Qantas Airways chief executive officer Alan Joyce plans to see through a A$2 billion (€1.4bn) cost-cutting program at Australia's largest carrier. With shares more than doubling this year and its international unit set to post its first profit since 2011, Joyce, 48, said he's got no plans to move.
“I’m here to complete the job that I started,” he said on a media call after forecasting the best half-year earnings in four years.
“With the company turning the way it is, I’m very confident that my tenure -- as long as the board and shareholders are comfortable with what I’m doing -- will continue.”
Irish-born Joyce’s handling of 94-year-old Qantas has been criticised over the past year as it lost its investment-grade credit rating, posted A$2.8 billion of losses, and started cutting 5,000 jobs. Nick Xenophon, an independent Senator who sits on the Senate’s economics committee, has called for him to resign and Australia’s Prime Minister Tony Abbott in March blamed management for losses as he ruled out providing the formerly state-owned carrier with a government debt guarantee.
The airline is looking healthier now and will benefit further as savings come through from a 23 per cent fall in fuel prices since October 1st, said Michael Maughan, a portfolio manager at Nikko Asset Management Ltd. in Sydney. “They are on track or a bit ahead of plan on these transformation savings,” he said. “
Given that they were upgrading earnings without a huge benefit from fuel in the period, it augurs well for the full year.”
Shares double
Qantas shares hit a record-low 95.25 Australian cents in December 2013 amid a market-share war with Virgin Australia Holdings Ltd.. Three foreign airlines bought stake in Virgin to prop up its finances. Qantas's stock rose the most in more than a year in Sydney today after the carrier said profit before tax and one-time items will be between A$300 million and A$350 million this half. That would be its best six months since it posted A$417 million profit on the measure in the December half in 2010. The stock was trading at A$2.38, its highest level since February 2011 and up 14 percent on the day, at 12:27 p.m. in Sydney.
The airline, known as the Flying Kangaroo, is the best- performing stock this quarter on Australia’s benchmark index and the best-performing carrier outside the US with more than $1 billion in revenues this year, according to data compiled by Bloomberg.
Joyce’s salary
Joyce took up the position in November 2008. His base salary last year was the highest last year of any listed airline chief worldwide after Korean Air Lines Co.'s Cho Yang-Ho, according to data compiled by Bloomberg. The CEO froze salaries, cut capital spending to a 17-year- low and planned to sell assets to restore Qantas's profits. The improved result should increase the airline's chance of posting a net income in the year to June, where three of nine analyst estimates compiled by Bloomberg are still foreseeing losses.
Qantas, which had A$2.8 billion of losses last year, has lost money before tax and items in the second half in each of the past three years.
Bloomberg