The Qantas Airways Limited (ASX: QAN) share price has been creaking on Thursday amid mounting pressure against the company and its board.
In today's trade, the market was laying into Qantas shares for the eighth consecutive trading session, dropping 2.63% to $5.55 apiece at the close. The persisting pressure means Australia's most recognisable airline is now touting its lowest share price in almost 11 months.
Let's take a look at why the airline company is experiencing turbulence.
Golden handshake not a vibe with shareholders
On 24 July, the country's largest airline posted a record $2.47 billion underlying profit. Yet, the Qantas share price has been in freefall since then. What was initially impressive now feeds the flame of condemnation as the heat from allegations and distrust rise.
It's been an eventful few weeks for the Flying Kangaroo. You'd be forgiven for not being able to keep up with the bombardment of developments, so here's a quick refresher:
- 21 August: Qantas faces a class action lawsuit regarding the handling of cancelled flights due to COVID-19 travel restrictions
- 29 August: Alan Joyce, now former Qantas CEO, faced a senate enquiry amid the company's record profits and lack of competition
- 30 August: Corporate protectionism brought into question during enquiry
- 31 August: The Australian Competition and Consumer Commission (ACCC) launches legal action against Qantas for allegedly selling tickets to already cancelled flights
- 5 September: Alan Joyce brings forward his retirement by two months, exiting the role of CEO
Although Joyce has now waved goodbye, the valuable luggage is still en route. The controversial former chief is expected to receive up to $24 million upon his final departure — a hefty golden handshake.
However, Australian Shareholders' Association chief executive Rachel Waterhouse insists Joyce's bonuses should be reassessed if Qantas is found to be at fault. Elaborating on this, Waterhouse said:
The issue here is what did the board know when they approved the sale of those $17 to $18 million [of awarded shares to Alan Joyce], and were they aware of the ACCC investigation? If so, that is absolutely not appropriate.
Furthermore, Waterhouse notes that the board may need to rethink remuneration if the company is to restore trust among the public and Qantas' shareholders.
Scrutiny could clip wings on Qantas share price
The government could overturn its decision to block additional flights offered by Qatar Airways as it faces greater pressure from the public and those within the travel industry. A campaign led by Flight Centre Travel Group Ltd (ASX: FLT) is just one example.
Industry groups are reportedly pushing for a deeper look into competition among Australian airlines. If they have their way, it could mean more ramifications on the table for Qantas. In addition, a push to increase competition would likely mean lower airfares for the flag carrier.
Either way, the near-term is clouded in uncertainty for the Qantas share price.
