that, that level of delay in responding to a complaint. So we've got people here today to follow up specifically on the complaint, but I will address our contact centers more generally for those in the room to address the feedback that you've had. There has been challenges that we've had in our contact centers. We have had very poor in the last 12 months called wait times and also response times because our call centers have been overwhelmed with volume. But what I can say is we are absolutely focused on that, and we have done a number of things, and we are going to be doing more things. So first and foremost, we are investing in more people, more resources to make sure that we've got more people on the phones to be able to respond, not just to calls that come in, but also to respond to complaints when we have that. Secondly, we are also investing right now in training those staff because it's not just about the speed with which you answer a call. It's about the quality of the response that's given in terms of addressing the complaint or fixing or helping fix the problem. I have also said publicly that within the coming months, we are reviewing whether or not we should bring our call centers and that resources -- and important resources back onshore. That is something that we think is an important part of us challenging model that we've had in place before. We've invested as well in systems. We've now rolled out a customer relationship management system that it is in the hands of those call centers so that when you call, if you are a platinum frequent flyer, we know who you are, and we know the experience that you've also had so we can better serve you going forward. So there is a lot that we've done, but there is a lot more that we are going to do to lift our performance in call centers, particularly. So thank you for your question.

Thank you. I look forward to seeing the improvements.

And we'll follow up...

We will follow up with you specifically.

Microphone 2.

Chairman, may I please introduce Mr. Harper.

Sorry, I missed your name.

Mr. Harper, Greg Harper.

I'm sorry.

That's all right. Thank you. First of all, I'd just like to make a comment and then a question. Earlier before you said Mr. Goyder, that aircraft don't have review mirrors, I'd just like to correct that because all fighter aircraft, in fact, do have rearview mirrors. And might I encourage you that in a competitive environment, it pays to keep one eye behind you for any enemy that may be approaching. Put it in more philosophical way, those who fail to learn the lessons from history are doomed to repeat them. So is your -- the Board there who represents the collective -- your collective business, wisdom and knowledge, that's your job, to be the basis of the company so we don't repeat our mistakes. Now the question. Recently, I flew from Melbourne to Los Angeles economy class, I'm not going to go into the details. It's not relevant. What is relevant. It was pretty chaotic and a lot of problems. But it made me think about -- because at the time, Ms. Hudson has just taken over the CEOship, and I thought to myself, you and the Board, you're all very -- you all have very generous staff travel privileges. I'd like a show of hands from the Board here now that we have you in front of us, how many of you have taken an economy class international trip in the last 12 months as an indication of how interested you are in the core part of the business? Thank you, Mr. Tyler. It's -- I mean, again, I don't want to get into the way. In my head, the whole time I was going through this. I was thinking about writing a letter to Ms. Hudson. But I think it would behoove you all to put yourself in the shoes of our rank-and-file customer base and to see don't get privileges and fast check-throughs and all that kind of stuff, we get it. You're very important people. Put yourself in the shoes of the average Joe and see what kind of experience they're having. Thank you.

Thanks, Mr. Harper. One thing I will say is that I think you'll find Vanessa and the team are doing a lot of that right now, Vanessa flew -- I won't go into great detail of it. Your point is well made. Thank you. I'll go to microphone 3, then go back online to James, I think. Microphone 3?

Chairman, may I please introduce Mr. Spiro Aquisos.

Thank you again, Mr. Chairman. Firstly, I'd also like to congratulate Mr. Doug Parker. I think you have an amazing skill set to have been brought on to Qantas with so many areas in aviation and CEO and Chairman of so many different companies. I think Mr. Parker will bring so much diversity, experience and wisdom to help you with refining, your aircraft, your fleet and operations. So thank you, Mr. Parker. Another point I'd like to bring to your attention, Mr. Chairman, and if you would indulge me. I have a number of colleagues who have flown with Qantas for many, many years, very wealthy individuals due to the fact that they had millions of frequent flyer points and they were canceled on them, they decided never to fly with Qantas ever again. Now as an ambassador, I'd like to call myself of Qantas, I've tried my best to negotiate and cajole them to come back with no avail. Previous to Ms. Olivia Worth's appointment in the loyalty program, I had tried to make contact with the former Director and also staff both flying to Tullamarine, Mascot, Brisbane and many, many phone calls to the rewards team, the loyalty team of frequent flyers, but with very, very little help not only for myself, but also for my colleagues. One of the points that I'd like to address and encourage, would you consider reinstating frequent flyer points to all the previous customers that have lost them? That would be a start to getting your customers that you've lost in the thousands and tens of thousands back to Qantas. And they will spend money in the future.

So can I get Vanessa to just talk a bit about what we do in terms of cancellation of points, how people -- what we did through COVID and how people can retain their current frequent flyer balance. Vanessa?

Yes, absolutely. And thank you for sharing that example. Qantas Frequent Flyer actually has one of the most generous programs in being able to retain points. To be able to do that in an 18-month period, you only need to spend $1 or earn 1 point in an 18-month period to retain your points. So it is a key part of our program, and I think it is what makes us very competitive. We do as well have a program where the customer calls us for some reason as well that is resulting in them in not being able to do that. We do apply discretion absolutely and consider the relationship and the value that, that customer brings to the group. So it sounds like the example that you were using though is a number of years ago because Olivia has been a key part. You said it was before Olivia's time. That's now over 4, 5 years ago.

Vanessa, that is correct, but the attempts to contact the office, speak to staff, I have to say, has been less than successful. And the people -- the numbers of people that I know that are really disappointed with the frequent flyer program. Here is an example. If there is a genuine care from the Board and from your directors of loyalty, and they can see, hang on, we've got customers that have got 500,000, million points. What's one phone call in 5 minutes or 2 minutes worth from your side to encourage? It's a part of marketing. And those people will spend money on other flights. And I think that, that -- if there's so many thousands of people that are in that case, well, you'll have to employ more staff to get the job done.

Well, thank you for your comments. I really appreciate. I think one of the things that the team did in loyalty incredibly well during COVID was that we did status extension. We did point extension right through COVID because we also knew that it was going to be a very difficult time to maintain. It's very difficult to be able to answer specifically the question without an example, but I want you to know that we're listening, I've heard you and the investment that we're making now going forward in our call centers, in the training of our staff is all going to be through the lens of customer value and making sure that we retain customers going forward.

I hear you, and thank you so much for that. But my point that I'm making that in that time, the amount of phone calls to try and resolve frequent flyers, there was no resolution. There was very little customer service support. And yes, I'm aware of Olivia Worth's position when she came on board in 2019, 2018. But at the time, the amount of effort that went in to try and fix the problems, there was no fix. There was no customer service. So yes, time has elapsed. But if I could encourage you, would you reinstate these people's frequent flyer points as being loyal customers previously and getting them back to Qantas?

Well, if you can provide us those examples, well, absolutely, you can have my commitment that we' look into that.

I will do that. I will be the marketing officer. I will help a long way.

We're going to go James online Thanks, Mr. Aquisos.

Chairman, we've had a number of questions online about dividends. So we'll take a question from shareholders, Margaret and Edward Kinsella, which covers the core themes raised. Why has there been no dividend payable to shareholders in the past financial year?

