Qantas Airways Limited (ASX: QAN) shares had a strong session on Friday.
On the day of its annual general meeting, the airline operator's shares rose 2% to $5.18.
Why did Qantas shares ascend today?
It seems that investors are in a forgiving mood after Qantas executives apologised for their failings over the last 12 months.
At the meeting, outgoing chair, Richard Goyder, said:
Looking back at my comments at last year's AGM, I acknowledged that our post-COVID return to flying was a lot more challenging than expected, and that we had let customers down. At that time, our team was working hard to fix the fundamentals – like punctuality and cancellations – which have now materially improved. And our safety performance – which comes above all else – remains strong.
But it's clear there has been a substantial loss of trust in the national carrier. And we understand why. There are things we got wrong. Things we should have handled better. Things we should have fixed, faster. And for all of those, we apologise.
Ahead of the meeting, Qantas acknowledged that it would almost certainly receive a first strike at the annual general meeting based on early voting and recommendations by proxy advisors. Goyder said:
It's clear that there will be an overwhelming vote against our remuneration report, which is almost a complete reversal of the 90-plus per cent support in recent years. But please know this: we hear the message this strong vote sends, particularly in response to broader frustration with past events, and it galvanises our efforts to restore your confidence.
If shareholders vote down its remuneration report again next year, it will bring about a board spill vote.
So, it's fair to say that Qantas' board will be working overtime to ensure that shareholders are feeling a lot happier with their actions next year.
Qantas share price performance
Goyder also addressed the recent underperformance of the Qantas share price. He said:
We acknowledge the substantial fall in the Qantas share price since July – albeit we've seen an uptick this week. It's important to also look at the global context and some of the factors that have been weighing on our stock. Globally, airlines shares have fallen between 20 and 30 per cent over recent months as oil prices have risen to recent highs.
I'm very confident that Vanessa [Hudson] and her new management team are focused on delivering for all stakeholders, including shareholders, and the fundamentals of this business will be better reflected in the share price.
Incidentally, Goldman Sachs currently has a buy rating and a $8.25 price target. This implies a potential upside of approximately 60% over the next 12 months.
If Qantas shares were to rise to this level by next year's AGM, I suspect the mood in the room would be very different next time! But time will tell if that is the case.