Annual Report 2024
Financial and Operational Highlights
02
Five-Year History
03
Chair’s Message
04
CEO’s Message
06
Board of Directors
08
Review of Operations
11
Condensed Corporate Governance Statement
24
Directors’ Report
27
Financial Report
65
Shareholder Information
139
Financial Calendar and Additional Information
140
Disclaimer
This Report contains summary information about Qantas Airways Limited and its related bodies corporate (Qantas Group) and their activities for the 12-month period ended
30 June 2024, unless otherwise stated.
This Report contains forward-looking statements and statements of opinion. The forward-looking information in this Report is based on management’s expectations and
reflects judgement, assumptions, estimates and other information available as at the date of this Report and/or the date of Qantas’ planning or scenario analysis processes.
There are inherent limitations in scenario analysis and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis relies on assumptions that
may or may not be, or prove to be, correct and may or may not eventuate, and scenarios may be impacted by additional factors to the assumptions disclosed. Scenarios do
not constitute definitive outcomes or probabilities. Due to the inherent uncertainties and limitations associated with measuring greenhouse gas emissions data, and around
possible policy, market and technological developments, references to the forward-looking information in this Report are estimates only, and readers should not place undue
reliance on such information.
No representation or warranty is made regarding the accuracy, completeness or reliability of the forward-looking statements or opinions contained in this Report, or the
assumptions on which either is based. All such information, by its nature, involves significant known and unknown risks, uncertainties and other factors, many of which outside
of the control of Qantas, and actual results, circumstances and developments may differ materially from those expressed or implied in this Report. Except as required by
applicable laws or regulations, Qantas does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events.
To the maximum extent permitted by law, Qantas and its officers do not accept any liability for any loss arising from the use of the information contained in this Report.
Qantas Annual Report 2024
Contents
$2.08 billion
Underlying Profit Before Tax
$1.25 billion
Statutory Profit After Tax
Up to $400 million
Additional Shareholder Distributions
$230 million
Additional Customer Investment in FY24
On-Time Performance1
+10pts
+8.8pts
Qantas
Jetstar
Customer Net Promoter Score2
+22pts
+19pts
Qantas
Jetstar
Qantas Annual Report 2024
Financial and Operational Highlights
1 Percentage of domestic flights that departed on time in 4Q24 compared to 2Q24.
2 Domestic and International Net Promoter Scores 4Q24 compared to 2Q24.
02
FINANCIAL PERFORMANCE1
2024
2023
2022
20212
2020
Revenue and other income
$M
21,939
19,815
9,108
5,934
14,257
Statutory Profit/(Loss) Before Tax
$M
1,884
2,472
(1,191)
(2,299)
(2,708)
Statutory Profit/(Loss) After Tax
$M
1,251
1,744
(860)
(1,692)
(1,964)
Underlying Profit/(Loss) Before Tax
$M
2,078
2,465
(1,859)
(1,774)
124
Underlying Earnings/(Loss) Before Interest
and Tax (EBIT)
$M
2,279
2,682
(1,558)
(1,473)
395
Operating Margin
%
10.4
13.5
(17.1)
(24.8)
2.8
Statutory Earnings Per Share
cents
75.9
96.0
(45.6)
(89.9)
(129.6)
Return on Invested Capital (ROIC)
%
57.9
103.6
(31.6)
(21.4)
5.8
Share price at 30 June
$
5.85
6.20
4.47
4.66
3.78
Dividend per share3
cents
–
–
–
–
–
Cash flow from operations
$M
3,441
5,085
2,670
(386)
1,083
Net Free Cash Flow1
$M
554
2,460
2,430
(1,108)
(488)
Net on balance sheet debt
$M
3,311
1,998
2,617
4,609
3,173
Net Debt
$M
4,106
2,885
3,937
5,890
4,734
Net capital expenditure
$M
3,148
2,666
398
693
1,571
Shareholder distributions3
$M
869
1,000
–
–
647
Unit Revenue (RASK)
c/ASK
11.20
12.29
9.48
9.72
8.99
Total unit cost4
c/ASK
(9.73)
(10.19)
(13.16)
(15.76)
(8.87)
Ex-fuel unit cost4
c/ASK
(5.97)
(6.30)
(9.64)
(12.67)
(6.22)
STATISTICS
2024
2023
2022
2021
2020
Available Seat Kilometres (ASK)
M
141,357
117,258
50,633
29,374
111,870
Revenue Passenger Kilometres (RPK)
M
116,895
97,693
34,363
18,557
92,027
Passengers carried
’000
51,798
45,725
21,257
15,866
40,475
Seat Factor
%
82.7
83.3
67.9
63.2
82.3
Aircraft at end of period
347
336
322
315
314
1 Refer to the Review of Operations on pages 11 to 23 for definitions and explanations of non-statutory measures.
2 2021 has been restated for the impact of the adoption of the IFRIC agenda decision in relation to cloud computing.
3 Dividend per share is reported as the interim and final dividend in relation to the relevant financial year. Shareholder distributions includes dividends paid and
share buy-backs and are reported in the year the equity distribution is recognised.
4 Total unit cost is net expenditure (Underlying PBT excluding ticketed passenger revenue) per ASK. Ex-fuel unit cost is net expenditure excluding fuel, share of
profit/(loss) of investments accounted for under the equity method and discount rate changes on provisions, per ASK.
Qantas Annual Report 2024
Five-Year History
03
This time last year, I assured
shareholders that we were acutely
aware of the need to rebuild
confidence in Qantas after the
Group fell short in important areas
of our business.
We immediately moved to introduce changes to
reset relationships with our stakeholders, particularly
customers and employees, and improve our
operational performance.
While there is much work still to be done, 12 months
later I am pleased to report that we have seen
material improvement in our operational reliability
and customer satisfaction.
Delivering for all stakeholders
Over the course of the year, the Group has made a series
of investments in customer experience, our loyalty
program, and our operations to ensure we consistently
deliver the level of service our customers expect from
the national carrier.
These initiatives have resulted in customer satisfaction
improving for both Qantas and Jetstar.
Along with continued demand for travel, this helped
the Group deliver a strong financial result, with an
Underlying Profit Before Tax of $2.08 billion and a
Statutory Profit After Tax of $1.25 billion.
The Qantas Group’s 2023/24 financial performance also
demonstrates the strength of the Group’s integrated
portfolio, including our dual-brand airline strategy and
Frequent Flyer program.
We know that continuing to generate sustainable profits
remains central to our ability to invest in our people,
our customers and our new fleet at the same time as
delivering returns to our shareholders.
Accountability
In October 2023 the Qantas Board commenced a
process of independently reviewing key governance
matters over the previous 12 months. The review
considered the decision-making and governance
processes that led to loss of trust amongst stakeholders
and, in August this year, we shared the findings.
While the review revealed no findings of deliberate
wrongdoing, it confirmed that mistakes were made
by the Board and Management that contributed to
the Group’s significant reputational and customer
service issues.
The Board and Management team are committed
to implementing the 32 recommendations of the
review in full, and many of these are underway or
already completed.
This includes making changes so that the Board
receives more detailed reporting on customer metrics,
employee engagement and key stakeholder relations.
We have also strengthened Board consultation and
approval required for involvement in significant
stakeholder and community issues.
Informed by these findings, the impact of the Australian
Competition and Consumer Commission legal
proceedings and the High Court finding in relation to
breaches of the Fair Work Act when Qantas outsourced
ground handling work, the Board applied its discretion
to reduce relevant bonuses for current and former
Executives. Details of this and further changes to the
Executive Remuneration Framework are outlined in our
Remuneration Report on page 32.
Qantas Annual Report 2024
Chair’s Message
04
Renewal
The past year has seen an accelerated pace of renewal
at both the Board and Senior Management level.
New CEO Vanessa Hudson has brought to the role a
thoughtful, open-minded approach and is resetting
the leadership culture of the business. I am confident
that she has the right experience, personal qualities
and vision to lead the Group through its next
exciting chapter.
Supporting her is a largely refreshed leadership team,
with a mix of external and internal talent appointed to
lead key business units.
Maxine Brenner and Jacqueline Hey retired from the
Board in February 2024, and I thank them for their
dedication after serving as directors for more than
a decade. Experienced company director Dr Nora
Scheinkestel joined the Board in March and assumed the
role of Chair of the Remuneration Committee.
After six years in the role, I will also complete my tenure
as Chair of Qantas in September 2024. I would like to
thank my fellow Board members, past and present, for
their support and friendship.
Having worked with Chair-Elect John Mullen over recent
months, I know he is an exceptional leader who is deeply
motivated to restore Qantas to its rightful place as the
trusted national carrier. I wish him calm skies and all
the best for the period ahead. Both John and Nora’s
appointments are subject to shareholder approval at
the AGM.
It has been a privilege to lead the Group over this period.
Despite the unprecedented challenges of the past four
years, the airline’s foundations are strong and its future
remains bright.
On the horizon
While there will be challenges ahead, I firmly believe that
Qantas is putting the right pieces in place to succeed for
the long term.
With two world-class brands in Qantas and Jetstar, an
airline loyalty scheme that is second-to-none, a growing
freight business, a strong balance sheet, a passionate
workforce, and a pipeline of investment that will
ultimately change the way Australians connect with each
other and the world, the foundations are strong.
I look forward to watching the Group deliver for
customers, employees, shareholders and the wider
community for decades to come.
Richard Goyder AO
Qantas Annual Report 2024
Chair’s Message continued
05
During the 2023/24 financial year,
Qantas has focused on getting
the balance right between
delivering for customers,
employees and shareholders.
The Annual Report 2024 reflects how far we have come
in the past 12 months with the Group achieving many
of its targets, helping build a better, stronger Qantas.
However, we all know there is more to do.
Investing in our customers and our operations
Last year, we invested an additional $230 million in the
customer experience; lifting on-time performance, fixing
customer pain points, rewarding loyalty and ensuring
that we became an easier airline to deal with.
This included improving our digital experience and the
way we manage customer recovery during disruptions.
We also revamped our onboard food and beverage
offering and invested in one of the biggest expansions of
our Frequent Flyer program in 35 years with the launch
of Classic Plus.
We have focused heavily on improving our on-time
performance, with punctuality lifting significantly at
both Qantas and Jetstar. Qantas’ on-time performance
was particularly strong in the fourth quarter, nearing
long-term averages with 80 per cent of flights departing
on time, while 74 per cent of Jetstar flights departed
on time.
Combined with our significantly improved operational
performance, our Net Promoter Score increased by 22
points for Qantas and 19 points for Jetstar.
These improvements underpin strong financial
performance and enabled us to continue to return
capital to shareholders.
Investing in our fleet
Generating ongoing strong financial results is central to
the Group’s ability to reinvest in our fleet, deliver a better
flying experience, and create more opportunities for
our people.
Last year, we took delivery of eight new passenger
aircraft, including the Group’s first Airbus A220. This
aircraft is around 25 per cent more fuel efficient per seat
and 50 per cent quieter than the aircraft it replaces. It is
also a step up in passenger comfort and that has been
reflected in the response from customers.
Our fleet renewal program accelerates this year, with 20
new passenger aircraft set to be delivered across the
Group, including the first Qantas A321XLR.
Investing in our people
Our frontline workforce has been central to coming up
with – and then implementing – many of the customer
initiatives we have introduced. They are core to our
success, and I thank them for their dedication and
support of our customers and each other, often in
difficult circumstances.