So thanks to the Kinsellas and all shareholders who have asked that question. Sadly, or unfortunately, through the 3 years of the pandemic Qantas accumulated losses of around $7 billion. And that means we're not in a taxpaying position, which -- and by not paying tax, you don't generate credits so that you can frank dividends when they're paid. And paying unfranked dividend is a very inefficient way of returning excess capital to shareholders. We are very focused on our shareholders as one of our key stakeholders. We're also very focused on our financial framework to ensure that anything we do in terms of dividends or other capital management processes meet the capital framework that we currently have. The most efficient way of benefiting shareholders at the moment is doing what we're doing, which is buying shares on market. And we're dealing with an issue relating to that at the AGM today, but we're about 40% through the current buyback. And that reduces the number of shares on issue, which is value enhancing for shareholders. We anticipate we'll be back in a taxpaying position probably, Vanessa, FY '25. And at that point, that will be a time when we can rethink -- hopefully think again about paying franked dividends. We know shareholders value them highly. James?

Chair, we have a question from Peter Hawkins, who is online. Peter says, as a shareholder with a disability, it's tragic that Qantas has been in the news recently for discriminating against a person like me. While it has not received as much publicity yet, Qantas also discriminated against me as a Qantas Gold traveler. What is Qantas doing to improve training of staff to reverse the culture of discrimination against disabled passengers?

So thanks, Mr. Hawkins. Can I get you to supply us with some information on what happened? We'll follow your specifics up. And I'll get Vanessa just to talk a bit about how we're dealing with people who have got disabilities.

Thank you for that question. And we do absolutely take our obligation as a service provider, particularly for people with disabilities to provide a seamless experience as possible. The one thing that we are doing is that we're doing a lot more training for our teams. And we know that we have not always got that right, particularly making sure that the broad training speaks to awareness, speaks to understanding, but also speaks to specific training around how we handle equipment, particularly wheelchairs. So it is absolutely a focus for us. We've also established a team of staff within Qantas who have formed a committee around improving and identifying how we improve that experience in the airport on our aircraft, but also for our people that are working with us with disabilities how we improve their experience in the workplace as well. So it is absolutely something that we are committed to, that we are putting resources behind both in terms of capital but also our people power as well. So thank you for that question. And as the Chair said, if you could provide specifics, we'll absolutely follow that up in your specific circumstance.

James, any more?

Chair, our next question comes from Henry Kay, who asked whether you're considering setting up a customer advisory committee to work with the company?

Vanessa?

How was that?

Customer Advisory Committee?

There is absolutely a focus that we have in our customer team, as I was mentioning before, to bring a voice of customer into everything that we do. That is going to be absolutely customers that are both loyal customers, but also customers that travel on other airlines. We're going to do that with the entire leadership team every week. We'll meet face-to-face with those customers that have had both positive and also have had poor experiences because it is only the way that we are going to continuously improve that we listen, that we also hear what the issues are and that we act fast to resolve them. That is not just going to be something that we are doing in the short term. That is going to be something that we do on an ongoing basis and becomes an integral way in which we work.

We might get microphone 3.

Chairman, may I please introduce Debbie Allcott.

Thank you very much for the opportunity to ask a question. I've come from the Pilbara. I'm Deputy Chair of SAFE, Saving Animals from Euthanasia. And my reason for asking a question is to see whether or not I can convince the Board to reconsider and maybe with some consultation, the extreme heat policy the freighting of animals, any animals, companion animals, wildlife, that you've now invoked. The policy which I know is along the lines of IPAT and IATA guidelines, however, also understanding that airlines have flexibility on to what degree they invoke it. But a blanket policy that has now come into play all of a sudden when it hasn't been voted previously, where no animal can be freighted by Qantas if the temperature of the day is scheduled to be 35 degrees and over or less than 5 degrees Celsius has really caused great heartache and havoc, particularly in our northern regional branches. SAFE, Saving Animals From Euthanasia are the WA representative on the Board of CANA, Companion Animal Network Australia. I know that you've had a few deaths of animals. But we, as an organization in animal rescue and rehoming potentially will lose thousands. We have pounds that have written into Qantas that are full with the local council. We -- since COVID, we all know, I think we've all read over the last couple of years, there's been an explosion of animals homeless animals or relinquished animals due to COVID. Animal rescue services cannot cope any longer. And I just implore Qantas to perhaps relook at and take on board even some of the RSPCA suggestions of their letter of the 20th of October, one of which was, let's say, then a flight would need to be booked to say, 3 hours prior to the time of the expected 35 degrees and over schedule. Also maybe on the tarmac, there could be air-conditioned trolleys for animals, but it's seriously making it very difficult even for regional families. We had a situation where a regional family was on the flight from Karratha to Perth, 2 adults and 3 children, only to find that their dog wasn't loaded because later in the day, it was going to be 35 and over. So they got to Perth and of course, their animal is left in Karratha, where does it go? What happens to it. So if maybe the Board could look -- relook at some flexibility so that this blanket policy that's going to affect not only animal rescue and rehoming services, but also the public.

Thanks, Ms. Allcott. And thanks for making the trip to Melbourne for the Qantas AGM and representing your group. The information I've got and Vanessa might have more is that our policies are work with animal welfare groups, but the issues you raised are something we'll follow up with you. I think Andrew McGinnis who's here will follow up with you during or after the meeting to get some details and Vanessa, you're happy with that, and we will see what we can do and see what we can do to help.

That would be amazing. If there was something -- some reasonableness in this where we can work together, we'd be so appreciative. Thank you.

Thank you. Microphone 4.

Chairman, may I introduce Mr. Bruce Fitzpatrick.

Thank you for the opportunity. Last year, my family and I flew to South America, business class return. Unfortunately, I don't think our experience was any better than Mr. Harbors. I left the flight feeling that the rock from the top had reached the tail. The service standards on board were nowhere near what I'd experienced in previous flights. My experience over the past 10 years had been despite what was going on at the higher level within the company at the face ground level, the staff tried their best and did their best. What I experienced on that last flight, even at the -- towards the front of the plane was generally a lack of care, a lack of understanding and a lack of acknowledgment that we're actually even there. So given that we can hear what you say here now, what are you actually doing about dealing with these matters at the call phase because it takes a long time to filter through and it's a lot to be reversed now.

So thanks, Mr. Fitzpatrick. I'll get Vanessa to talk to it again. And apologies for the experience you had.

Yes, I would like to first start by recognizing that the experience that you had is absolutely not what we aspire to. And I'm very sorry that you had that experience. What we are doing is a number of things. So we are investing in our food. A significant part of the investment that we are making is uplifting our international meal product, both in economy but also in business class. Not knowing when you traveled, I'm hoping that the improvements that we are doing is now on board the aircraft. The second thing that we're spending a lot of time doing is working with our crew. And a key part of that is going to be service training, and that is going to be coming over the months ahead, not years ahead. It is absolutely a key part of what we're doing, which is performance management as well in being able to take feedback from customers and listen and feed that back to our crew. And that will be a key part as well of how we constantly challenge ourselves to lift the way in which we deliver our service experience. We've got new aircraft coming as well, and that is going to be a key part of our international product with 350s, replacing 330s and 787s, ultimately replacing A380s. And then with the long haul -- super long-haul aircraft that we've got with Project Sunrise, all of those aircraft will have new hard product, Wi-Fi as well for customers but a new experience. So we are determined to make sure that going forward, we do a better job than the one you had on that flight.

Can I just ask one more question of Mr. Goyder regarding the comment you made earlier. Are you suggesting that Qantas has no carried forward franking credits accrued from previous years.

And not at the moment, no, we don't. Yes, that's correct. Thanks Mr. Fitzpatrick. I'm going to go online, James. I think there's a few questions, you've got.

Chair, we've had a couple of similar questions about regional airfares. Holly Hawks asked whether Qantas has any immediate and long-term plans to reduce airfares throughout rural Australia and Hillary Brook asks specifically while Qantas Link regional flights on the Tamworth to Sydney route don't get any discounted fares.

Again, I'll get Vanessa to talk a bit about regional fares and the arrangements that are in place. We understand it's a very important matter, particularly for our customers in those regional towns. But Vanessa, can you.

