Qantas shares might have taken a bit a pounding yesterday in the wake of a downgrade by an analyst, but the real news was in a statement form the company where for the first time we had a look at the contenders to replace current CEO, Allan Joyce when he gets itchy feet after 10 years in the job..
Qantas shares fell 5.6% to $5.68 after JPMorgan analysts cut the stock to underperform from neutral saying that they estimate the airline will need domestic fares to rise 10% in perpetuity to justify the current share price which they said “seems optimistic to us”
They said that in the Qantas result on Friday the performance of “Qantas Domestic was a highlight,” while “the biggest disappointment for investors was likely the 36.1 per cent decline in earnings from Qantas International.”
For that reason the JPMorgan team reckons Qantas will need an ongoing big rise in domestic airfares every year to support the current share price (which was made a touch easier by yesterday’s fall).
But the analysts (because their report was prepared over the weekend) missed the more important story as Qantas revealed the contenders to replace Mr Joyce.
The CEO and the board swapped a number of roles about and brought in a new executive as part of the senior team in what is the biggest shuffle in five years.
That was made because a senior executive Jon Scriven, Group Executive of People and Culture, is retiring.
As a result the heads of its biggest divisions – international, Jetstar and frequent flyer – all change, while the head of domestic gets added responsibilities.
So that sees Jetstar boss Jayne Hrdlicka move into a new position running the Loyalty and Digital Ventures division. She will be replaced by Qantas International boss Gareth Evans, who will now run the airline’s low-cost carrier.
Mr Evans will be replaced by Alison Webster who is being promoted to the senior executive team from her current role running Freight, Catering & Airports.
Lesley Grant moves from chief executive of Qantas Loyalty to replace Mr Scriven.
Andrew David will remain as chief executive of Qantas Domestic but will also take on the additional responsibility for Qantas Freight, Catering and Airports.
Olivia Wirth will take on responsibility for customer and digital strategy in a new role of Chief Customer Officer. She will continue to oversee Brand, Marketing and Corporate Affairs.
According to analysts, the contenders for the top job are Gareth Evans, Jayne Hrdlicka and Andrew David. They say a new CEO has to have had airline experience at Qantas – the note that Mr Evans is getting experience at the bottom end of the market after leading International back into the black. Andrew David is having his responsibilities expanded to where they resemble a CEO. Ms Hrdlicka is now running the airline’s most important non-airline business.
