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Qantas: Apology, clawback and customer service investment

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Qantas: Apology, clawback and customer service investment
In an extraordinary few days for Qantas, the airline’s CEO has issued an apology to customers, the board has flagged potential clawbacks of performance bonuses and a further $80 million investment in customer service has been announced.

Amidst a breach of industrial law, a federal court case brought against the carrier by the Australian Competition and Consumer Commission (ACCC) and a class action over COVID travel credits, new Qantas CEO Vanessa Hudson apologised to customers on Friday via a video message.

“I know that we have let you down in many ways and for that I am sorry,” she said.

“We haven’t delivered the way we should have and we’ve often been hard to deal with. We understand why you’re frustrated and why some of you have lost trust in us.

“I want you to know that we’re determined to fix it, to improve the experience for you and to support our people better. We want to get back to the national carrier that Australians can be proud of, that’s known for going above and beyond.

“We understand we need to earn your trust back, not with what we say, but what we do and how we behave. This is going to take time and I ask for your patience. The work is already underway.

“This has been a humbling period but through it, I share the pride and passion that I know our people have for Qantas and this gives me the confidence that we will rebuild your trust,” said Hudson.

Many of the more than 1,100 comments on the video evidence both the previous good standing of the airline and the high levels of dissatisfaction amongst Qantas customers at the moment.

On Wednesday last week, coinciding with the release of its annual report, the airline issued comments from the chairman of the Qantas board, Richard Goyder, highlighting how Qantas has cut short term performance bonuses for its executive staff by 20 per cent “in recognition of the customer and brand impact of cumulative events” and withheld all short term bonuses until the ACCC court case is resolved.

Relating to previous Qantas CEO Alan Joyce, who departed the airline abruptly in early September, months ahead of his scheduled retirement in November, Goyder said the board had the ability to “clawback” more than two thirds of his performance related bonuses.

“In the case of Alan Joyce’s remuneration for FY23, in addition to $2.2 million in short term bonuses that have been withheld, a further $8.3 million of a total adjusted $21.4 million is subject to clawback should the Board determine that necessary,” said Goyder.

“When combined with additional long-term incentives already granted, a total of $14.4 million is subject to malus and clawback if considered necessary.”

Today, the airline announced an additional $80 million will be used to help address key areas of customer dissatisfaction, including better contact centre resourcing and training, making more seats available to be used by customers booking flights with Frequent Flyer points and improving in-flight meals.

As part of today’s market update, Qantas also flagged a significant increase in fuel costs – around $200 million over the first six months of this financial year – but said it would not pass on the fuel costs to customers through higher fares for now.

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