We're very, very focused on understanding and recognizing that affordable travel is very important in regional communities but also right across our network. We focus a lot on making sure, particularly regional airfares are as affordable as possible. It's important to say, though, that the cost of serving regional communities is a lot higher than our main trunk routes. That's mainly because the smaller aircraft still consume a large amount of fuel but have a smaller amount of seats. But we are incredibly proud of the role that the Qantas Group, particularly Qantas does in terms of serving regional Australia. A key part of that as well is that we do offer 15 regional communities with all ways on discounted, a 20% discount to the prevailing fares in the market. And that's been specific investment that we've made in regional communities to provide accessible air travel into major city hubs. On your specific question on Sydney Tamworth. I might have to take that on notice, and we've got your details and we'll follow up with a specific answer to that question.

Thank you. James?

Chair. We have another question online from Harry Brook, who asks, due to the ongoing scrutiny surrounding the big 4 accounting firms, including KPMG, does the Board have full confidence in their current auditors, KPMG.

So thanks, Ms. Brook. We certainly have confidence in KPMG doing a very good job as our external auditors. But we will, as a matter, of course, and I think we've announced it is Belinda. We've announced that we will be in 2025, '26 looking to review -- to attend for external audit. James?

Chair, our next question comes from [ Gypsy ] Securities, who asks whether you consider the awarding of Chairman's Club membership to the Prime Minister's son as corrupt conduct? And if not, on what basis was this membership awarded giving he is simply a student?

So thanks for the question, but we're not going to go into any matters around Chairman's lounge membership. James?

Chairman, shareholder, Alan Davis asks what are the Board's plans to better recognize the value of its employees, given they can be the company's biggest asset in repairing our customer relationships?

Thanks, Mr. Davis. Well, we'd agree that our employees and are and have been incredibly important. And in most cases, really put our customers first and we know we've disappointed from customers for particularly over the last few years, but our employees generally are fantastic. But Vanessa, do you want to talk about how we're looking at rewarding sort of where we are at the moment in terms of EBAs that we've closed off and things like that.

So first and foremost, we regularly provide a reward and recognition bonuses and have done that particularly many times over the years. And this year, we have provided our employees the largest bonus scheme that we've ever had. That's included a 5,000 boost payment, but also most recently, the award of 1,000 shares each. That's the equivalent value of around $11,000 to $12,000 per employee. That's been an important part of recognizing not just the contribution our employees have made in the last 12 months, but the incredible role that our people played in supporting the organization manage its way through COVID because it was not easy. We've been very public around how challenging the recovery was for us, but none more so than to our people that were out on the front line with our customers and supporting them through what was a very challenging time. The second part of that is as well working with all our unions and employees to strike good outcomes for both the company but also our employees through EBAs. We've now closed a large majority of our 55 EBAs with only 13 more still underway. And that actually, I think, recognizes the positive relationships that we can strike to get EBAs closed, but also recognizes that the group is actually one of the highest paid aviation workers in Australia, and we're very proud of that, and we will continue going forward to make sure that we strike the right balance in rewarding our people through EAs, but also recognizing them through bonuses, but also recognizing them by being present in the workplace by being visible, by saying thank you and also valuing and respecting the work that they do every day is going to be a key part of my leadership and my leadership team's approach to managing our amazing people.

James?

Chair, we have another question from Stephen Mayne, who asks how did the 5 main proxy advisers advise their clients to vote today? And what influence did that have on the size of the protest votes? Also, why not disclose the proxy position to the ASX with the formal addresses to offer more timely disclosure to the market.

So thanks, Mr. Mayne. The proxy advisers have actually different recommendations on different aspects of the meeting today in terms of election of directors, reelection of directors remuneration report, even the long-term incentive plan for the CEO. So I'm not going to go through all the different recommendations. I think all the reports are public, Andrew Finch?

They advise their clients, they get how to vote but the -- and those recommendations are generally well socialized in the public domain.

And I don't know that it's their reports to their clients. It's not a Qantas report. So I don't think it's appropriate that we disclose as such.

Agree and the notice of meeting, of course, sets out the directors' recommendations on each of the resolutions.

And what was the other part of Mr. Mayne's question. Was that it? James?

The second part was why not disclose the proxy position to the ASX or the...

I think we've done with that. Thank you.

Our next question comes from Colin Rendall in relation to Qantas' Melbourne Airport terminal. He says the lack of any water stations in the arrivals and baggage claim area and the filthy state of floor tiles throughout the entire terminal are an indication of poor maintenance and presentation of one of the country's key airports. Are there any plans to renovate the domestic terminal at Melbourne Airport?

I think it's a good opportunity to talk about how Melbourne, how important Melbourne is and Victoria is to Qantas network. Melbourne Airport has obviously operated quite separately to Qantas and where a tenant of theirs at Melbourne Airport. But Vanessa, do you want to talk a bit about some upgrades under hopefully are underway there and also how important Vanessa, how important Melbourne is to Qantas.

Thank you for those comments and trust me. I will be going back to Melbourne Airport and focusing on making sure that we have the standards in our terminal that represent our brand and most importantly, the cleanliness standards that we would expect. So thank you for that comment. But as the Chair said, Melbourne is an incredibly important part of our network, but also of our businesses as well. We have announced a number of new routes out of Melbourne that are doing incredibly well, including Dallas, Delhi and also Takata with Qantas. But also our Jetstar head office is based in Melbourne and has been since its inception. So an incredibly important part of us. Melbourne is also going to be one of the bases for our new Engineering Academy in addition to Brisbane. And we also have a number of simulators here in Melbourne. And as we bring on our new aircraft, particularly the Qantas narrowbody aircraft, Jetstar, NEO aircraft, but also Project Sunrise and the new aircraft that are coming for Qantas International. These aircraft have a capability now that is unmatched by the aircraft that they are replacing. So we and you should expect to see many more routes out of not just Melbourne but right across our network as well.

All right. I think I'm now going to move on to the next item of ordinary business. Which is the second item of formal business for the meeting is the election and reelection of directors. Those offering themselves for today, Election today meeting. Vanessa Hudson, Doug Parker and Dr. Heather Smith. Pursuant to the Qantas constituting the ASX listing rules it's necessary for each nonexecutive director to seek reelection by shareholders at least every 3 years. Those directors offer themselves to reelection this time, Belinda Hutchinson and Todd Sampson. The notice of meeting in the 2023 annual report contain details of the background experience of those up for election or reelection, and we'll also shortly hear from each of them in turn. The Board and Nominations Committee regularly review board composition to ensure that we have the right mix of skills and experience amongst our directors. And as announced in October, the Board will be going through a period of measured and orderly succession over the next 12 months to support the important work underway by Vanessa and her new management team. The Board believes the directors up for election of today's meeting provide an appropriate balance of renewal and continuity. I would like to thank each of my fellow board members again for their contribution to the deliberations of the board over the past year. The first election is that of Vanessa Hudson, as Executive Director being Item 2A of the Notice of Meeting. Vanessa was appointed by the directors, the Executive Director on the 5th of May 2023. She succeeded Alan Joyce, as Qantas Group Chief Executive Officer and Managing Director on the 6th of September 2023 following his retirement on the 5th of September 2023. She is a member of the Safety, Health, Environment and Security Community, Board, as I stated earlier, believes that Vanessa has a deep understanding of the group operations after almost 3 decades in a range of roles, both onshore and offshore across commercial customer and finance. The Board also believes that Vanessa is an outstanding leader, who brings significant amount of airline experience to the role and considers her to be the best person to take Qantas forward and lead the management team in what is, as we've already discussed, a very challenging environment. So I'd now like Vanessa to say a few words.