Across the Group, we have seen extraordinary efforts
from our people. From everyday interactions with
our customers to the teams who stepped up to help
fly Australians out of Israel following the events of
7 October, the dedication and commitment of our
workforce has come to the fore.
Our people are our greatest asset and we will continue
to invest in them, including through recruitment
and training. Over the past 12 months, as our flying
increased, we welcomed another 2,000 employees,
and we will see 6,000 frontline employees participate
in leadership development programs across the
coming year.
Qantas Annual Report 2024
CEO’s Message
06
Continuous improvement
Last year we flew more than 50 million passengers for
the first time since the pandemic, and we are adding
more destinations to our network. This includes our non-
stop Perth-Paris flights, which continue to build on the
success of our London and Rome services.
The demand for these flights continues to give us
confidence in our ultra long-haul strategy to make Perth
our western gateway, and for Project Sunrise as our
A350s arrive from mid-2026.
These are both great examples of the opportunities that
lie ahead for the Group as we continue to invest in our
people, fleet and customers.
Finally, I would like to thank Qantas Group Chair Richard
Goyder for his contribution to the business over the
past six years. He was instrumental in guiding the Group
through one of its darkest periods, and we’re fortunate
to have had someone of his experience at the helm. On
behalf the entire Group, I wish him and his family all the
best for the future.
Our people are our
greatest asset and we
will continue to invest
in them, including
through recruitment
and training.
Vanessa Hudson
Qantas Annual Report 2024
CEO’s Message continued
07
Richard Goyder AO
BCom, FAICD
Independent Non-Executive
Director and Chair
Age: 64
Richard Goyder was appointed to the
Qantas Board in November 2017 and
as Chair in October 2018.
He is Chair of the
Nominations Committee.
Mr Goyder is Chair of Woodside
Energy Group Ltd, the Australian
Football League Commission, the
West Australian Symphony Orchestra,
and of the Channel 7 Telethon Trust.
He is an honorary Member of the
Business Council of Australia, and a
Fellow of the AICD.
Mr Goyder was the Managing Director
and CEO of Wesfarmers Limited from
July 2005 to November 2017. He also
previously held the roles of Finance
Director between 2002 and 2004, and
Deputy Managing Director and CFO
between 2004 and 2005.
Mr Goyder was also formerly Chair of
the Australian B20 (the key business
advisory body to the World Economic
Forum which includes business
leaders from all G20 economies) and
JDRF Australia.
Mr Goyder will retire as a Director
and Chair of the Board, effective 16
September 2024.
Vanessa Hudson
BBus, CA
Qantas Group Chief Executive
Officer and Managing Director
Age: 54
Vanessa Hudson was appointed
as Qantas Group Chief Executive
Officer and Managing Director on 6
September 2023.
She is a Member of the Safety, Health,
Environment and Security Committee.
Ms Hudson is also a Director of a
number of controlled entities of the
Qantas Group.
Ms Hudson was previously Group
Chief Financial Officer for four years,
including through the pandemic and
the airline’s recovery.
She served as Qantas' Chief Customer
Officer, with responsibilities
spanning all aspects of the customer
experience and strategy.
Joining Qantas in 1994, she has
held a variety of senior commercial,
customer and finance roles across
the Group, in Australia and overseas,
including Executive Manager of
Sales and Distribution, Senior Vice
President for Qantas across the
Americas and New Zealand, Executive
Manager of Commercial Planning and
Executive Manager for Product and
Service. In these various roles, her
responsibilities ranged from sales
channels, revenue management and
network planning, to transformation in
catering, airports and network.
Ms Hudson has a Bachelor of
Business and was admitted as a
Member of the Institute of Chartered
Accountants in 1994.
John Mullen
BSc
Independent Non-Executive
Director and Chair-Elect
Age: 69
John Mullen was appointed to the
Qantas Board in April 2024.
He is a Member of the Safety, Health,
Environment and Security Committee.
Mr Mullen is currently Chair
of Brambles Ltd. and Treasury
Wine Estates.
Previously, Mr Mullen was Chair of
Telstra Group Ltd and Chair of Toll
Holdings.
Mr Mullen has extensive experience
in international transportation and
logistics, with more than two decades
in senior positions with some of
the world’s largest transport and
infrastructure companies. From
2011 to 2016, he was Chief Executive
Officer of Asciano, Australia’s largest
ports and rail operator and prior to
this, Mr Mullen spent 15 years with
DHL Express, serving as the global
Chief Executive Officer from 2005
to 2009.
Prior to DHL, Mr Mullen spent 10
years with the TNT Group, with four
years as the Chief Executive Officer
of TNT Express Worldwide based in
the Netherlands.
Former appointments also include
the US National Foreign Trade Council
in Washington (2008–2010), and
Member of the UNICEF Task Force on
Workplace Gender Discrimination and
Harassment (2018–2019).
Mr Mullen will become Chair of
the Qantas Board, following Mr
Goyder’s retirement, effective 16
September 2024.
Qantas Annual Report 2024
Board of Directors
08
Belinda Hutchinson AC
BEc, FCA, FAICD
Independent Non-Executive
Director
Age: 71
Belinda Hutchinson was appointed to
the Qantas Board in April 2018.
She is Chair of the Audit Committee,
a Member of the Nominations
Committee and a Member of the
Safety, Health, Environment and
Security Committee.
Ms Hutchinson is currently a Non-
Executive Director of Thales Australia.
Ms Hutchinson was also Chancellor
of the University of Sydney from
February 2013 until June 2024 and
Chair of the Future Generation Global
Investment Company between May
2015 and June 2021.
She has over 30 years’ experience
in the financial services sector,
working in senior roles at Citibank and
Macquarie Group. Ms Hutchinson also
has extensive board experience. She
was formerly Chair of QBE Insurance
Limited, a Director of Telstra
Corporation Limited, Coles Group
Limited, Crane Group Limited, Energy
Australia Limited, TAB Limited, Snowy
Hydro Trading Limited, Sydney Water
and AGL Energy.
Ms Hutchinson was awarded a
Companion of the Order of Australia
(AC) in 2020 in recognition of her
service to business, tertiary education
and scientific research, and for her
philanthropic endeavours to address
social disadvantage.
Doug Parker
BEc, MBA
Independent Non-Executive
Director
Age: 62
Doug Parker was appointed to the
Qantas Board in May 2023.
He is a Member of the Remuneration
Committee and a Member of the
Safety, Health, Environment and
Security Committee.
Mr Parker was CEO of American
Airlines from 2013 to March 2022, and
Chair of the Board until April 2023.
Previously, Mr Parker was Chair and
CEO of US Airways. He has served as
Chair, President and CEO of America
West Airlines prior to the merger
of US Airways and America West
in 2005.
Mr Parker was also previously Vice
President, Assistant Treasurer and
Vice President of Financial Planning
and Analysis for Northwest Airlines.
From 1986 to 1991, he held several
financial management positions with
American Airlines.
He is a Member of the Vanderbilt
University Board of Trust, the SMU
Cox School of Business Executive
Board, and the Medal of Honour
Museum Foundation Board
of Directors.
Mr Parker earned a Bachelor of Arts
in Economics from Albion College
in 1984 and a Master of Business
Administration from Vanderbilt
University in 1986.
Todd Sampson
MBA, BA (Hons)
Independent Non-Executive
Director
Age: 54
Todd Sampson was appointed to the
Qantas Board in February 2015.
He is a Member of the Remuneration
Committee and a Member of the
Audit Committee.
Mr Sampson was Executive Chair
of the Leo Burnett Group from
September 2015 to January 2017, and
National Chief Executive Officer from
2008 to 2015. He was also a Director
of Fairfax Media Limited from 2014
to 2018.
Mr Sampson has over 20 years’
experience across marketing,
communication, new media and
digital transformation. He has held
senior leadership and strategy
roles for a number of leading
communication companies in
Australia and overseas, including
as Managing Partner for D’Arcy,
Strategy Director for The Campaign
Palace and Head of Strategy for DDB
Needham Worldwide.
Qantas Annual Report 2024
Board of Directors continued
09
Dr Heather Smith PSM
BEc (Hons), PhD, FAIIA
Independent Non-Executive
Director
Age: 59
Dr Heather Smith was appointed to
the Qantas Board in August 2023.
She is a Member of the Remuneration
Committee and a Member of the
Audit Committee.
Dr Smith is a Non-Executive Director
of ASX Limited and Challenger
Limited. She is also a Fellow and
National President of the Australian
Institute of International Affairs.
Dr Smith has extensive experience
in public policy, innovation and
technological change, national
security and economic reform and a
deep knowledge of government and
the public sector.
She has close to 20 years' experience
working in the Australian Public
Service at senior levels, culminating
in being Secretary of the Department
of Industry, Innovation and Science
from 2017 to 2020. She has also
previously served as Secretary of the
Department of Communications and
the Arts. Dr Smith has also held senior
positions in the departments of Prime
Minister and Cabinet, Foreign Affairs
and Trade, and the Treasury, as well
as the Office of National Intelligence.
Dr Smith began her career at the
Reserve Bank of Australia.
Dr Smith has a PhD in Economics from
the Australian National University
(ANU), and was formerly a Professor
at the ANU National Security
College. She is also an independent
director of the Reef Restoration and
Adaptation Program.
Antony Tyler
BA (Jurisprudence)
Independent Non-Executive
Director
Age: 69
Antony Tyler was appointed to the
Qantas Board in October 2018.
He is Chair of the Safety, Health,
Environment and Security
Committee, and a Member of the
Nominations Committee.
Mr Tyler was Director General and
Chief Executive of the International
Air Transport Association from 2011 to
2016. Prior to this, Mr Tyler spent over
30 years with Cathay Pacific Airways
Limited. His career includes several
management and Executive roles
in Hong Kong, the UK, Italy, Japan,
Canada, the Philippines and Australia
before serving in the role of Chief
Executive Officer from 2007 to 2011.
He is a Non-Executive Director
of Bombardier Inc, BOC Aviation
Limited and Trans Maldivian Airways
Limited and a Fellow of the Royal
Aeronautical Society.
Dr Nora Scheinkestel
LLB (Hons), PhD, FAICD
Independent Non-Executive
Director
Age: 64
Dr Nora Scheinkestel was appointed
to the Qantas Board in March 2024.
She is Chair of the Remuneration
Committee and Member of the
Audit Committee. Dr Scheinkestel is
currently a Non-Executive Director
of Brambles, Westpac Banking
Corporation and Origin Energy.
She is an experienced company
director with 30 years’ experience as
a Non-Executive Chair and Director
of companies in a wide range of
industry sectors, including the public,
government and private sectors.
Previous directorships of publicly
listed companies include Telstra
Corporation Limited (2010–2022),
the Atlas Arteria Group (2014–2020),
which she chaired, Ausnet Services
Ltd (2016–2022), Orica Limited,
Newcrest Limited, Pacific Brands
Limited and Stockland Group.
She is a published author, has
worked as an Associate Professor in
the Melbourne Business School at
Melbourne University and is a former
Member of the Takeovers Panel.
Dr Scheinkestel was awarded a
centenary medal for services to
Australian society in business
leadership. She holds a Doctor
of Philosophy and a Bachelor of
Law (Hons) from the University
of Melbourne and is a Fellow
of the Australian Institute of
Company Directors.
