It’s disappointing that after a board meeting which spanned two days, the Qantas board couldn’t make a statement about how the airline’s profits were going.
It’s as though the siege mentality the board brought upon itself, with the help of CEO Geoff Dixon, is still the main driving force.
The board meeting Thursday and Friday found time to agree to the timed departures of chairman, Margaret Jackson and director, James Packer, but just couldn’t see its way clear to either restate the last update on earnings or produce a new update.
After the traffic figures for March and the nine months to the end of March showed the airline doing better than it has for years, that omission in Friday’s afternoon’s statement shows why more change is needed at the top of the airline’s management and board structure.
Ms Jackson and Mr Packer will be hanging around, lame-duck like, until the annual meeting in November, which would make it six months of remaining in place despite being on the nose with many shareholders for their inept, unconditional endorsement of the Airline Partners Australia $5.45 a share offer.
That offer might have been higher had the board demanded that Dixon and his management team produce a plan to boost the share price.
The chairman’s silly comments about the share price and the way the market treated the company completely overlooked the impact of the ‘chicken little’ scare tactics of the Chairman and CEO in every pronouncement on profits, competition, union claims, cost cuts and possible policy changes by the Federal Government.
The dire warnings from Mr Dixon and the chairman over the past couple of years have represented corporate denial of the worst kind.
Qantas’ share price dipped to a low of $2.82 last year because of the sharp rise in oil prices and the fact that the management and board did nothing to point out how well insured it was against any lasting impact from the level of hedging and the improving business outlook, which was happening just as world oil and jet fuel prices were peaking.
The board and especially Mr Dixon are to blame for the negative feeling in the market before the APA bid because of their lack of movement on corporate changes, getting rid of assets and running down absurdly high cash levels.
Their repeated scare mongering commentary didn’t assist either and then there was the absurdity of the same bunch of people rushing headlong into the arms of APA when they should have been proposing a set of changes and actions of their own to fight off the bid.
That’s why when you read the two page Qantas statement issued on Friday afternoon, think of what wasn’t said, but should have been:
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The Chairman of Qantas, Ms Margaret Jackson, said today she would retire from the Board of Qantas later this year.
Ms Jackson said she had informed her fellow Qantas Board members of her decision at the start of a two-day Qantas Board and Management Strategy session yesterday.
“The meeting discussed Qantas’ plans for the next three years following the failure of the takeover bid by Airline Partners Australia.
“It also discussed Board succession planning and management stability,” Ms Jackson said.
Ms Jackson said fellow Board member James Packer had also informed the Board yesterday that he would resign from the Board effective from the AGM later this year.
“The Board will spend the next few months considering my succession and a replacement for James, who has served the Board with distinction and diligence,” she said.
Ms Jackson said the Board indicated full support for the management and its positive and exciting plans for the future of Qantas.
“In particular the Board endorsed the leadership of Geoff Dixon as Chief Executive Officer and his senior management team.”
Ms Jackson said Mr Dixon had committed to stay as Chief Executive Officer until at least July 2009.
“Geoff and I have also spoken to the senior management team who have agreed to continue with Qantas”
Ms Jackson said the past eight months had been particularly testing and coupled with 15 years on the Board and seven years as Chairman, she felt it was a good time to move on and not stand for re-election to the Board.
“I greatly value what Qantas has achieved over the past seven years, culminating in the largest takeover offer for an airline in aviation history.
“I am also confident that the strategies we have put in place will secure a successful future for Qantas.
“These strategies have been endorsed by the market and they formed the basis of the bid by Airline Partners Australia.”
Ms Jackson said the Board over the past two days reinforced its support for a continuation of the company’s strategic direction, including:
– to grow and defend the domestic flying businesses;
– to restructure and redirect the international airline;
– to grow Jetstar;
– to invest in new generation aircraft and product;
– to consider consolidation opportunities;
– to seek portfolio business rationalisation and growth opportunities;
– to restructure the company’s supply businesses; and
– to further pursue cost reduction and efficiencies through the successful Sustainable
Future Program.
Ms Jackson said Qantas would also conduct an extensive review of its capital management strategies over the next few months.
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Besides the absence of an update on earnings we should remember that at the half year results in February, CEO Dixon urged the board and chairman not to have any briefings or public conferences because they didn’t want the bid discussed.
They also didn’t want the improving profitability of the airline to become a subject of debate either.
That constitutes an unfair attempt to influence the flow of information to shareholders, something