Thank you, Richard. Stepping into the role of Group CEO and Managing Director is an incredible privilege and I recognize a huge responsibility. As the Chair said, I've been with the group for 29 years. I am passionate about this company, as I know, are our 25,000 people who also work for the group. And we're passionate about honoring our history, the brands that we have built about ensuring that we create a strong, sustainable business that continues to evolve, but also that continues to grow. And one that continues to deliver for you, for our people, but also our customers. My commitment, as I stepped into the CEO role back in May was that we would earn back your trust that we would strike the right balance, but also be judged not by what we say, but what we do and how we behave. We have started. It will take time but we're on the way. We're investing in our customer experience. We are listening to our people. We are giving them a seat and a voice at the table, and we are focused on rebuilding trust and shareholder value. As I said earlier, I'm determined to make sure that we restore the reputation of the group to where it was as one of the leading and most trusted brands in Australia. So thank you for your support.

Thanks, Vanessa. So I now formally propose the following ordinary resolution that Vanessa Hudson, an Executive Director, appointed by the directors on the 5th of May 2023 pursuant to clause 6.5A of the Qantas Constitution and retiring in accordance with the constitution and ASX listing rules being eligible, is elected an Executive Director of Qantas Airways Limited. The directors with Ms. Hudson abstaining, unanimously support her election and recommend that you vote in favor of this resolution. I'll now take questions on Vanessa's election starting. I think there's one online, James.

We have a question from Stephen Mayne, who asks why is Vanessa Hudson being put up for election to the Board when CEOs are exempt from election. This election of a public company CEO is very rare, given we have voluntarily put Vanessa up for election this year, why not go further up and follow best practice that occurs both in the U.S. and U.K. and with some of the companies in Australia by moving to annual elections of all directors at the 2024 AGM.

So I guess, Stephen, can I thank you for your question. And you've raised an important point, which I admitted in my preface, if you like. Vanessa is required to go up for election as the Qantas Constitution requires it upon her initial appointment, but it's not required after that. So it's the only time while she's CEO, she will be up for election. So Qantas is different to most ASX-listed companies. In relation to your question about annual election of all directors, I think that's, frankly, that will be a matter for a whole lot of Australian boards to consider in the years ahead, I think, and probably for this board to consider. We are, as I mentioned earlier, looking at reviewing governance matters that have come up for the last 12 months. And one of the things that we will look at in the Board, no doubt going forward will look at is what is the best way of dealing with election of directors, some of the resource companies like BHP do annual election of directors, most Australian companies don't, but it will be something that we'll look at in the future. So thanks for the question. James?

Chair, we have an online question from Philip Wilks, who asks the outgoing CEO has been largely responsible for the current issues with customer and employee engagement. The loyalty chief was the spokesperson during the highly divisive lockout of employees, the outgoing CEO and loyalty chief have been lauded publicly by the Board and incoming CEO. How are shareholders and employees to be reassured that there is trillion intent on resetting the customer and employee relationships?

So thanks for the question. I think we've heard a lot from Vanessa today in terms of what that commitment is in terms of the customers. So I think we'll leave that at that. I think we've heard a lot from that. Microphone 1? And may I please introduce Ms. Rachel Waterhouse.

I just want to also be clear that I'm the spokesperson for Australian Shareholders' Association today, representing the views and that there may be other views in the room or online that come from retail shareholders that we always encourage now onto this. Mr. Chairman, we are voting against the resolution on the basis that a CEO is not required to also be a managing director and that Ms. Hudson has served for a considerable time quite closely to the previous M.D. We would prefer to have this resolution resubmitted to shareholders in a year's time when Ms. Hudson has had time to prove that the management decisions of the past will not be repeated for the future. Could you or Ms. Hudson explain to shareholders why and how they can expect the management of staff to change at Qantas in the coming months.

So thanks, Ms. Waterhouse for the questions. And I think as I said just said then, I think you've heard at length from Vanessa on the initiatives she's putting in place. In response to the first part of your question, the Board, I and the Board think it's very important that the Chief Executive is on the Board that is Managing Director. There are liabilities and responsibilities that go with being a public company director, and I think it's appropriate that the Chief Executive Officer has those responsibilities as well as the nonexecutive directors. So we think it's -- and certainly the case in most ASX listed companies in Australia that the CEO is on the Board. So we think that's the appropriate thing. And there's no doubt that the Board and shareholders will judge -- shareholders will judge the Board in Vanessa's performance in the months and years ahead. And shareholders have an opportunity this time next year as well to see how we're going. As I said earlier, I think the Board has immense confidence in Vanessa's.

We wish Vanessa all the best for the next year.

I appreciate that. Thank you. James, anything else?

Chair, there were no more questions online on this item.

Okay. I'll turn now to the details of the proxy votes received prior to the meeting on this. On the screen are details of the proxy votes received in respect of Vanessa's election. For those voting today, please cast your vote now if you haven't already done so, but it looks from those votes that have very strong support. So congratulations Vanessa. The second election is that of Doug Parker being Item 2b of the Notice of Meeting. Doug was appointed by the Directors as a Non-Executive Director on the 23rd of May 2023. He is a member of both the Safety Health Environment Securities Committee and the Remuneration Committee. The Board believes that Doug's extensive aviation industry experienced together with its commercial and management experience enables him to make a significant contribution to the deliberations of those committees and to the Board generally, and I'd now invite Doug to say a few words.

Thank you, Richard, and good afternoon. I was honored to be appointed to the Qantas Board in May of this year. I've been in the global aviation industry for 37 years, including more than 20 years as a CEO. And 8 of those is the CEO of American Airlines, which is the world's largest airline. So with the benefit of that global perspective, I can tell you that Qantas has always been one of the most well regarded and respected airlines throughout the world. From its absolute commitment to safety, to its reputation for exceptional customer service and the unique Aussie spirit that the airline and its people employ. So I also know the Qantas Group and the management team extremely well through the very successful partnership that we had between Qantas and American Airlines. And since I joined the Board a few months ago, I have seen a dedicated Vanessa and her management team are to restoring Qantas' reputation as one of the most trusted and admired airlines in the world. And I am very confident they will do just that. So I'm excited to apply the experience and insight I've gained over almost 4 decades in the airline business to do what I can to assist in the effort, and I appreciate your support for election to the Board.

Thanks, Doug. I now formally propose the following ordinary resolution that Doug Parker, a Non-Executive Director, appointed by the directors on 23rd May 2023 pursuant to Clause 6.5A of the Qantas Constitution and retiring in accordance with the constitution and ASX listing rules being eligible, is elected as a Non-Executive Director of Qantas Airways Limited. The directors with Mr. Parker abstaining unanimously support his election and recommend that you vote in favor of this resolution. I'll now take any questions on Doug's election starting any in the room. I don't think there's any online James?

No questions on line for this item, Chair.

Okay. Then I'll turn to details of the proxy votes received prior to the meeting. On the screen are details or will be details of the proxy votes received in respect of Doug's election. For those voting today, please cast your vote now if you haven't already done so. Again, it looks like a very strong support, Doug and congratulations. Thank you. The third election is that of Dr. Heather Smith, PSM being Item 2C of the Notice of Meeting. Heather was appointed by the directors as a Non-Executive Director on 24th of August 2023. The Board believes Heather's significant international affairs, public service and professional director experience enables her to make a valuable contribution to the deliberations of the Board. And I'd now like to invite Heather to say a few words.