Qantas Annual Report 2024
Board of Directors continued
10
RESULTS HIGHLIGHTS
Underlying Profit Before Tax
Statutory Profit After Tax
Statutory Earnings Per Share
2,078
$M
1,251
$M
75.9
cents
2,078
2,465
(1,859)
(1,774)
124
FY24 2,078
FY23 2,465
FY22 (1,859)
FY21
(1,774)
FY20 124
1,251
1,744
(860)
(1,692)
(1,964)
FY24 1,251
FY23 1,744
FY22 (860)
FY21
(1,692)
FY20 (1,964)
75.9
96.0
(45.6)
(89.9)
(129.6)
FY24 75.9
FY23 96.0
FY22 (45.6)
FY21
(89.9)
FY20 (129.6)
The Qantas Group (referred to as the Qantas Group or the Group) reported Underlying Profit Before Tax1 (Underlying PBT) of
$2,078 million for financial year 2023/24, a $387 million reduction compared to financial year 2022/23. The Group’s
Statutory Profit Before Tax was $1,884 million, a reduction of $588 million compared to financial year 2022/23. Statutory
Profit After Tax was $1,251 million and included the impact of the ACCC2 settlement and associated costs, the additional
provision in relation to the ground handling outsourcing Federal Court case and Perth Airport related asset disposals that
were not included in Underlying PBT.
Other key financial metrics:
– Statutory Earnings Per Share of 75.9 cents per share
– Group operating margin3 of 10 per cent
– Operating cash flow of $3,441 million
– Net capital expenditure4 of $3,148 million
The result included the continued restoration of international flying capacity, with total Group ASKs5 at 93 per cent of pre-
COVID levels for financial year 2023/24, an increase of 21 per cent compared to financial year 2022/23.
Ongoing strength in travel demand supported performance with Group Domestic EBIT of $1,361 million and Group
International Underlying EBIT of $755 million. Qantas Loyalty maintained its positive momentum, achieving $511 million
Underlying EBIT and included the impact of customer investment in Classic Plus Flight Rewards (Classic Plus), a new flight
rewards product. Freight performance was challenged in the first half of 2023/24, as yields moderated with performance
improved in the second half.
Group Unit Revenue6 fell 9 per cent, predominantly driven by Group International, with ongoing moderation in yields as
market capacity returned. Unit cost excluding fuel7 fell 6 per cent due to the benefits of returning capacity and the removal
of temporary costs from financial year 2022/23 offset by incremental customer investment.
The Group’s fleet renewal program continued with the delivery of 16 aircraft, including five new A321LRs, one new 787-9, two
new A220-300s, three mid-life A319-100s, three mid-life A321-200 freighters and two mid-life A320-200s. In addition, the
Group added two A330s and eight E190s through wet-lease arrangements with Finnair and Alliance Airlines. With 13 next-
generation A321LRs now in the fleet, Jetstar is seeing fuel and scale efficiencies, reduced emissions and increased customer
and employee sentiment from this new technology. Alongside the growth in new aircraft deliveries, the Group has delivered
significant upgrades to enhance the customer flying experience, including improvements to food and beverage offerings on
Qantas and the launch of Apple Pay on Jetstar. The Group has also announced plans for a cabin refresh and the rollout of Wi-
Fi for select Qantas international fleet which is expected to launch by the end of the first half of financial year 2024/25.
For Group Domestic operations, the dual brand strategy continued to be core to the Group’s strategic proposition, with
leading offerings maintained across all key segments of the market. The Group Domestic Underlying EBIT margin8 for the
financial year 2023/24 was 14 per cent. Qantas Domestic delivered an Underlying EBIT of $1,063 million, achieving an EBIT
margin of 15 per cent. Performance was driven by strength in corporate and small and medium-sized enterprises (SME)
markets offset by continued investments in customer and operations, transitional costs related to delays in exit of 717 fleet
and entry into services costs associated with the A220 fleet. These investments in customer and operations have improved
on-time performance and NPS9. Jetstar’s domestic network delivered an Underlying EBIT of $298 million, and an EBIT
margin of 11 per cent. Performance was supported by stable leisure demand and continued strength in ancillary revenue.
Qantas Annual Report 2024
Review of Operations
For the year ended 30 June 2024
11
1
Underlying Profit Before Tax (Underlying PBT) is the primary reporting measure used by the Qantas Group’s Chief Operating Decision-Making bodies (CODM),
being the Chief Executive Officer, Group Leadership Team and the Board of Directors, for the purpose of assessing the performance of the Group. The primary
reporting measure of the Qantas Domestic, Qantas International, Jetstar Group and Qantas Loyalty operating segments is Underlying Earnings Before Net
Finance Costs and Income Tax Expense (Underlying EBIT). The primary reporting measure of the corporate segment is Underlying PBT as net finance costs are
managed centrally. Refer to the reconciliation of Underlying PBT to Statutory Profit Before Tax on page 13.
2 Australian Competition and Consumer Commission
3
Operating Margin is Group Underlying EBIT divided by Group total revenue.
4
Net capital expenditure is equal to net investing cash flows in the Consolidated Cash Flow Statement and the impact to Invested Capital from the disposals/
acquisitions of leased aircraft.
5
Available Seat Kilometres – total number of seats available for passengers, multiplied by the number of kilometres flown.
6
Unit Revenue (RASK) is calculated as ticketed passenger revenue divided by Available Seat Kilometres (ASK).
7
Underlying PBT less ticketed passenger revenue and fuel per ASK.
8
Underlying EBIT divided by Total Revenue, also referred to as operating margin.
9 Net Promoter Score. Customer advocacy measure.
RESULTS HIGHLIGHTS (CONTINUED)
The Group’s international airline operations performed well despite unit revenue moderating with the restoration of
capacity. Qantas International (including Freight) reported an Underlying EBIT of $556 million. The network continued to
evolve with the commencement of new routes such as Sydney to New York (via Auckland) and increased deployment of ultra
long-haul point-to-point services. The consistent delivery of revenue premium from Perth to London and Perth to Rome
supported confidence for Project Sunrise, with the first delivery of the A350-1000 ULR aircraft expected from mid 2026.
Jetstar’s international network reported an Underlying EBIT of $199 million with a strong increase in profitability driven by
ongoing leisure demand strength and the launch of routes, including Sydney to Osaka and Brisbane to Seoul. Unit revenue in
Group International decreased by 11 per cent compared to financial year 2022/23, which included the impact of incremental
capacity growth into lower unit revenue markets and lower premium mix on aircraft returning to service. The Group
International (including Freight) operating margin for financial year 2023/24 was 7 per cent.
Qantas Loyalty continued its strong performance, delivering an Underlying EBIT of $511 million with 202 billion points earned
and 171 billion points redeemed.10 The result demonstrates the program’s unrivalled proposition, with the strength of the
program reflected by a 14 per cent growth in active members, with 46 per cent of members engaging with the program
through two or more products. Cash performance was maintained at strong levels, with over $2 billion in gross cash receipts
in financial year 2023/24. Drivers include strong growth across financial services products and diversified portfolio
earnings, with the launch of the new Classic Plus expected to drive further acceleration of the Qantas Loyalty earn and burn
flywheel11.
The Group’s Financial Framework remained core to the Group’s strategy, driving sustainable financial strength to support
investment and shareholder returns whilst maintaining flexibility to deal with changes in external factors. As at 30 June
2024, Net Debt12 under the Financial Framework was $4.1 billion, within the lower half of the Group’s target range of $3.9
billion to $4.9 billion for financial year 2023/24. Management have reviewed the settings of the Financial Framework and
confirmed that they continue to be appropriate.
During financial year 2023/24, the Group completed $869 million of the $900 million on-market share buy-back announced
in financial year 2023/24 at an average price of $5.57 per share. The remaining $31 million has been completed in the first
half of financial year 2024/25. In August 2024, the Board resolved to announce an on-market share buy-back of $400 million
to distribute surplus capital given all pillars of the Financial Framework have been met.
The Qantas Group experienced a number of management changes and accelerated the transition to a new CEO in financial
year 2023/24. The new leadership team has prioritised listening to and supporting frontline staff, with the establishment of
Customer Champion Councils to help identify improvement opportunities and refreshed policies and toolkits to empower
frontline employees to recover customers during disruption. Support for staff was also provided through the implementation
of roster improvement programs, the launch of development programs for frontline leaders and increased parental leave for
primary and secondary carers.
The new leadership team also accelerated investment in customer initiatives to address customer pain points. These
initiatives aim to provide an exceptional flying experience, seamless digital interactions, faster recovery when things don’t
go to plan and unrivalled rewards for customer loyalty. Investments in operational reliability have resulted in significant
improvements in on-time performance and reduced disruptions. The enhancements to food and beverage offerings,
upgrades to the Qantas App with flight status and baggage tracking and the introduction of Group Boarding have all
contributed to the improvement in NPS in financial year 2023/24.
In August 2024, the Board released the Qantas Governance Review Report. It documented the steps taken by the Board to
scrutinise the decision-making and governance processes that led to the loss of trust amongst stakeholders. The Board and
the management team are committed to implementing actions to address all recommendations, with many actions already
completed or underway. The Group remains focused on re-building trust of all stakeholders and restoring pride in Qantas as
Australia’s national carrier.
In May 2024, the Group announced an agreement with the ACCC to resolve court proceedings in relation to flight
cancellation processes. Under the agreed settlement, Qantas has commenced a projected $20 million remediation program
for impacted passengers and subject to approval of the Federal Court of Australia, will pay a $100 million civil penalty. These
costs, along with associated costs of implementation, were recognised outside of underlying earnings in financial year
2023/24.
In September 2023, the High Court dismissed the Group's appeal from the lower court’s decisions regarding the outsourcing
of Qantas’ ground handling function in 2020. A compensation hearing was held in March 2024, with closing submissions in
May 2024. The decision in relation to this compensation hearing has not yet been handed down. The penalties hearing for
affected ex-employees has not yet been held and will be listed as a later date. A provision is held within the Consolidated
Balance Sheet at 30 June 2024 for the best estimate of these remedies, with an increase in the provision of $70 million since
the half year ended 31 December 2023 recognised outside of underlying earnings in financial year 2023/24.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
12
10
Net points redeemed.
11
Qantas Loyalty performance is a function of points volume earned and redeemed, and member growth.
12
Under the Group’s Financial Framework, includes net on balance sheet debt and capitalised aircraft lease liabilities.
FINANCIAL FRAMEWORK ALIGNED WITH SHAREHOLDER OBJECTIVES
The Group’s Financial Framework aligns objectives with shareholders with the aim of achieving top quartile shareholder
returns by targeting maintainable Earnings Per Share (EPS) growth over the cycle with industry-leading ESG13 credentials.
