Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Earlier today Qantas, one of the world's great airlines, announced a record $2.84 billion loss—a staggering loss; a loss that appears to be inexplicable, given the role that Qantas has in Australian and world aviation. And what I would like to put to the Senate tonight and to the people of Australia is that, if Qantas needs to turn things around, it needs to get rid of Alan Joyce, the CEO; and Leigh Clifford, its chairman; and its board.

Sir Rod Eddington, a former airline supremo—British Airways, for instance—made a point that in a service industry such as the airline industry you cannot succeed, if you declare war on your workforce. That is what Qantas management has done. Let's put this in perspective in terms of what has occurred. Alan Joyce today said that there will be a turnaround; that Qantas is about to turn the corner. He has said it before. He said it back in 2010. He said in August 2010 that 'international demand and yield across the business and leisure sectors continue to improve' and that there was an improvement in international business. In February 2011, Mr Joyce said, 'Qantas Airlines produced a strong revenue performance across both its international and domestic operations.' Yet by June 2011 Alan Joyce was saying that Qantas International was in terminal decline. In that four-month period there was a 27 per cent drop in the share price of Qantas, but not a peep was said to individual shareholders and small shareholders in Qantas.

In 2012 we heard announcements made about Jetstar Hong Kong getting off the ground. It is yet to get off the ground, and they have blown millions of dollars from aircraft sitting in Toulouse, France, at Airbus's headquarters because they have not got regulatory approval and it is unlikely they will get it any time soon. We know that back in 2012 Alan Joyce said of Qantas: 'We continue to work towards returning Qantas's international performance to profitability in the short term.' That was another 'turning the corner' statement. We know that in August 2012 Qantas said 'significant progress' was being made on an international turnaround plan. We know that on 18 October 2013, at the AGM for Qantas, Alan Joyce and Leigh Clifford got up and said things were looking good and that there was a clear strategy for Qantas to turn things around. Yet just seven weeks later, 49 days after that AGM, they made an announcement of a predicted loss of up to $300 million. In the meantime the share price has fallen by more than a quarter, but not a peep was said in the interim period to investors.

That is something that concerns me very much. That is why at the beginning of last month, on 8 July, I wrote to Mr Greg Medcraft, the chairman of the Australian Securities and Investments Commission, our corporate watchdog, raising a number of serious concerns put to me by employees of Qantas over the years in relation to the conduct of Qantas and whether Qantas has been complying with its statutory obligations in respect of continuous disclosure and the good faith provisions in section 184 of the Corporations Act. I did not raise these concerns with Mr Medcraft lightly. I raised them because there are many unanswered questions.

During the Senate inquiry process—and Senator Sterle was the chair of one of those inquiries—I asked Qantas management whether they had given briefings to institutional investors and whether those briefings were secret or not. Qantas responded on notice that those briefings were commercial-in-confidence. That is not good enough. If we believe in the stock market and a free enterprise system, small and large shareholders should be able to access the same information all the time. That is what continuous disclosure is about. Why should a mum-and-dad investor be left in the dark when institutional investors can get special commercial-in-confidence briefings? I think that is outrageous. There are 117,000 small, mum-and-dad investors with 10,000 shares or fewer in Qantas. There are many families around this country who have put their significant savings into Qantas on the basis of statements made by Qantas management, and they have been let down time and time again. I only hope that ASIC is able to thoroughly investigate the claims that I put to it. These are comprehensive claims in respect of inconsistent statements made by Qantas over the years.

I also want to put into perspective the Emirates tie-up. You may remember, Mr President, that one of the key turnaround strategies for Qantas was that it was going to have a tie-up with Emirates that would make a big difference to that airline. I made submissions to and appeared before the ACCC in relation to this because Qantas said that its international division was 'in terminal decline'. Guess what? The ACCC found that that assertion was not proven by Qantas. Let's look at what has happened according to the Bureau of Infrastructure, Transport and Regional Economics figures. In the first 12 months of the Qantas-Emirates tie-up, from 1 April 2013 to 1 April 2014, Qantas's passenger numbers into the country went up two per cent, even though the market grew much more than that. Emirates's numbers went up 18 per cent. Who got the better deal?

I am concerned that secret, confidential briefings have been given to institutional investors to the detriment of small investors. If that is the case and the information contained in those briefings was material to the Qantas share price, that is a matter that ASIC must look at very closely.

I also want to comment on the whole issue of the shutdown of Qantas back in October 2011. It was a unilateral action by Mr Joyce that cost the airline some $200 million. I am not saying that the unions were blameless in relation to this, but it seemed to be an extraordinary action on the part of Mr Joyce. Interestingly—and these documents have been tabled in Senate committees—two weeks before the lockout, Qantas applied to the regulator of international routes to replace Qantas with Jetstar aircraft—in other words, a fully owned subsidiary. So maybe this has been Qantas's plan all along—to offshore and have Jetstar involved in these international routes.

I think it is also important to put into perspective that other airlines have done remarkably well. Air New Zealand's going gang busters. They announced a record profit just yesterday. They have really turned the corner. They are an airline that are not at war with their workforce. They work well with their workforce, and they announced a profit of NZ$260 million. That is a very significant profit, and that airline's projections are incredibly positive.

We need to know what material and confidential briefings were given to institutional investors by Qantas and what information was excluded from the many tens of thousands of mum-and-dad investors. That is something that Senator Williams, who is in the chamber, has been a passionate advocate for—corporate accountability. He played a driving role in the ASIC inquiry, and I know this is something he has a particular interest in.

Let us put remuneration in perspective. Since Alan Joyce took over Qantas he has earned $22.2 million while the share price has fallen 40 per cent. His pay packet of $5.1 million in the last year we know of, 2012-13, was the combined pay packet, virtually, of Singapore airlines, Cathay Pacific and Air New Zealand, yet the Qantas share price has gone down 40 per cent since he became its CEO.

This is a serious issue: 5,000 Australians will lose their jobs. Qantas is a national icon. It is our national flag carrier. I feel we have more bad news to come. What Alan Joyce has said cannot be believed. In my view, he is to Qantas what Caligula was to the Roman Empire. He is a person who has been part of the demise of a great Australian carrier. Notwithstanding that, Qantas still has outstanding individuals working for it—pilots, flight attendants and those on the ground. I pay my respects to them and I am sorry that they have to put up with such a shocking and appalling management.