Thank you, Richard, and good afternoon, ladies and gentlemen and thank you for the opportunity to speak with you today regarding my election as a director. I joined the Board on the 24th of August, as the, I think, the accumulated frustration from our customers and our shareholders saw our social license to operate rightly under intense scrutiny and questioning. As we've discussed and heard today, trust and confidence have been lost. Many of our customers are angry and frustrated and unfortunately, many of Qantas's amazing employees have unfairly borne the brunt of this. As a long-standing customer, I, too, have experienced and been disappointed by the events of the recent past. In the short time though that I've been on the Board, like Doug, I've witnessed a team that is determined to build back this trust and take this iconic company into the next growth phase with both ambition, humility, transparency and accountability. My background and experience are outlined in the notice of meeting I have over 20 years' experience in government at leadership levels, including as a CEO of 2 Commonwealth departments. I currently serve on 2 other ASX-listed Boards as a Non-Executive Director of Financial Services Firm Challenger Limited and also Non-Executive Director of ASX Limited and of ASX Clearing and Settlement Limited. In short, I understand the criticality of balancing regulator, financial and social license while also positioning companies for future growth. My experience in managing multiple stakeholders, regulatory arrangements, governance and financial discipline, gives, I think, a set of skills that I believe can make a valuable contribution to the Board. I also bring a people-centric mindset to strategic settings and to governance and accountabilities whether it be how we serve our customers, look after our people, ensure value for our shareholders or how we engage respectively and openly with stakeholders. Qantas is arguably Australia's most globally exposed company. And importantly, I bring a global mindset, deep international experience, a multidisciplinary skill set covering economic, foreign affairs, national security and intelligence matters. Together with my fellow directors, I'm committed to working with management to uplift our customer and our governance standards to ensure our performance matches expectations. I'm dedicated to acting independently and are committed to delivering sustainable value to you, our shareholders. Thank you for your time today.

Thank you, Heather. I now formally propose the following ordinary resolution that Dr. Heather Smith, PSM a Non-Executive Director, appointed by the directors on 24th August 2023 pursuant to clause 6.5A of the Qantas Constitution and retiring in accordance with the constitution and ASX listing rules being eligible, is elected as a Non-Executive Director of Qantas Airways Limited. The directors with Heather abstaining unanimously support her election and recommend that you vote in favor of this resolution. I'll now take questions on Heather's election study. I'll go online, James?

Chair, we have a question from Stephen Mayne, who says there's been a lot of debate about the influence Qantas has over the federal government and regulatory settings through programs such as the Chairman's Lounge and parliamentary dinners. Given her long history in the federal public service could Heather disclose her personal history of Chairman's lounge memberships and any association she brings to the Board table with cabinet members, policymakers and regulators in Canberra who deal with Qantas issues. Could the Chair address the question of whether Heather's recruitment to the Qantas Board was in part driven by her so-called Canberra connections.

So thanks, Stephen, for the question. I'd say Heather answered that question really well when she said she brings a global mindset, deep international experience, a multidisciplinary skill set covering economic foreign affairs, national security and intelligence matters to the Board. And that's why she has been recommended for election to the Board and appointed by the directors prior to this. Heather, I think her leadership of departments, I saw it firsthand when she was heavily involved in when Australia hosted the G20 in 2014. I think Heather is an outstanding person will make incredible contribution. I think the other matters asked irrelevant. Microphone One.

Chairman, may I please introduce Rachel Waterhouse.

Thank you, Chairman. Just as far as those skills that were expressed, we're actually voting now today we have voted for Heather at the ASX. But do those skills not exist in anyone else on the board at this point in time?

I think what I ask you, when looking at board composition, you look at a matrix of skills no one on the board with particularly as Michael L'Estrange retiring, no one's got the set of skills that Dr. Smith -- Heather Smith has, I think she brings an incredible array of background skills the fact that the Prime Minister is appointed at a co-lead a review of national security. Says a heck of a lot about her capabilities and focus, frankly, I feel incredibly pleased that we've been able to attract to Heather to join the Qantas Board. I think she'll make an immense contribution. Thank you. If there's no further questions, I'll turn to details of the proxy votes received prior to the meeting. On the screen, you'll see details of the proxy votes received in respect to Heather's election. And for those voting today, please cast your vote now if you haven't already done so, but Heather at 99.36%. That's a very strong endorsement. Congratulations. First director reelection is that of Belinda Hutchinson, AC being Item 2d of the notice of meeting. Belinda was appointed to Qantas Board in April 2018. She is Chair of the Audit Committee and a member of both the Safety Health Environment Security Committee and the Nominations Committee. The Board believes Belinda's extensive background in the financial services industry, together with her experience as a professional director, enables her to make a considerable contribution to the Board, those committees that I just talked about and as Chair of the Audit Committee. So I'd now invite Belinda to say a few words.

Thanks, Richard, and good afternoon, everyone. As Richard said, I've been on your board since 2018, the past 4 of those 5 years have been some of the most challenging in the over 100-year history of this company. When I thought reelection and addressed you at the 2021 AGM, I spoke about Qantas' efforts to overcome various significant financial pressures. Those pressures arising from the pandemic or the closures from lockdowns ultimately resulted in over $7 billion of operating losses. Unfortunately, the restart of Qantas' operations have proved to be just as challenging as the shutdown. I understand that rebuilding our operational capacity has caused disruption and frustration to our customers and our people. Along with my fellow directors, I accept accountability for where we got it wrong and I joined Richard and Vanessa and sincerely apologizing to you, our shareholders and all our other stakeholders. Qantas is now at a pivotal moment of renewal with new leadership in Vanessa and her executive team, further board changes over the coming months and significant investment in operational capacity, including expansion and renewal of our domestic and international fleets. Getting the balance of renewal and continuity right is critically important. The Board and management have worked really hard to rebuild financial sustainability, which is reflected in the company's strong cash flows and balance sheet. We are now determined to rebuild your and our customers' trust in us. I'm taking your support for reelection as I believe I can contribute to the task ahead as we rebuild because I can apply my experience from over a 25-year career in financial services, directorships of a number of some of Australia's largest companies and most importantly, the learnings over the past few years at Qantas. A key part of the accountability I mentioned earlier is a review of governance issues over the past 12 months. As Chair of Audit and Risk, I am committed to ensuring that we learn from the mistakes that have been made, so we work together to rebuild the trust of you, our shareholders, our customers, staff and everyone in our community. As Chair of Audit, I'm also accountable for the oversight of Qantas' financial reporting and the effectiveness of our Audit and Risk Management. In addition, as a member of the Safety, Health, Environment and Security Committee, I'm committed to careful oversight of those areas as we maintain our unwavering focus on safety and we continue to rebuild our operations, integrate new aircraft and new routes and ramp up training so that our people have the appropriate skills and opportunities. I would like to finish by thanking our people for their extraordinary loyalty and dedication, our customers for their support and you, our shareholders, for your understanding throughout these challenging times.

Thank you, Belinda. I now formally propose the following ordinary resolution that Belinda Hutchinson AC, a Non-Executive Director, retiring in accordance with the Qantas Constitution ASX listing rules being eligible, is reelected as a Non-Executive Director of Qantas Airways Limited. The directors with Belinda abstaining, unanimously support her reelection and recommend that you vote in favor of this resolution. We'll start with question, any questions online, James?

Chair. We have a question from Stephen Mayne, who asks as the most experienced professional director on this board and someone whose exit has not been announced. Could Belinda and the Chair both address the question as to whether the search for a new chair will include existing directors which recruitment firm has been appointed to assist with this chair recruitment task and which individual at this firm is in charge of the high-profile project?