The Financial Framework is built on three clear priorities and associated long-term targets:
14,15,16,17
1. Maintaining an optimal capital structure
Minimise cost of capital by targeting a Net Debt
range of 2.0x - 2.5x EBITDA where ROIC is 10
per cent
Deliver against Climate Action Plan Targets
2. ROIC > WACC14 through the cycle
Deliver ROIC > 10 per cent15
ESG included in business decisions
3. Disciplined allocation of capital
Grow Invested Capital with disciplined
investment and return surplus capital
Prioritise projects that exceed both ESG and
ROIC targets
MAINTAINABLE EPS GROWTH OVER THE CYCLE
TOTAL SHAREHOLDER RETURNS IN THE TOP QUARTILE
Maintaining an Optimal Capital Structure
The Group’s Financial Framework targets an optimal capital structure to achieve the lowest cost of capital. The range is
based on a Net Debt to EBITDA range of 2.0-2.5 times where Return on Invested Capital (ROIC) is fixed at 10 per cent. This
capital structure optimises the Group’s cost of capital and preserves financial strength with the objective of enhancing
long-term shareholder value. The Group’s optimal capital structure is consistent with investment grade credit metrics and
provides flexibility while protecting the Group’s investment grade Baa2 rating with Moody’s Investor Services.
At 30 June 2024, Net Debt was $4.1 billion, which is in the lower half of the Net Debt Target Range.
Net Debt Profile FY17 to FY24 ($ billion)
4.7
4.7
5.9
3.9
2.9
4.1
Net Debt ($B)
Target range
FY19
FY20
FY21
FY22
FY23
FY24
0.0
6.8
Debt Analysis
June 2024
$M
June 2023
$M
Change
$M
Change
%
Net on balance sheet debt16
3,311
1,998
1,313
66
Capitalised operating lease liabilities17
795
887
(92)
(10)
Net Debt
4,106
2,885
1,221
42
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
13
13
Environmental, Social and Governance.
14
Weighted Average Cost of Capital, calculated on a pre-tax basis.
15
10 per cent ROIC allows ROIC to be greater than pre-tax WACC through the cycle.
16
Net on balance sheet debt includes cash and cash equivalents, interest-bearing liabilities and fair value hedge of debt.
17
Capitalised aircraft lease liabilities are measured at fair value at the lease commencement date and remeasured over lease term on a principal and interest
basis. Residual value of capitalised aircraft lease liabilities denominated in foreign currency are translated at a long-term exchange rate.
FINANCIAL FRAMEWORK ALIGNED WITH SHAREHOLDER OBJECTIVES (CONTINUED)
ROIC > WACC Through the Cycle
ROIC for the 12 months to 30 June 2024 was 57.9 per cent. This ROIC was based on an average Invested Capital of $3.9
billion which is significantly lower than pre-COVID levels.
Calculated on a 12-month rolling basis, ROIC has declined 46 percentage points from 103.6 per cent as at 30 June 2023 to
57.9 per cent as at 30 June 2024. Invested Capital was materially impacted by COVID-19 as assets continued to depreciate
or were impaired, while capital expenditure was reduced to preserve cash during the crisis. As a result, the Group’s current
level of Invested Capital is unusually low and the reported ROIC unsustainably high. Group ROIC is expected to decline in
the near term as it has in financial year 2023/24 and revert to more sustainable levels as Invested Capital grows.
Disciplined Allocation of Capital
The Qantas Group takes a disciplined approach to allocating capital, with the aim to grow Invested Capital and return
surplus capital to shareholders. Net Capital Expenditure totalled $3,148 million during financial year 2023/24. The Group
completed $869 million18 of on-market share buy-backs which resulted in a 5 per cent reduction in shares on issue since
1 July 2023.
Upon considering the forward outlook for the business under its Financial Framework, the Board has resolved to announce
an on-market share buy-back of up to $400 million. The remaining $31 million of the $900 million on-market share buy-
back announced in financial year 2023/24 has been completed in the first half of financial year 2024/25.
Maintainable EPS Growth Over the Cycle
Statutory Earnings Per Share (EPS) was 75.9 cents per share for financial year 2023/24. The decrease from financial year
2022/23 was driven by a decrease in Statutory Profit After Tax, partially offset with the EPS accretion from capital
distributed via prior on-market share buy-backs.
GROUP PERFORMANCE
The Qantas Group reported an Underlying Profit Before Tax of $2,078 million for financial year 2023/24, a decline of $387
million from the Underlying Profit Before Tax of $2,465 million reported in financial year 2022/23.18
Net passenger revenue increased by 12 per cent, predominantly from growth in international operations. Net freight revenue
decreased, primarily due to weaker yields from increased international competition across belly space and freighters. Other
revenue increased with the continued business momentum of Qantas Loyalty.
Operating expenses grew primarily due to increased flying activity and price increases driven by CPI19. Fuel also increased
as a result of flying activity as well as higher SAF20 and carbon-offsetting program expenses. Share of net profit/(loss) of
investments was favourable compared to financial year 2022/23, underpinned by the improved profitability in Jetstar Japan
and stronger performance across the Group’s other investments.
Group Underlying Income Statement Summary21
June 2024
June 2023
$M
$M
Net passenger revenue
18,903
16,923
Net freight revenue
1,211
1,380
Other
1,825
1,512
Revenue
21,939
19,815
Operating expenses (excluding fuel)
(12,575)
(10,771)
Fuel
(5,316)
(4,555)
Impairment
–
(1)
Depreciation and amortisation
(1,773)
(1,762)
Share of net profit/(loss) of investments accounted for under the equity method
4
(44)
Total underlying expenditure
(19,660)
(17,133)
Underlying EBIT
2,279
2,682
Net finance costs
(201)
(217)
Underlying PBT
2,078
2,465
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
14
18
This includes $852 million of on-market share buy-backs settled and $17 million executed and payable in July due to T+2 settlement.
19 Consumer Price Index.
20 Sustainable Aviation Fuel.
21
Underlying expenses differ from equivalent statutory expenses due to items excluded from Underlying PBT such as those items identified by Management as
not representing the underlying performance of the business. Refer to the reconciliation on page 13.
GROUP PERFORMANCE (CONTINUED)
Operating Statistics
June 2024
June 2023
Available Seat Kilometres (ASK)22
M
141,357
117,258
Revenue Passenger Kilometres (RPK)23
M
116,895
97,693
Passengers carried
0
51,798
45,725
Seat Factor24
%
82.7
83.3
Operating Margin25
%
10.4
13.5
Unit Revenue (RASK)26
c/ASK
11.20
12.29
Total Unit Cost27
c/ASK
(9.73)
(10.19)
Group capacity for the year (ASK) increased 21 per cent with the return of international operations. Revenue Passenger
Kilometres increased 20 per cent as the Group’s Seat Factor broadly held at 83 per cent. Group Unit Revenue decreased
9 per cent to 11.20 c/ASK as fares moderated and capacity returned.
Total Unit Cost decreased to 9.73 c/ASK with the removal of temporary disruption costs and the restoration of international
capacity offset by increased customer investments and industry cost growth.
CASH GENERATION
Cash Flow Summary
June
2024
$M
June
2023
$M
Change
$M
Change
%
Operating cash flows
3,441
5,085
(1,644)
(32)
Investing cash flows
(2,887)
(2,625)
(262)
(10)
Net Free Cash Flow
554
2,460
(1,906)
(77)
Financing cash flows
(2,010)
(2,628)
618
24
Cash at beginning of year
3,171
3,343
(172)
(5)
Effect of foreign exchange on cash
3
(4)
7
>100
Cash at end of the period
1,718
3,171
(1,453)
(46)
Operating cash inflows for financial year 2023/24 were $3,441 million. These were lower than the prior corresponding period
primarily due to the rebuild of Revenue Received in Advance impacting the prior period, a reduction in earnings and one-off
impacts in the current period from realisation of provisions from the buyout of operating leases.
Investing cash outflows for financial year 2023/24 were ($2,887) million. Net capital expenditure28 was $3,148 million, which
included 16 aircraft deliveries, pre-delivery payments, acquisition costs of TripADeal and the balance primarily directed to
capitalised maintenance.
Net financing cash outflows of ($2,010) million included $1,176 million debt repayments partially offset by $1,011 million
drawdown of debt, $698 million in net aircraft and non-aircraft lease repayments, including lease buyouts, and an on-market
share buy-back of $852 million.
The Group continues to retain significant flexibility in its financial position, funding strategies and fleet plan to ensure that it
can respond to changes in market conditions and earnings scenarios.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
15
22 ASK – total number of seats available for passengers, multiplied by the number of kilometres flown.
23 RPK – total number of passengers carried, multiplied by the number of kilometres flown.
24 Seat Factor – RPKs divided by ASKs. Also known as load factor or load.
25 Operating Margin is Group Underlying EBIT divided by Group Total Revenue.
26 Unit Revenue (RASK) is calculated as ticketed passenger revenue divided by Available Seat Kilometres (ASK).
27 Total Unit Cost is Underlying PBT less ticketed passenger revenue per ASK.
28 Net capital expenditure is equal to net investing cash flows in the Consolidated Cash Flow Statement and the impact to Invested Capital from the disposals/
acquisitions of leased aircraft.
FLEET
The Group’s strategic priorities for fleet planning are centred on three key principles: the right aircraft for the right route,
maintaining flexibility and maintaining competitiveness. The determination of the optimal fleet plan, including the availability
of new technology, balances the level of capacity growth required in the markets, the competitive landscape and whether
the investment is earnings accretive. At all times, the Group retains significant flexibility in its fleet to respond to changes in
market conditions through fleet redeployment, refurbishment, lease extension or return and retirement.
At 30 June 2024, the Qantas Group fleet29 totalled 347 aircraft.
Fleet Summary (Number of Aircraft)
June
2023
Additions:
Deliveries
Additions:
Wet Leases
Transfers
Exits
June
2024
737-800
75
–
–
–
–
75
787-9
13
1
–
–
–
14
A380-80030
10
–
–
–
–
10
A330-20031
18
–
–
(2)
–
16
A330-30032
10
–
2
–
–
12
Total Qantas
126
1
2
(2)
–
127
A220-300
–
2
–
–
–
2
717-20033
20
–
–
–
(11)
9
E19034
18
–
8
–
–
26
Q200/Q300
19
–
–
–
–
19
Q400
31
–
–
–
–
31
F100
18
–
–
–
(1)
17
A319-100
–
3
–
–
–
3
A320-200
13
–
–
2
–
15
Total QantasLink
119
5
8
2
(12)
122
A320-200
56
2
–
(2)
–
56
A321-200
6
–
–
–
–
6
A321LR
8
5
–
–
–
13
787-8
11
–
–
–
–
11
Total Jetstar
81
7
–
(2)
–
86
737-300F/737-400F
4
–
–
–
(3)
1
767-300F
1
–
–
–
–
1
A321-200F
3
3
–
–
–
6
A330-200F35
–
–
–
2
–
2
747-400F36
2
–
–
–
–
2
Total Qantas Freight
10
3
–
2
(3)
12
Total Group
336
16
10
–
(15)
347
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
16
29 Includes Qantas Airways, Jetstar Australia and New Zealand, Jetstar Asia (Singapore), Qantas Freight and QantasLink and excludes aircraft operated by Jetstar
Japan and capacity hire aircraft to Jetstar Australia, from Jetstar Japan.
30 Eight A380-800 aircraft in operation as at 30 June 2024.
31
Two A330-200 converted to freighters in the first half of 2023/24.
32 Two A330-300 wet-lease from Finnair.
33 Exit of 11 717-200 during 2023/24 in accordance with the fleet retirement program.
34 26 E190 wet-lease from Alliance Airlines.
