Qantas CFO hits out at critics

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Qantas’s chief financial officer Gareth Evans has strongly defended the airline’s domestic and pan-Asia strategies, and denied that it is after a government bailout.

In a statement, Evans hit out at “armchair experts” that have called for the airline to abandon its strategy of targeting a 65% market share in the domestic market, which he says strengthens the airline’s competitive position and gives it the best reach into the regional market.

“Stepping back from the 65 per cent would effectively be waving the white flag, not to mention abandoning our role in regional Australia and betraying the loyalty of our frequent flyers,” he says.

Evans also denied that the airline is seeking a bailout from the Australian government, and instead reiterated that “action is needed to level what all sides of politics agree is a distorted playing field.”

The airline has claimed that rival Virgin Australia has unfairly benefited from its ability to raise capital from foreign shareholders with few restrictions, while Qantas has a 49% foreign investment cap.

Evans also levelled criticism at some parties, such as some unions representing Qantas employees, that have called for budget unit Jetstar to pull back its expansion in Asia.

“Many Australian businesses would love to have Jetstar’s profile in Asia,” he says. “Our total equity investment in these businesses has been less than the outlay on a single A380. That’s far less than the inflated figures tossed around by those who would rather scapegoat Jetstar – the same people who seize on any setback experienced by these start-up ventures as the ‘real issue’ facing Qantas.”

The criticisms have come after Qantas warned last year that it could lose up to A$300 million ($263 million) for the six months to 31 December 2013, prompting it to announce a review of capital spending and asset sales. It will also make 1,000 staff redundant.

Qantas will announce the outcome of its review in February.