Thanks, Stephen, for the question. If I read it correctly, I think you're asking any of the existing directors up potentially being chaired I wouldn't rule anything in or out at the moment. I think it's been publicly disclosed that Egon Zehnder is doing the search work on the chair and that process has well and truly of an incoming chair. That process is well and truly started. Just for shareholders, Important to note that the chair of Qantas has to be an Australian -- Australian citizen. So that's important. And we're -- we want to bring that person onto the Board or potential chair onto the Board if not already on the Board as soon as we possibly can, given that we need to go through a process just so that person gets an opportunity to look and do a lot of work on the complexities of Qantas that they'll need to understand. So that will keep shareholders appraised of that process. Microphone one.

Chairman, Rachel Waterhouse.

Thank you very much for your comments. And Mr. Chairman, as you are aware, we are voting undirected proxies for Ms. Hutchinson's reelection, this is on the basis of Board stability, given the changes flagged over the next 12 months. Could Ms. Hutchinson, please address shareholders regarding the lessons she has learned being on the Board of Qantas over the last 12 months and the actions she will be suggesting the Board consider going forward.

I think -- thank you Ms. Waterhouse. I think Belinda has addressed that in her talk in one of -- in how she spoke to shareholders, one of the things she talked about was not just the lessons of 25 years in the financial services industry, but and on being on board of major companies, but certainly have her period, I don't think it's appropriate that she goes through what those specific lessons are. But one thing I can assure you and other shareholders is that as we review the events of the last 12 months, we will be taking those very much those learnings into future governance of Qantas. And I think Belinda's contribution to that will be very, very important.

So we look forward to the governance review. Thank you very much.

Thank you I'll now turn to details of the proxy votes received prior to the meeting. So on the screen are details of proxy votes received in respect of Belinda's reelection. For those voting today, please cast your votes now. If you haven't already done so, Belinda on the basis of the votes received to date, congratulations. The second reelection is that of Todd Sampson being Item 2E of the Notice of Meeting. Todd was appointed Qantas Board in February 2015. He is a member of both the Remuneration Committee and the Audit Committee. The Board believes that Todd's significant marketing and management experience enable him to make a valuable contribution to the deliberations of the board and those 2 committees. And I'd now ask Todd to say a few words.

Thanks, Richard. Good afternoon. 8 years ago, I was asked to join the Qantas Board, and I was excited to accept for 2 reasons. It's an important iconic company, and I thought I could make a difference. As you may know, my experience and skill sets in customer and marketing is not the dominant skill set on boards today. Thankfully, that's changing. I reflected a lot on my decision to stand for reelection. I went back and forth on many thoughts regarding that. And my 2 reasons for deciding to stand again. The first one is corporate memory. Over the next 2 years, we need a level of consistency as well as renewal and particularly the challenges that we face and the number of directors that are changing, corporate memory is important. So is in my mind, my personal accountability and being there as someone that was involved in all those decisions and many of the decisions that we will make going forward in the future. And I just want to say I take full responsibility from my role on the Board and the attention that, that has brought. The second and perhaps the most important reason is experience. Our brand and reputation have suffered considerable damage, damage that we can and will repair and I've spent a career helping other clients in similar brand situations that we now find ourselves in. This repairing at least in the initial stages, it's not so much about advertising and marketing. It's about the customer experience. And as Vanessa said, it's about doing, not saying. So I guess of all times in Qanta's history, especially with the new CEO, this is when my experience will be most valuable. So I thank you for all the support to date and with your continued support. I look forward to helping rebuild Qantas back to its iconic status. Thank you.

Thank you, Todd. I now formally propose the following ordinary resolution that Todd Sampson, a Non-Executive Director, retiring in accordance with the Qantas Constitution and ASX listing rules being eligible, is reelected as a Non-Executive Director of Qantas Airways Limited. The directors with Todd abstaining, unanimously support his reelection and recommend that you vote in favor of this resolution. Are there any questions, James?

Chair, we've had a number of similar questions in relation to this item that are summed up by this question from Stephen Paul, who asks with Mr. Sampson's experience in the media and advertising space and his ability to see the big picture what reasons does Mr. Sampson have on behalf of the Board for completely misreading the [indiscernible] over the past several years. What tangible contributions as Mr. Sampson brought to the Board and the company, given that the public sentiment that was obvious to everyone was seemingly not presented to the Board over the last few years.

So I'd make a couple of -- thanks, Mr. Paul, for the question. I'd make a couple of comments on that. Firstly, directors come to the Board with a range of experiences. And in fact, we encourage all directors to make contributions on in areas where they may not have a personal experience because sometimes that they can be the most important observations. I think, as I said earlier, Todd has and we believe will continue to make a very strong contribution to the Qantas Board on many fronts, and he's talked and outlined his experience in matters which we think are incredibly important. I do want to say, we've talked a lot today about needing to improve on where we've been and putting in place all the actions required to do that. But it is wrong to think that there wasn't visibility on the issues that the has been fixing the issues as quickly as we may, as we wanted to and doing it in a way that has brought our customers with us. And clearly, in many cases, we haven't done that.

There are no further questions for this item.

Thanks you. So on the screen are details of the proxy votes received in respect of Todd's reelection. Those voting today, please cast your vote now if you haven't already done so. So on that basis, Todd well done, you'll be reelected to the Qantas Board. Before considering [indiscernible] talk to remuneration matters. Before considering the remuneration-related resolutions, we will hear some remarks from Jacquie Hey, Chair of the Remuneration Committee on Qantas' approach to ram on this year's remuneration report. During her address, Jacquie will specifically deal with the remuneration-related themes emerging from discussions with shareholders and the questions submitted in advance of this meeting. So I'd now ask Jacquie to address the meeting.

