Qantas boss Alan Joyce insists he has the backing of the board, despite the airline’s expected record first half loss.
While politicians have called for Mr Joyce’s head after five tumultuous years at the top, analysts say Qantas is facing a series of complex industry problems that have not been caused by management.
Qantas announced on Thursday it expects a half-year loss of up to $300 million and plans to axe 1000 jobs in a bid to save $2 billion.
Unions and politicians say Mr Joyce has presided over a trail of destruction, with almost 10,000 jobs being axed while the company’s share price plummeted.
“The board have been very supportive in all of this and the board understands the dynamics that have been facing the marketplace,” Mr Joyce said.
Fat Prophets senior research analyst Brian Han believes the board will continue to express confidence in Mr Joyce despite indications of further losses in the full year.
“But only time will tell how long shareholders will continue to support management and whether they think Alan Joyce and co are still the best team to run this airline,” he said.
Shareholders would be disappointed by the profit warning and weak share price, but some major events had been outside Mr Joyce’s control, Mr Han said.
Low overseas labour costs, high fuel costs, previous restructuring of Qantas, volatile trading conditions for airlines around the world and increased competition all had an impact.
Another analyst said Mr Joyce had done all he could to navigate the airline through a tough period and Qantas was a victim of an extremely difficult industry.
But independent senator Nick Xenophon and two Labor senators demanded the resignation of Mr Joyce and the airline’s board.
“What we’ve seen is an airline that has lurched from crisis to crisis, failed strategy one after another,” Senator Xenophon told reporters in Canberra.
Transport Workers Union national secretary Tony Sheldon blamed poor management for the job losses.
“We’ve got an airline in Australia that we’re nationally proud of, but a management that has managed to squander a 65 per cent market share to make a huge market loss,” he said.
Mr Joyce’s $3m pay will be cut by at least 38 per cent this financial year due to the airline’s poor performance.
Still, Mr Joyce highlighted his record of presiding over profits in four of the past five years at Qantas.
But he conceded the airline’s strategy of boosting domestic capacity to maintain its 65 per cent market share had contributed to the profit warning as it battles rival Virgin Australia.