35 Second A330-220F was delivered on 31 December 2023 and entered into service in January 2024.
36 Two 747-400F wet-leased from Atlas.
SEGMENT PERFORMANCE
Segment Performance Summary
June
2024
June
2023
$M
$M
Qantas Domestic
1,063
1,270
Qantas International
556
906
Jetstar Group
497
404
Qantas Loyalty
511
451
Corporate
(263)
(212)
Unallocated/Eliminations
(85)
(137)
Underlying EBIT
2,279
2,682
Net Finance Costs
(201)
(217)
Underlying PBT
2,078
2,465
QANTAS DOMESTIC
Revenue
Underlying EBIT
Operating Margin
7,241
$M
1,063
$M
14.7
%
7,241
6,980
3,448
2,745
4,672
FY24 7,241
FY23 6,980
FY22 3,448
FY21
2,745
FY20 4,672
1,063
1,270
(765)
(575)
173
FY24 1,063
FY23 1,270
FY22 (765)
FY21 (575)
FY20 173
14.7%
18.2%
(22.2%)
(20.9%)
3.7%
FY24 14.7%
FY23 18.2%
FY22 (22.2%)
FY21 (20.9%)
FY20 3.7%
Metrics
June 2024
June 2023
ASKs
M
32,950
32,513
Seat Factor
%
76.0
76.2
Qantas Domestic reported an Underlying EBIT of $1,063 million, a decline of 16 per cent from financial year 2022/23. The
result delivered a lower operating margin of 14.7 per cent impacted by the moderation of premium leisure demand with
some substitution to international travel, new fleet entry-into-service costs and continued customer investment.
On-time performance improved to 80 per cent in the fourth quarter of financial year 2023/24, an increase of 10 points from
the second quarter of financial year 2023/24, reflecting the impact of investment in operational resilience and fleet health.
Qantas Domestic outperformed its major competitor in on-time performance 11 out of 12 months for financial year 2023/24
and has reduced mishandled bags by 33 per cent from financial year 2022/23. Recent initiatives such as Group Boarding are
expected to further improve customer outcomes and operational performance.
Qantas Domestic saw continued strength in the resources segment and maintained leading positions in both corporate and
SME segments. Domestic leisure demand moderated slightly with the return of international capacity, seeing some
substitution of leisure customers onto the international network. Strength in SME demand persists while non-resource
corporate demand gradually recovers to pre-COVID levels as same day travel continues to improve.
The Qantas Domestic fleet renewal program is underway, with two next-generation QantasLink A220 aircraft delivered in
financial year 2023/24 and a further five QantasLink A220 aircraft expected in financial year 2024/25. Three mid-life
QantasLink A319 aircraft have also been introduced to support the expansion of capacity for resource customers in Western
Australia.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
17
QANTAS INTERNATIONAL (INCLUDING FREIGHT)
Revenue
Underlying EBIT
Operating Margin
8,666
$M
556
$M
6.4
%
8,666
7,749
3,706
1,598
6,077
FY24
8,666
FY23
7,749
FY22
3,706
FY21
1,598
FY20
6,077
556
906
(238)
(548)
56
FY24
556
FY23
906
FY22
(238)
FY21
(548)
FY20
56
6.4%
11.7%
(6.4%)
(34.3%)
0.9%
FY24
6.4%
FY23
11.7%
FY22
(6.4%)
FY21
(34.3%)
FY20
0.9%
Metrics
June 2024
June 2023
ASKs
M
58,878
45,187
Seat factor
%
83.0
85.7
Qantas International (including Freight) reported an Underlying EBIT of $556 million, a 39 per cent decline from financial
year 2022/23. The result delivered a lower operating margin of 6 per cent, reflecting the moderating of unit revenue as
global capacity restored and increased investment in customer, operations and technology.
NPS continues to improve due to investment in operational resilience, fleet health and customer experience, including
disruption management, lounges and food and beverage. On-time performance37 has also benefited, lifting by 5 percentage
points in the second half of financial year 2023/24 from the first half of financial year 2023/24.
The restoration of flying continued in financial year 2023/24, with capacity for the year at 85 per cent of pre-COVID levels,
compared to 65 per cent in financial year 2022/23. This resulted in a 5 per cent unit cost improvement as the benefit of
returning capacity outweighed investment in customer, operations and technology. The international network has evolved
with growth in the 787-9 fleet to 14 aircraft which supported the commencement of services such as Sydney to New York (via
Auckland). Additional wet-leased aircraft from Finnair enabled services to Singapore and Bangkok and the eighth A380
return-to-service uplifted frequencies to Hong Kong and Los Angeles.
Freight earnings were challenged in the first half of financial year 2023/24, with some recovery in the second half as
moderating yields stabilised and remain greater than 150 per cent above pre-COVID levels. Freight Revenue Tonne
Kilometres increased by 11 per cent from financial year 2022/23 as international belly capacity returned. Qantas Freight
accelerated its transformation program with the introduction of two A330 and three A321 freighters, improving efficiency
and customer proposition.
JETSTAR GROUP
Revenue
Underlying EBIT
Operating Margin
4,922
$M
497
$M
10.1
%
4,922
4,235
1,440
1,140
3,006
FY24
4,922
FY23 4,235
FY22 1,440
FY21 1,140
FY20 3,006
497
404
(796)
(541)
(26)
FY24 497
FY23 404
FY22 (796)
FY21 (541)
FY20 (26)
10.1%
9.5%
(55.3%)
(47.5%)
(0.9)%
FY24
10.1%
FY23
9.5%
FY22
(55.3%)
FY21
(47.5%)
FY20
(0.9%)
Metrics
June 2024
June 2023
ASKs
M
49,529
39,558
Seat factor
%
86.8
86.4
The Jetstar Group reported an Underlying EBIT of $497 million, reflecting an uplift in earnings compared to financial year
2022/23 driven by growth in flying. Jetstar grew capacity by 25 per cent as key international markets returned and price-
sensitive leisure demand remained stable, with seat factor holding at 87 per cent.
Jetstar’s Australian domestic network delivered an Underlying EBIT of $298 million, with capacity growth of 15 per cent
relative to financial year 2022/23 in a stable demand environment. The operating margin of the domestic business was 11 per
cent, supported by strong ancillary revenue performance and fleet transformation delivering incremental earnings.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
18
37 On-time arrival.
JETSTAR GROUP (CONTINUED)
Jetstar’s international network reported an Underlying EBIT of $199 million, with strong performance in key markets.
Capacity grew by 34 per cent relative to financial year 2022/23 as new fleet deliveries and redeployment of existing 787-8
fleet supported profitable growth. Jetstar’s Australian international business delivered an 11 per cent margin, with ongoing
leisure demand strength supporting the launch of new routes such as Sydney to Osaka and Brisbane to Seoul.
On-time performance and cancellation rates significantly improved across financial year 2023/24, supporting the unwind of
disruption costs incurred in financial year 2022/23.
Jetstar Asia (Singapore) maintained profitability in financial year 2023/24. Significant growth is expected following the
recent entry into service of two additional A320 aircraft and return of two A320 aircraft from Jetstar Australia and New
Zealand in financial year 2023/24. Jetstar Group’s share of Jetstar Japan’s statutory results substantially improved from a
loss of ($54) million in financial year 2022/23 to a loss of ($16) million in financial year 2023/24.
Jetstar Group receive six A321LR aircraft in financial year 2023/24 (five to Jetstar Australia and New Zealand and one to
Jetstar Japan), delivering an estimated 12 per cent unit cost advantage on a replacement basis. Jetstar Australia has 13
A321LRs, with approximately $7 million per aircraft in realised EBIT benefits across financial year 2023/24 from fuel and
scale efficiencies.
Affordable travel remained a key focus for the Jetstar Group, with 11 million fares38 sold below $100 in financial year 2023/24.
QANTAS LOYALTY
Revenue
Underlying EBIT
Operating Margin
2,573
$M
511
$M
19.9
%
2,573
2,189
1,334
984
1,224
FY24
2,573
FY23 2,189
FY22 1,334
FY21
984
FY20 1,224
511
451
292
272
341
FY24
511
FY23 451
FY22 292
FY21
272
FY20 341
19.9%
20.6%
21.9%
27.6%
27.9%
FY24 19.9%
FY23 20.6%
FY22 21.9%
FY21 27.6%
FY20 27.9%
Metrics
June 2024
June 2023
QFF members
M
16.4
15.2
Points earned
B
202
175
Points redeemed39
B
171
155
Qantas Loyalty reported an Underlying EBIT of $511 million for financial year 2023/24. The result was underpinned by a
growing active membership base, which increased 14 per cent relative to financial year 2022/23. The launch of Classic Plus
for the international network in the second half of financial year 2023/24 provided wider availability for members to redeem
on flights compared to Classic Rewards40 alone. Demand for flight rewards remained strong with total flights booked using
points increasing by 13 per cent compared to financial year 2022/23.
Membership continued to grow by more than 1 million new members in the last 12 months, up 8 per cent from financial year
2022/23. Ninety thousand new members joined Qantas Business Rewards (QBR), with total membership now exceeding
500,000.41 During the fourth quarter, new Financial Service products launched with both ANZ and NAB. QBR captures one in
five Australian small and medium-sized enterprises and five major banks have now joined the program.
Qantas Loyalty continued its focus on engaging its member base through broader and deeper program offerings. The
acquisition of the remaining 49 per cent of TripADeal reflected this commitment as it accelerated the business’ expansion
into Holiday packages. Hotels, Holidays and Tours bookings were up 12 per cent from financial year 2022/23. Other
highlights include home and car insurance selling almost double the number of policies compared to financial year 2022/23,
the re-launch of the new Qantas App and the successful new partnership with Ticketek.
The acceleration of the Loyalty flywheel was reflected in a 15 per cent uplift in points earned in financial year 2023/24.
Demand for Qantas Points-earning credit cards continued to grow, with approximately 300,000 new cards acquired, which
is up 21 per cent compared to financial year 2022/23 and Qantas Points-earning credit cards maintaining over 35 per cent
share of all consumer credit card spend.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
19
38 Base Fare. International fares sold are across all carriers in Jetstar Group.
39 Net points redeemed.
40 Qantas Rewards flight reward.
41
Qantas Business Rewards members at 540,000 as of 30 June 2024.
RECONCILIATION OF UNDERLYING PBT TO STATUTORY PROFIT BEFORE TAX
The Statutory Profit Before Tax was $1,884 million for the financial year ended 30 June 2024.
Underlying PBT
Underlying PBT is a non-statutory measure and is the primary reporting measure used by the CODM bodies for the purpose
of assessing the performance of the Group. The objective of measuring and reporting Underlying PBT is to provide a
meaningful and consistent representation of the underlying performance of each operating segment and the Qantas Group.
Items which are identified by Management and reported to the CODM bodies as not representing the underlying
performance of the business are not included in Underlying PBT. The determination of these items is made after
consideration of their nature and materiality and is applied consistently from period to period.
Items not included in Underlying PBT primarily result from revenues or expenses outside the ordinary course of business
relating to business activities in other reporting periods, Recovery Plan restructuring costs, transactions involving
investments, gains/losses on sale and/or impairments of assets and other transactions.