This year's remuneration report to Qantas shareholders. Both the Chairman and I have undertaken extensive consultation with a large number of our investors and it's clear that we have fallen short of your expectations and that this will be reflected in a level of support for our remuneration report that will result in our first strike. To all of our investors, we do hear your feedback. We understand your frustration, and we're working actively as you've heard today, I hope to implement changes that will put us on a path to restoring your trust. You can expect that we have and will continue to use our discretion to ensure accountability and align remuneration outcomes with performance and with the reasonable expectations of our stakeholders. While it was pleasing to see improved financial results and resumptions of more normal levels of flying, our pride in those achievements is tempered by disappointment that was yet to return to a level of performance that is meeting our customers' expectations. This is compounded by additional concerns that have arisen as a result of the high court outcome and the ACCC proceedings. Let me now address the key areas of remuneration for financial year 2022, '23. First, base pay or annual salary. The former CEO's base pay remained unchanged for the fifth consecutive year. In line with the end of the group's 2-year wage freeze, there was a 3% increase in base pay effective from the 1st July 2022 for some of the executive management. Secondly, our annual incentive plan, which we refer to as the short-term incentive plan returned in FY '23 as a result of returning to more normal operating conditions. During the year, Qantas achieved an underlying profit before tax of $2.465 billion. This strong financial performance was accompanied by achievement in other areas of the STIP scorecard to deliver a [indiscernible] scorecard of 126% out of a total of 175%. We had increased the weighting of our customer metrics in FY '23 from 15% to 20% of the overall STIP scorecard. However, it's clear that we did not deliver the level of service our customers expect. On-time performance was the only area in which we achieved our target and in acknowledging that our broader customer performance did not meet expectations. The Board exercised its discretion as it did in '21, '22 to 0 this component for all executive members. In addition, it was determined that there would be a 20% downward adjustment to the 2022, '23 STIP outcomes for executive management in recognition of the known customer and brand issues. After the conclusion of FY '23, but prior to the delivery of the STIP awards, the Board was notified of the commencement of the ACCC proceedings on the 31st of August, followed by the High Court findings on the 13th of September. Our response was to withhold the remaining balance of the 2022/'23 STIP award until the Board has further information on both these areas. We believe this is a prudent course of action and provides the Board with the flexibility to take further action when we are equipped with all the facts. We can then apply consequences in a fair and balanced way for all stakeholders. Looking ahead to FY '24, after extensive consultation with investors on the balance of financial versus nonfinancial components in scorecards the Board has increased the weighting of the customer component further to 30% of the STIP scorecard. We had tested other expanded options but have listened to our shareholders' feedback. Our message to management though is unambiguous. We must deliver the level of service that our customers have a right to expect and on which our historic reputation for customer service has been built. As flagged at our 2021 AGM, there was a need to refocus on our recovery plan for post-COVID times and to respond to the increasing levels of attrition of our talented people. And in February 2022, we launched our recovery retention plan. This was a one-off 2-year performance incentive tied to the delivery of Qantas' COVID recovery plan. It was launched during a highly uncertain period for the company, and it received strong shareholder support at the 2022 AGM. All the performance measures in the plan were satisfied with the group delivering over $1 billion in cost reduction, net debt below the top end of our net debt range and strong return to profitability on an underlying profit before tax basis. The delivery of our recovery plan meant we were able to reward over 20,000 employees many of whom became shareholders for the first time in recognition of their contribution. 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, other companies in the ASX 100 and a peer group of listed global airlines. In the 2021 to '23 LTIP, we fully achieved the performance hurdles. Qantas ranked in the top quartile of our airline performance peer group and is outperformed most airline peers over the past 3 years and, in fact, has achieved a top quartile performance in each of the past 8 rolling 3-year periods. We've also returned to top quartile performance against the ASX 100 as of the 30th of June, achieving 17th. Based on this performance, 100% of our executives LTIP rights vested and converted to shares that are restricted and subject to clawback for a further 1-year period. In a similar way to which the Board has held back STIP, the 1-year restriction and a clawback policy means that the Board also has ongoing discretion to evaluate whether this award is ultimately released to executives. Those powers also allow the Board to extend the restriction period should we determine that it be required. Again, we will continue to act prudently taking into account facts as they emerge and to act fairly and in consideration of all stakeholders. Looking ahead to FY '24, the 2024 to '26 LTIP introduces a third measure focused on reputation. Utilizing the independently -- independent externally measured RepTrak measure, the Board has set the target to restore Qantas' reputation to the market-leading levels of regard that we occupied previously. We know that this effort will require us to deliver sustained levels of customer performance over a number of years. And as a result, we think using reputation as a measure in the LTIP is appropriate at this time. After 15 years in the role, the former CEO, Alan Joyce, retired from the group on the 6th of September 2023. Alan's remuneration in this last year with the group was significant compared to the previous few years with a one-off payment associated with his decision to accept his prior LTIPs that had vested unconditionally but that he had deferred. In addition, he participated in the vesting of the RRP and the foresting of the current year LTIP. Alan's STIP or short-term incentive was treated consistently with the rest of the executive management and that his annual incentive has been subject to the same 20% level of deduction and the remainder is currently withheld. Importantly, the Board retained significant capacity to exercise clawback and/or malus on the current year LTIP and the LTIPs, which remain on [indiscernible]. The total value of this remuneration that's subject to clawback and/or malus is calculated in our 2023 remuneration report of $14.4 million. And this is in addition to the withheld $2.19 million in relation to the 2022, '23 STIP incentive. The Board will transparently disclose any decisions made in relation to this remuneration once the facts are established. As announced in May 2023, after an extensive search process, Vanessa Hudson was selected as CEO Designate and became CEO of the Qantas Group on the 6th of September '23. In appointing Vanessa to the role, the Board was cognizant of investor feedback on the level of remuneration of the former CEO received. In addition, we also recognized that the role was Vanessa's first CEO level appointment. Having commissioned independent external market benchmarking, the board rebased the CEO remuneration package to a lower level, while still ensuring it is a fair and market competitive package. Non-Executive Director fees were remixed during 2022, '23 ensuring a 0 overall increase. This is within the current [ NED ] fee pool limit. There was no change to the Chairman fees. Greater usage of the NE director benefit resulting from more normalized levels of flying was the main difference in remuneration for non-executive directors. In conclusion, as I mentioned at the commencement of my speech, I'd like to repeat to all of our investors. We hear your feedback. We understand your frustration. We've taken some actions already, and we're actively working to implement further changes focused on restoring your trust. We have, and we will continue to use our discretion to ensure accountability and alignment of remuneration outcomes. Further decisions will be taken and communicated to you as the Board reaches conclusions about the facts of the matters currently before us. In the meantime, and looking ahead, we've taken active steps in our approach to remuneration and to heighten the focus on delivering great customer experiences to align management to the sustainable recovery of our reputation, and we've strengthened further our powers of discretion to drive appropriate reward outcomes in the future. I'll now hand back to the Chairman who will present the resolutions.

So thank you, Jacquie. The one I'm going to deal with this as outlined in the order of meetings, which is under the grant of rights to the CEO first, and then we'll come to the remuneration report. So the next item of formal business for this meeting is to consider the proposed award of rights to your CEO Vanessa Hudson on the group's long-term incentive plan. The award is explained in the Notice of Meeting. However, I'd like to reiterate an important point on the operational plan being the rights awarded will only vest and convert to shares if the respective performance conditions are fully achieved. For the long-term incentive plan, rights divesting 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 a 3-year period or and that vesting in full requires that Qantas reputation level will be assessed as excellent at the end of the 3-year performance period under the RepTrak methodology. Should any of the 3 performance conditions be achieved, the rights will vest proportionately and convert to Qantas shares on a one-for-one basis. These shares would then be subject to an additional 1-year holding lock. If the performance conditions are not achieved, the rights lapse and those shares are awarded. I now formally propose the following ordinary resolution that Vanessa Hudson, the Chief Executive Officer of Qantas Airways Limited, is permitted to participate in the long-term incentive plan as contemplated by the explanatory notes accompanying the 2023 Notice of Meeting. The directors with Vanessa abstaining, recommend that you vote in favor of this ordinary resolution. And now I'm happy to take any questions on that item of business. James, anything online?

[indiscernible]. I think we've got a question in the room, so I'll just wait. Microphone 3.

Chairman, may I please introduce Malcolm Frasier.

Mr. Frasier?

Thank you, Chair. I actually did fly Qantas from Sydney to Melbourne yesterday, especially to take part in this occasion.

I appreciate you doing that.

And it really worked well.

That's good. It's good to have you here. Thank you.

From my 21st birthday actually received a copy of had some [indiscernible] book Qantas rising. And I think that's what we're talking about today, Qantas rising. I think STIs and LTIs, I think they are not really the thing that we should be offering in the first place. I've been privileged to share -- to serve Qantas, which I consider to be a really great company for 39 years. And I feel that service itself should be the incentive for why all of us serve Qantas. Indeed, our founders, our 3 founders, Fergus McMaster, Paul McGinness and Hudson Fysh all served in World War I facing considerable danger as they did. And then they returned. And McGinness got this idea of having an airline and here we are today. just ordinary people who founded this great airline. In 1998, I saw this airline was facing competition from other operators and I voluntarily had my salary frozen for 8 years. The union actually supported me in this they thought it was a way of keeping me quiet at union meetings. But it was discovered that this didn't comply with regulations for the employment of award staff members. And so I got all the money back again.

What were you doing, Mr. Frasier?

I was a professional engineer in the company. But I feel that what really is needed to get recognized is the value of the satisfaction of working for this company and giving service, and that is far more important to me than having the STIs and the LTIs, thank you very much.

Thanks, Mr. Frasier, and thanks for your long service at Qantas and your ongoing support. I do want to reiterate -- and I know rem -- will come to remuneration in a second, it can be a very contentious matter. But I do think that culture of service at Qantas is alive and well. And as Vanessa said in her report, in her speech earlier on, with 700 people applied to do these flights from London to Tel Aviv recently to get people out of Israel. And we had a similar experience at the beginning of COVID when we took 747 into Wuhan, and we've never done that before. And we had -- and people didn't know actually how dangerous the virus was then. And we had multiple numbers of flight tech crew and cabin crew and people from government volunteer to participate in what were dangerous situations. And I think that speaks volumes, frankly, to the service commitment in Qantas. And I know it's something that the Board and Vanessa, it is part of our culture, but it's something that we'll continue to foster and encourage them. I think our people do amazing things. So and thank you for your service. I appreciate it. I think I'll turn to proxy votes now on the LTIP. So on screen, our details of proxy votes received in respect to the allocation of rights to CEO under the long-term incentive plan. As outlined in the notice of meeting, Qantas will disregard any votes cast on this resolution by Vanessa, her associates and her closely related parties, except as directed by any proxies. Proxies votes cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chairman of this meeting, I intend to vote all undirected proxies in favor of this resolution. For those voting today, please cast your vote now if you haven't already done so. I think it needs -- 50% approval. So I would assume that when the results go to the ASX later today, this resolution will have been passed. I now move to consider an advisory resolution to approve the remuneration report. The remuneration decisions made by the Board during the year were just outlined by Jacquie Hey and are detailed in the remuneration report. I now formally propose the following advisory resolution that the remuneration report for the year ended 30 June 2023 set out in the directors' report is adopted. The directors recommend that you vote in favor of this advisory resolution. And I'll now take questions on it, James.

Chair. We have an online question from Adrian Reading, who says Qantas has been found guilty of acting illegally by stacking the baggage handlers and the brand has suffered significant damage as a result. If any other employee acted in such a manner with similar results, they would have been fired, but management gets a bonus as a result of these actions. Can you please justify the difference in consequences?

So thanks, Mr. Reading. And as I said just now, remuneration can be difficult and challenging on some things. And I think Jacquie outlined the issues very well in her address to the meeting just now. And as she said, we will look at the implications on brand, particularly around the baggage handling issue and the ACCC issue in terms of what has been withheld or what could be withheld in the future from executives and their decisions that we'll make in the times ahead. Microphone one.

Chairman, Rachel Waterhouse.

Yes. Thank you.

Mr. Chairman, Australian Shareholders Association has made a number of suggestions in our voting intentions regarding changes that could be made to the remuneration plan. This includes keeping the second LTIP measure to be something other than TSR and more detail around the LTIP measures, greater transparency and concern around expanding -- wanting to expand the clawback and malus clauses so that the company is not completely reliant on proving this conduct should management decisions cause risk. Just would like to receive a response on your initial thoughts on that. And you've got the detail.

Yes. Thanks, Ms. Waterhouse, and I appreciate that in that detail. As part of the review we're doing on governance matters. One of the things we are looking at is what best practice is on remuneration, on terms, conditions and a whole bunch of things like that. We expect changes will be reflected at this time next year and the remuneration for the following year. So we're looking at all those issues at the moment to ensure we've got the right terms and conditions that the Board has the appropriate mechanisms to adjust as required. But in a way that is fair for both shareholders and the executive. And so what we're endeavoring to do is having a really hard look at now is just go back and have a look at our whole remuneration policy and see that it is best practice. But achieves what we wanted to do, which is to appropriately incentivize management and be aligned with shareholders. And we appreciate the ASA's feedback on it. Thank you. If there's no questions, I'm going to take the details of the proxy votes received prior to the meeting. On the screen are details of the proxy vote, we did tell you -- on the screen are details of the proxy votes received in advance of the meeting in respect of this resolution. Qantas will disregard any votes cast on this resolution by key management personnel whose remuneration is detailed in the remuneration report and their closely related parties, except if cast as a proxy and the votes are directed. Chairman of this meeting, I intend to vote all undirected proxies in favor of this advisory resolution. For those voting today, please cast your vote now if you haven't already done so. This is obviously a very clear message from shareholders and it's matched by the determination we have to restore trust and confidence. Final details will be released to the market later today. The final item of formal business for this meeting is to consider the on-market share buyback being Item 5 of the Notice of Meeting. The Notice of Meeting contains background and details of the proposed buyback. I now formally propose the following advisory resolution that for the purposes of Section 257C of the Corporations Act 2001 Commonwealth, and for all other purposes, the company is authorized to conduct an on-market buyback of up to 200 million fully paid ordinary shares in the company shares in the 12-month period following the approval of this resolution on the basis described in the explanatory notes issued for this meeting. The directors recommend that you vote in favor of this ordinary resolution. And I'll now take any questions. James, nothing?

Chair. We have an online question from Alan Kirk who says we need to spend hundreds of millions at least on new aircraft, which can be funded from that equity or through borrowing at ever-increasing interest rates. So who thought it was a great idea to buy shares back from people who want out of the company in the long-term cost of the rest of us who will be settled with interest payments for future CapEx. All you achieve is a short-term boost to the share price, which makes it easier to appear to hit KPIs.

So thanks, Mr. Kirk and it's actually a really important point, and Vanessa might want to jump in on this as well. We want to create value for all stakeholders at Qantas. Our customers, our star, our employees, the communities in which we operate, the environment and our shareholders. And getting the appropriate balance is very important. As I said earlier, the on-market buyback is the way we're using capital management to reward shareholders, and we are in a position to do that because of the strong financial performance of the business. It's always done in accordance with our financial framework, which looks at a level of gearing our future capital commitments, how we look at future cash flows and things like fuel prices and the broader economic environment, bookings all factor into that. And the Board when we looked at the capital plans for both Sunrise for the domestic fleet renewal and the international fleet renewal, looked at a range of scenarios as you would expect us to do around cash flows over a long period of time. And One of the things that is very positive about this business is the capacity to withstand shocks as we've seen over the last few years. So we believe that there's very -- we've got the capacity to do buyback to buy these planes, invest in staff. We've got terrific arrangements in terms of the purchase of the aircraft, which enables us to move and things -- move delivery and other things if circumstances so allowed. But this resolution today enables us to continue buy back shares at a time when we think it's a very good thing to do with excess capital in the business. Do you want to add anything as a former CFO or current CEO?

Fairly. I think Richard has summarized it really well. And the one thing that is our commitment is that we do follow a financial framework that has been in place since 2015. It enables us to, as the Chair said, balance being able to invest in our business, invest in customers, invest in new fleet, invest in our people, but also provide and recognize our shareholders by making sure that we strike that right balance. We did discuss earlier that at the moment without franking credits, the most efficient way for us to do that is by a way of a buyback and the reset that this resolution seeks is to -- if the Board considers that it is appropriate through the financial framework for the remainder of this year, it enables us to continue to do it. But striking the right balance is what is our commitment this year but also going forward over the coming years.

Thanks, Vanessa. So I'll now turn to the details of the proxy votes received prior to the meeting on the screen are details of those proxy votes received in advance of the meeting in respect of this resolution. For those voting today, please cast your vote now if you haven't already done so. Now I think I was going to give shareholders 5 minutes. So all resolutions have been dealt with now, which concludes the formal business of this meeting. So I'll now declare this meeting closed. Shareholders and proxy holders will have 5 minutes from now to complete their voting via the online platform. Once votes have been accounted for and verified by the share registry, the results of the AGM we lodged with the ASX as soon as possible, which we expect will be later this afternoon. On behalf of the Board, I thank you again for your ongoing support for joining us today at the Qantas 2023 Annual General Meeting. Thank you very much.