RECONCILIATION OF UNDERLYING PBT TO STATUTORY PROFIT BEFORE TAX
June
2024
June
2023
$M
$M
Underlying PBT
2,078
2,465
Items not included in Underlying PBT
– Legal provisions and related costs
(198)
–
– Recovery Plan restructuring costs
–
5
– Net gain on disposal of assets
4
2
Total items not included in Underlying PBT
(194)
7
Statutory Profit Before Income Tax Expense
1,884
2,472
In the 2023/24 financial year, there was no difference between Underlying PBT and Statutory PBT. financial year, items
outside of Underlying PBT included:
Item Outside of
Underlying PBT
Description
Legal provisions and
related costs
($128) million for the announced ACCC settlement (compensation and penalties) and related costs
and ($70) million for an increase in provisions in relation to the ground handling outsourcing Federal
Court case (refer to Note 33(B)), recognised in Other Expenditure.
Net gain on disposal
of assets
The net gain on disposal of assets of $4 million arose from the disposal of Perth Airport assets.
In the 2022/23 financial year, items outside of Underlying PBT included:
Item Outside of
Underlying PBT
Description
Recovery Plan
restructuring costs
$5 million primarily relates to the reversal of a redundancy provision previously recognised.
Net gain on disposal
of assets
The net gain on disposal of assets of $2 million arose from the sale of the Group’s investment in
Helloworld Travel Ltd (ASX: HLO).
Refer to Note 2(B) of the Financial Report for details of items not included in Underlying PBT.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
20
MATERIAL BUSINESS RISKS
The aviation industry is subject to inherent risks that can impact operations if left untreated. These include, but are not
limited to, shifts in customer behaviour and in market demand, exposure to economic uncertainty and geopolitical
instability, changes in government regulations, volatility in fuel prices and foreign exchange rates, and other external events
such as aviation incidents, natural disasters, climate change, international conflicts or an epidemic. In rare circumstances,
‘black swan’ events can materialise, resulting in unexpected consequences such as those that the aviation industry
experienced due to the COVID-19 pandemic. The Group continues to plan for a wide range of scenarios to ensure the Group
maintains its strong position to support financial targets, operational outcomes and meet travel demand and customer
expectations.
The Group is subject to material business risks which may impact the achievement of the Group's strategy and financial
prospects. The Group’s focus is on continuously improving the controls to manage or mitigate these risks.
Operational and people safety: While there are inherent safety risks in aviation, the Qantas Group’s ‘safety first’ approach
ensures that there is a consistent focus on and continuous improvement in the systems and processes that seek to identify
and treat current and emerging safety risks to our people and customers, both in the air and on the ground. All Group
airlines have regulatory approved systems, including aircraft airworthiness and maintenance as well as operational
activities, procedures and training programs utilising qualified (licensed) personnel, approved manuals, and a robust safety
and reporting culture. Comprehensive operational and workplace audit and assurance programs seek to confirm that key
processes and controls are operating as intended and that the Group continues to meet its regulatory compliance
obligations.
Physical security of people and assets: The Group is committed to protecting our people, customers, aircraft and other
assets from physical security threats and interference. A comprehensive threat and operational risk assessment program is
in place which is supported by extensive collaboration with key Australian and international government agencies and
security partners. Security measures applied to passengers, baggage, cargo, catering and stores throughout the network. ,
in line with regulatory requirements. Extensive controls are in place to protect the operational safety of flight systems,
including access controls to aircraft flight decks and physical security of aircraft at ports.
Liquidity and fuel price volatility (including foreign exchange): The Qantas Group’s ability to maintain sufficient liquidity is
inherent in providing for its operating needs. Maintaining access to a variety of funding sources, targeting minimum liquidity
levels, and continued vigilance on costs through ongoing focus on further transformation opportunities are embedded to
ensure adequate coverage of liquidity requirements, taking into consideration a range of adverse scenarios, including
flexibility in capacity settings to respond promptly to sudden changes in demand and shift in customer preferences. The
Qantas Group remains focused on delivering its strategic priorities while continuing to protect its liquidity position through
the ongoing application of its Financial Framework.
The Qantas Group is subject to fuel price and foreign exchange risks which are an inherent part of the operations of an
airline and as such, are industry-wide risks. For the Qantas Group, the size of the Group’s fuel and foreign exchange risk will
vary with operational capacity, the routes the Group operates as well as the size of fleet investment capital expenditure.
Recent tensions and unrest, especially in the Middle East, have increased fuel price volatility, which is expected to persist
into financial year 2024/25 and financial year 2025/26. Additionally, global political instability has impacted foreign
exchange rates, affecting the Group’s foreign currency-denominated cash outflows.
The Qantas Group manages its fuel and foreign exchange risks through a comprehensive hedging program (aligned to the
Group’s Treasury Risk Management Policy) which provides time for the business to ultimately adjust capacity to reflect the
new operating environment or change its cost base. Qantas will continue to hedge its fuel and foreign exchange risks in line
with this program. The Group normally uses a mix of fuel derivative collars and outright options to cover underlying fuel
price risk and is actively managed for changes in capacity. In addition, the Group has an established investment
prioritisation framework that informs capital expenditure prioritisation and continues to invest in new aircraft with a focus on
fuel efficiency and conservation.
Competition: The markets in which the Qantas Group operates are highly competitive, and growth in market capacity ahead
of underlying demand can impact upon industry profitability. Competitors include both domestic airlines and major foreign
airlines (including government-owned or controlled airlines), some with more financial resources and/or lower cost
structures than Qantas. This competition may increase with the expansion of existing airlines, the consolidation of existing
airlines and/or the creation of alliances between airlines, changes to existing alliances, or new airlines entering the market.
Australia’s aviation policies favour a highly competitive environment, including more liberal rights of entry into Australian
domestic and international markets, compared to other jurisdictions. These policies have attracted offshore competitors
(predominantly state-sponsored airlines) to the Australian international aviation market, which has further increased
competition for passengers on international routes. Additionally, the Qantas Group ordinarily faces high levels of price
competition in the markets in which it operates and aggressive pricing by competitors seeking to gain market share can
adversely affect the Qantas Group’s revenues and yield performance. The financial impact of fare discounts, as a result of
competitive pressures is exacerbated by the high fixed costs that characterise the aviation industry.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
21
MATERIAL BUSINESS RISKS (CONTINUED)
The combined effect of these factors may have a materially adverse effect on the revenue and financial position of the
Group. The Group continues to leverage its dual brand strategy and established governance processes to optimise network
and fleet plans to enhance the Group’s competitive position, and reacts appropriately to emerging issues on pricing,
network and capacity. The Group also continues to focus on enhancing operational performance and execution of clear
strategies to maintain leadership in key customer segments, enabled by strong relationship management, investment in
customer and loyalty programs, and technology-enabled solutions.
Market demand: Demand for travel largely drives the Qantas Group’s planning as it deploys capacity based on market
demand. Unforeseen and/or sustained change in market demand and/or change in capacity settings could result in a
capacity/demand imbalance impacting on the Group’s ability to maximise its position in the market. The Qantas Group
optimises network and fleet plans through its dual brand strategy and fleet renewal program (next generation aircraft),
ensuring there is flexibility to adjust capacity settings across the network to be able to respond to changes in demand.
Active monitoring of early warning indicators of changes to markets is performed to mitigate exposures and pursue
opportunities across the dual brands.
Industrial relations: The Qantas Group operates in a highly regulated employment market and a large proportion of the
Qantas Group’s employees are represented by unions and are party to collective bargaining arrangements. The Australian
Government’s legislative reforms to the Fair Work Act (Cth) could have significant implications for the Group. The Group
continues to have oversight of the internal and external industrial landscape and monitors the emerging risks associated
with the legislative reforms, including the potential implications to the Group.
Any significant enterprise bargaining dispute between the Qantas Group and its employees could also lead employees to
take industrial action, including work stoppages. This could disrupt the Qantas Group’s day-to-day operations and adversely
affect business performance, potentially leading to reputational damage. The Group has developed business continuity
plans, including testing and rehearsal (to the extent possible), to provide continuity of operations in the event of industrial
action.
Customer risk: The ongoing success of the Qantas Group depends to a large degree on customer satisfaction and loyalty,
particularly considering the significant competition for passengers that characterises the aviation industry. Operational
challenges such as frequent cancellations, poor on-time performance, and mishandled baggage could continue to
negatively impact customer satisfaction and harm the Qantas Group's reputation. Addressing these issues is crucial for
maintaining our brand's strength and attracting future customers as we continue to build and enhance our reputation.
The Group recently announced significant investments to improve the customer experience, including enhanced Frequent
Flyer rewards program and improved customer experience (in-flight experience, including WiFi capabilities, upgrading apps
with baggage tracking features and live notification functionalities, introducing a smoother boarding experience through
group boarding and improved food and beverages offerings).
The Group also continues to design and implement mechanisms to cover customer journey disruptions, including efficient
and compassionate complaint resolution, delays and cancellations, easy and proactive reimbursement and product and
service quality issues.
The Qantas Group is vulnerable to long-term changes in consumer preferences in relation to its service offerings, the
markets in which it operates, and consumer and business sentiment towards travel, including environmental considerations
and digital expectations. Any failure by the Qantas Group to predict or respond to such changes in a timely and cost-
effective manner may adversely impact the Qantas Group’s future operating and financial performance. The Group is
focused on embedding a continuous improvement culture in core business units to ensure an integrated and consistent
Group approach in managing customer concerns and complaints. As customer preferences shift, the Group continues to
transform the customer experience through a multi-year program aimed at adapting to new customer journey requirements,
market learnings and business need, to ensure the Group’s strong market position is maintained.
Climate change: The Group recognises that human-induced climate change is a significant issue for the aviation industry
and is committed to supporting the aims of the Paris Climate Agreement to limit warming to well below two degrees Celsius
above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial
levels. Climate-related risks include both physical risks (such as increased extreme weather events) and transition risks
(including development of alternative fuel and changes to government policy, law and regulation). The Group manages
these risks through mechanisms including, but not limited to, emission reduction targets; scenario analysis to inform the
Group’s strategy; robust governance; fleet transformation activities; investing in modern aircraft technology; supporting a
competitive sustainable aviation fuel industry in Australia; operational and market-based controls; carbon offset programs;
and monitoring government policy. The Qantas Group’s current emission reduction plan, as outlined in the March 2022
Climate Action Plan, includes: a 25 per cent reduction in net emissions from 2019 levels by 2030; 10 per cent sustainable
aviation fuel in fuel mix by 2030; and net zero emissions by 2050. The Qantas Group is working actively in order to respond
to the increased demand for transparency on identification and management of climate-related risks by aligning its
corporate disclosures with the Taskforce on Climate-related Financial Disclosures (TCFD) and the Australian Accounting
Standards Board’s Australian Sustainability Reporting Standards - Disclosure of Climate-related Financial Information.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
22
MATERIAL BUSINESS RISKS (CONTINUED)
Cyber security and data loss: The heightened cyber threat environment continues to evolve, with increased cyber-criminal
activities targeting organisations capable of paying ransoms. Additionally, cyberattacks continue to represent a
consequence of geopolitical risks, growing in scale, complexity and persistence. The Group remains focused on tracking
these geopolitical developments that could potentially impact the Group's operations. The Group also continues to enhance
its cyber defence, including heightened monitoring and assessment of technology and data environments, further
enhancing cyber security, privacy and data governance controls; embedding them into business processes, taking a
security and privacy by design approach; and creating a cyber-safe and privacy-orientated culture that builds on an
established safety culture and the Three Lines risk management model.
The Group’s Data Governance Framework now includes mechanisms to ensure that ethical and commercial data risks are
managed in addition to data protection and privacy risks. Qantas has a defined risk and control framework, aligned with
industry standards, which is designed to protect the confidentiality, integrity and availability of data and to maintain
compliance with regulatory requirements. The Group’s cyber and data privacy risks are continuously monitored by the
Group’s Cyber and Information Management Committees and are subject to independent assurance. In addition, the Qantas
Group has a close working relationship and engagement with government and industry peers to enable the Group to
effectively manage cyber and privacy risks as they evolve.
Supply chain: The Qantas Group is dependent on third-party providers for the expansion and replacement of its aircraft
fleet, including availability of slots for aircraft maintenance, supply of aircraft parts, and other critical business processes.
The failure of these providers to deliver and/or adequately perform their service obligations or other unexpected
interruptions of services, such as the recent CrowdStrike incident, may cause significant disruption to the Group’s
operations and have an adverse impact on financial performance. The Group continuously builds resilience in flight
schedules across the network, analyses and monitors the global and local supply market to provide early insights to support
assessments of the Group’s supply chain exposure; proactively manages and invests in high risk items; uses its business
continuity plans to manage the risk of supply failures; and has contingency plans in place to respond to key supplier
interruptions.
Policy or regulatory change: Given the highly regulated business environment the Group operates in, any major policy or
regulatory changes, such as those in relation to competition and consumer legislation, rights of entry, climate change policy,
industrial relations reforms, and airport infrastructure, can significantly impact the Group’s operations, demand or
competition. The Group continues to proactively engage with regulators and policy makers to demonstrate and inform the
potential implications of proposed changes and contribute to improved policy outcomes. The Group also participates in
industry bodies in Australia and internationally to proactively work with stakeholders with shared interests and drive policy
outcomes which consider industry-wide challenges and implications.
New business models: As more large customer brands aim for a seamless customer journey, the threat of further airline
disintermediation, the rapid rise of digitisation and new technology and business models continue to evolve. The Group
continues to enhance its distribution strategy and digital capability, expand its coalition business through innovative new
business models, new partners and member experience, and invest in technological platforms and processes to enable a
significantly improved end-to-end customer journey.
An overview of the Group Risk Management Framework is contained in the Qantas Group Business Practices Document
available at www.qantas.com.
Qantas Annual Report 2024
Review of Operations continued
For the year ended 30 June 2024
23
OVERVIEW
Corporate governance is core to ensuring the creation,
protection and enhancement of shareholder value. The
Board maintains, and requires that Qantas Management
(Management) maintains, the highest level of ethics at all
times.
The Board comprises a majority of Independent Non-
Executive Directors who, together with the Group CEO
and Managing Director, have an appropriate balance of
skills, knowledge, experience, independence and diversity
to enable the Board as a collective to effectively discharge
its responsibilities.
The Board has endorsed and adopted the ASX Corporate
Governance Principles and Recommendations (ASX
Principles) 4th Edition throughout 2023/24.
Accordingly, Qantas Airways Limited (Qantas) has
disclosed its 2024 Corporate Governance Statement in
the Corporate Governance section on the Qantas website.
As required, Qantas has also lodged its Corporate
Governance Statement with the ASX.
The following is a summary of the key aspects of the
Corporate Governance Statement.
QANTAS GOVERNANCE REVIEW
While this Corporate Governance Statement relates to the
financial year ended 30 June 2024, it is important to note
that, on 8 August 2024, the Qantas Board released a
report following a review of key governance matters,
which commenced in October 2023 and considered
matters over the preceding 12 months (Governance
Review).
The Qantas Board and Qantas Group Management have
committed to the implementation of all recommendations
from the Governance Review, the vast majority of which
are already completed or well underway. The impact of
the implementation of the Governance Review
recommendations will be reflected in Qantas’ expanded
2025 Corporate Governance Statement.
THE BOARD LAYS SOLID FOUNDATIONS FOR
MANAGEMENT AND OVERSIGHT
The Board has adopted a formal Charter, which is
available in the Corporate Governance section on the
Qantas website.
The Board is responsible for agreeing and reviewing the
strategic direction of Qantas and monitoring the
implementation of that strategy by Management.
The CEO is responsible for the day-to-day management of
the Qantas Group with all powers, discretions and
delegations authorised, from time to time, by the Board.
The Company Secretary is accountable directly to the
Board, through the Chair, on all matters to do with the
proper functioning of the Board.
THE BOARD IS STRUCTURED TO BE EFFECTIVE AND
TO ADD VALUE
At 30 June 2024, the Qantas Board comprised nine
Directors. Eight Directors are Independent Non-Executive
Directors, six of whom have been elected by shareholders
and two have been appointed to fill casual vacancies. The
Qantas Group CEO, who is an Executive Director, is not
regarded as independent.
Details of the Directors, their qualifications, skills,
experience and tenure are set out on pages 8 to 10 of the
Qantas Annual Report 2024.
The Board has four committees:
– Audit Committee
– Nominations Committee
– Remuneration Committee
– Safety, Health, Environment and Security Committee.
Each of these committees assists the Board with specified
responsibilities that are set out in the Committee Charters,
as delegated and approved by the Board.
Between the end of the financial year ended 30 June 2024
and the date of this Report, the Qantas Board reviewed its
Board and Committee Roles and Responsibilities and the
ambit of the Remuneration Committee has been
expanded to become the People and Remuneration
Committee, with a resulting change to responsibilities
being introduced into its Charter. The Charters for the
Board and each of the other Committees were also
updated following their review, and the updated
responsibilities will be reflected in Qantas’ 2025
Corporate Governance Statement.
Membership of and attendance at 2023/24 Board and
Committee meetings are detailed on page 28 of the
Qantas Annual Report 2024.
Qantas Annual Report 2024
Condensed Corporate Governance Statement
For the year ended 30 June 2024
24
THE BOARD INSTILS A CULTURE OF ACTING
LAWFULLY, ETHICALLY AND RESPONSIBLY
The Board has established a Corporate Governance
Framework, comprising Non-Negotiable Business
Principles (Principles) and Group Policies, which forms the
foundation for the way in which Qantas and its controlled
entities (Qantas Group or Group) undertake business. The
Principles and Group Policies, including the Qantas Group
Code of Conduct and Ethics, are detailed in the Qantas
Group Business Practices document. This Framework
is supported by a rigorous Whistleblower program, which
provides a protected disclosure process for all disclosing
persons, and an Anti-Bribery and Corruption Policy, which
outlines appropriate behaviour for all Qantas Group
personnel.
The Qantas Group Share Trading Policy sets out
guidelines designed to protect the Qantas Group and its
personnel (including Directors) from intentionally or
unintentionally breaching the law. The Qantas Group
Share Trading Policy prohibits personnel from dealing in
the securities of any Qantas Group listed or unlisted entity
while in possession of material non-public information.
In addition, certain nominated Qantas Group personnel
are also prohibited from entering into any hedging or
margin lending arrangement or otherwise granting a
charge over the securities of any Qantas Group listed or
unlisted entity, where control of any sale process relating
to those securities may be lost.
THE BOARD SAFEGUARDS THE INTEGRITY OF
CORPORATE FINANCIAL REPORTING
The Board and the Audit Committee closely monitor the
integrity of all corporate reports. Qantas has a sound
system of risk management and internal controls in place
to verify the half-year and annual financial reports and
confirm the declarations provided by the CEO and CFO to
the Board.
The Board and the Audit Committee also monitor the
independence of the external auditor. Qantas rotates
the lead external audit partner every five years and
imposes restrictions on the employment of personnel
previously employed by the external auditor. Qantas
rotated its lead external audit partner during the 2021/22
financial year. The next rotation of lead external audit
partner for KPMG will take place following the finalisation
of the audit for the 2025/26 financial year.
Notwithstanding there are no service, quality or
independence issues with the current auditor, in
consideration of best practice, the Qantas Group
has decided to undertake a competitive external audit
tender process during the 2024/25 financial year for
appointment in relation to the 2026/27 financial year.
The Qantas Group is committed to verifying the integrity
of all other periodic corporate reports it releases to the
market that are not audited or reviewed by the external
auditor. Information regarding the verification process is
disclosed in our 2024 Corporate Governance Statement.
THE BOARD MAKES TIMELY AND BALANCED
DISCLOSURE
Qantas is committed to ensuring that trading in its shares
takes place in an orderly and informed market by having
transparent and consistent communication with all
shareholders. Qantas has an established process to
ensure that it complies with its continuous disclosure
obligations at all times, including a bi-annual confirmation
by all Executive Management that the areas for which they
are responsible have complied with the Group’s
Continuous Disclosure Policy. To further strengthen these
processes, in 2023/24 Qantas established a Market
Disclosure Committee (MDC) which is responsible for
reviewing all information forwarded pursuant to the
Continuous Disclosure Policy and for deciding / making a
recommendation to the CEO or Chair (as appropriate) on
its disclosure.
Qantas proactively communicates with its shareholders
via the ASX and its web-based Newsroom, with all
materials released by the Group made available to all
shareholders at the same time. Additionally, the Qantas
Board receives copies of all material market
announcements for review and approval of release to the
market, as well as a final copy promptly after they have been
made.
THE BOARD RESPECTS THE RIGHTS OF
SHAREHOLDERS
Qantas has a Shareholder Communications Policy which
promotes effective two-way communication with
shareholders and the wider investment community and
encourages participation at general meetings. Qantas
actively maintains a corporate site and investor portal
which outlines the Company’s corporate governance
policies and procedures and includes an array of
information to help assist investors to make informed
decisions.
Additionally, Qantas actively conveys its publicly-
disclosed information and seeks the views of its
shareholders, large and small, in a number of forums,
including at the Annual General Meeting (AGM), Qantas
Investor Days and, as is common practice among its major
listed peers, through periodic meetings with current and
potential institutional shareholders.
Shareholders also have the option to receive
communications from, and send communications to,
Qantas and its share registry electronically, including
email notifications of significant market announcements.
Qantas is focused on reducing our carbon footprint whilst
providing timely corporate updates and disclosures. As
such, Qantas will no longer send physical meeting
documents unless a shareholder requests a copy to be
mailed.
The external auditor attends the AGM and is available to
answer shareholder questions that are relevant to the
audit.
Qantas Annual Report 2024
Condensed Corporate Governance Statement continued
For the year ended 30 June 2024
25
THE BOARD RECOGNISES AND MANAGES RISK
Qantas is committed to embedding risk management
practices to support the achievement of business
objectives and fulfil corporate governance obligations.
The Board is responsible for reviewing and overseeing the
risk management framework for the Qantas Group,
including that the Group is operating with due regard to
the risk appetite set by the Board, and for ensuring the
Qantas Group has an appropriate corporate governance
structure. Within that overall framework, Management has
designed and implemented a risk management and
internal control system to manage Qantas’ material
business risks.
During 2023/24, the Audit Committee undertook its
annual review of the effectiveness of Qantas’
implementation of its risk management system and
internal control framework.
The internal audit function is carried out by Group Audit
and Risk and is independent of the external auditor. Group
Audit and Risk provides independent, objective assurance
and consulting services on Qantas’ system of risk
management, internal control and governance.
The Audit Committee approves the Group Audit and Risk
Internal Audit Charter, which provides Group Audit and
Risk with full access to Qantas Group functions, records,
property and personnel, and establishes independence
requirements. The Audit Committee also approves the
appointment, replacement and remuneration of the
internal auditor. The internal auditor has a direct reporting
line to the Audit Committee and also provides reporting to
the Safety, Health, Environment and Security Committee.
THE BOARD REMUNERATES FAIRLY AND RESPONSIBLY
The Qantas Executive remuneration objectives and
approach are set out in the Remuneration Report from
page 32 to 62 of the Qantas Annual Report 2024.
Information about the remuneration of Executive
Management is disclosed to the extent required, together
with the process for evaluating performance, in the
Remuneration Report from page 32 to 62 of the Qantas
Annual Report 2024.
Non-Executive Directors do not receive any performance-
based remuneration. Further information has been
disclosed in the Remuneration Report from pages 60
to 62 of the Qantas Annual Report 2024.
Qantas Annual Report 2024
Condensed Corporate Governance Statement continued
For the year ended 30 June 2024
26
The Directors of Qantas Airways Limited (Qantas) present
their Report, together with the Financial Statements of the
consolidated entity comprising Qantas and its controlled
entities (Qantas Group) and the Independent Audit
Report, for the year ended 30 June 2024. In compliance
with the provisions of the Corporations Act 2001 (Cth), the
Directors’ Report is set out below.
DIRECTORS
The Directors of Qantas at any time during or since the
end of the year are:
Richard Goyder AO
Vanessa Hudson
Belinda Hutchinson AC
John Mullen (appointed April 2024)
Doug Parker
Todd Sampson
Dr Nora Scheinkestel (appointed March 2024)
Dr Heather Smith PSM (appointed August 2023)
Antony Tyler
Alan Joyce AC (retired September 2023)
Michael L’Estrange AO (retired November 2023)
Maxine Brenner (retired February 2024)
Jacqueline Hey (retired February 2024)
Details of the Directors’ qualifications, experience and any
special responsibilities, including Qantas Committee
memberships, are set out on pages 8 to 10.
PRINCIPAL ACTIVITIES
The principal activities of the Qantas Group during the
year were the operation of international and domestic
air transportation services, the provision of freight
services and the operation of a frequent flyer loyalty
program.
DIVIDENDS AND OTHER SHAREHOLDER
DISTRIBUTIONS
No final dividend will be paid for the year ended
30 June 2024 (2023: nil final dividend). There was also no
interim dividend paid during the year.
In August 2024, the Directors announced an on-market
share buy-back of up to $400 million. During the year
ended 30 June 2024, Qantas completed an on-market
share buy-back of $500 million announced in August
2023, and $369 million of the $400 million on-market
share buy-back announced in February 2024, with the
remaining $31 million completed during the first half of the
2024/25 financial year.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of the Directors, there were no other
significant changes in the state of affairs of the Qantas
Group that occurred during the financial year under
review that are not otherwise disclosed in this Report.
REVIEW OF OPERATIONS
A review of, and information about, the Qantas Group’s
operations, including the results of those operations
during the year, together with information about the
Qantas Group’s financial position, appears on pages 11 to
23.
Details of the Qantas Group’s strategies, prospects for
future financial years and material business risks have
been included in the Review of Operations to the extent
that their inclusion is not likely to result in unreasonable
prejudice to the Qantas Group. In the opinion of the
Directors, detail that could be unreasonably prejudicial to
the interests of the Qantas Group, for example,
information that is commercially sensitive, confidential or
could give a third party a commercial advantage, has not
been included.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
Refer to Note 34 of the Financial Report for events which
occurred subsequent to the balance sheet date. Other
than the matters disclosed in Note 34, since the end of the
year and to the date of this Report no other matter or
circumstance has arisen that has significantly affected or
may significantly affect the Qantas Group’s operations,
results of those operations or state of affairs in future
years.
Qantas Annual Report 2024
Directors’ Report
For the year ended 30 June 2024
27
DIRECTORS’ MEETINGS
The number of Directors’ meetings held (including meetings of Committees of Directors) and attendance of Directors during
2023/24 is as follows:
Qantas Board
Remuneration Committee1
Scheduled
Meetings
Unscheduled
Meetings
Sub-
Committee
Meetings2
Audit
Committee1
Safety,
Health,
Environment
and Security
Committee1
Scheduled
Meetings
Unscheduled
Meetings
Nominations
Committee1
Directors
Attended
Held3
Attended
Held3
Attended
Held4
Attended
Held3
Attended
Held3
Attended
Held3
Attended
Held3
Attended
Held3
Richard Goyder5
8
8
7
7
2
2
–
–
–
–
–
–
–
–
2
2
John Mullen6
2
2
–
1
–
–
–
–
–
1
–
–
–
–
–
–
Vanessa Hudson7
8
8
7
7
1
1
–
–
3
3
–
–
–
–
–
–
Belinda Hutchinson
8
8
7
7
2
2
5
5
4
4
–
–
–
–
2
2
Doug Parker8
7
8
6
7
–
–
–
–
3
3
3
3
3
3
–
–
Todd Sampson
8
8
7
7
–
–
5
5
–
–
3
3
3
3
–
–
Dr Nora Scheinkestel9
3
3
–
1
–
–
2
2
–
–
1
1
1
1
–
–
Dr Heather Smith10
7
7
6
7
–
–
2
2
–
–
1
1
1
1
–
–
Antony Tyler
8
8
7
7
–
–
–
–
4
4
–
–
–
–
2
2
Alan Joyce11
2
2
1
1
1
1
–
–
1
1
–
–
–
–
–
–
Maxine Brenner12
5
5
6
6
–
–
3
3
–
–
2
2
2
2
–
–
Jacqueline Hey13
5
5
6
6
–
–
3
3
–
–
2
2
2
2
2
2
Michael L’Estrange14
3
3
6
6
–
–
–
–
1
1
1
1
1
1
–
–
1 All Directors are invited to, and regularly attend, Committee meetings in an ex officio capacity. The above table reflects the attendance of a Director only where
he or she is a Member of the relevant Committee.
2 Sub-Committee meetings convened for specific Board-related business.
3 Number of meetings held during the period that the Director held office.
4 Number of meetings held during the period that the Director held office and was required to attend.
5 The Chair attends all Committee Meetings.
6 John Mullen was appointed Non-Executive Director and a Member of the Safety, Health, Environment and Security Committee on 22 April 2024.
7 Vanessa Hudson was appointed a Member of the Safety, Health, Environment and Security Committee on 6 September 2023.
8 Doug Parker was appointed a Member of the Safety, Health, Environment and Security Committee and a Member of the Remuneration Committee on
23 August 2023.
9 Dr Nora Scheinkestel was appointed Non-Executive Director on 1 March 2024, and Chair of the Remuneration Committee and a Member of the Audit Committee
on 1 March 2024.
10 Dr Heather Smith was appointed Non-Executive Director on 24 August 2023, and a Member of the Remuneration Committee and a Member of the Audit
Committee on 22 February 2024.
11 Alan Joyce retired as Group CEO and Managing Director on 5 September 2023.
12 Maxine Brenner retired as Non-Executive Director on 22 February 2024.
13 Jacqueline Hey retired as Non-Executive Director on 22 February 2024.
14 Michael L'Estrange retired as Non-Executive Director on 3 November 2023.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
28
DIRECTORSHIPS OF LISTED COMPANIES HELD BY MEMBERS OF THE BOARD AS AT 30 JUNE 2024 – FOR THE PERIOD
1 JULY 2021 TO 30 JUNE 2024
Richard Goyder
Qantas Airways Limited
Woodside Energy Group Ltd
Current, appointed 17 November 2017
Current, appointed 1 August 2017
Vanessa Hudson Qantas Airways Limited
Current, appointed 5 May 2023
Belinda
Hutchinson
Qantas Airways Limited
Current, appointed 12 April 2018
John Mullen
Qantas Airways Limited
Brambles Limited
Treasury Wine Estates
Telstra Corporation Limited
Current, appointed 22 April 2024
Current, appointed 1 November 2019
Current, appointed 1 May 2023
Ceased, appointed 1 July 2008 and ceased 17 October 2023
Doug Parker
Qantas Airways Limited
Current, appointed 23 May 2023
Todd Sampson
Qantas Airways Limited
Current, appointed 25 February 2015
Dr Nora
Scheinkestel
Qantas Airways Limited
Brambles Limited
Origin Energy Limited
Westpac Banking Corporation
Current, appointed 1 March 2024
Current, appointed 1 June 2020
Current, appointed 4 March 2022
Current, appointed 1 March 2021
Dr Heather Smith Qantas Airways Limited
ASX Limited
Challenger Limited
Current, appointed 24 August 2023
Current, appointed 29 June 2022
Current, appointed 20 January 2020
Antony Tyler
Qantas Airways Limited
Current, appointed 26 October 2018
QUALIFICATIONS AND EXPERIENCE OF EACH PERSON WHO HELD OFFICE AS A COMPANY SECRETARY OF QANTAS
BETWEEN 1 JULY 2023 UNTIL THE DATE OF THIS REPORT
Andrew Finch –
Company Secretary
– BCom, LLB (UNSW), LLM (Hons I) (USYD), MBA (Exec) (AGSM)
– Appointed as Company Secretary on 31 March 2014
– Joined Qantas on 1 November 2012
– 2002 to 2012 – Mergers and Acquisitions Partner at Allens, Sydney (previously Allens Arthur
Robinson and Allen & Hemsley)
– 1999 to 2001 – Managing Associate at Linklaters, London
– 1993 to 1999 – Various roles at Allens, Sydney, including Senior Associate (1997 to 1999) and
Solicitor (1993 to 1997)
– Admitted as a solicitor of the Supreme Court of NSW in 1993
Benjamin Jones –
Company Secretary
– LLM (USYD), LLB, BSocSci (Policy) (UNSW)
– Appointed as Company Secretary on 20 July 2021
– Joined Qantas on 9 September 2013
– Admitted as a solicitor of the High Court of Australia and the Supreme Court of NSW in 2008
– 2008 to 2013 – Solicitor at Herbert Smith Freehills
– 2013 to present – Football Australia, Disciplinary and Ethics Committee Member
– 2013 to present – Football NSW, General Purposes Tribunal (Deputy Chair 2018 to present)
Benjamin Elliott –
Company Secretary
– BBC, GIA (Affiliated)
– Appointed as Company Secretary on 18 February 2020
– Joined Qantas on 14 August 2013
– 2021 to present – Head of Secretariat and Corporate Governance
– 2018 to 2021 – Manager, Group Secretariat
– 2014 to 2018 – Manager, Corporate Governance
– 2013 to 2014 – Manager, Public Company
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
29
DIRECTORS’ INTERESTS AND BENEFITS
Particulars of Directors’ interests in the issued capital of Qantas at the date of this Report are as follows:
Directors
Number of Shares
2024
20231
Richard Goyder
240,7462
225,5542
John Mullen
–
n/a
Vanessa Hudson
1,103,3394, 5
818,2513
Belinda Hutchinson
76,9512
69,9722
Doug Parker
100,000
–
Todd Sampson
45,6192
42,7392
Dr Nora Scheinkestel
56,058
n/a
Dr Heather Smith
10,000
n/a
Antony Tyler
52,000
52,000
1 Shares held as at date of 2023 Annual Report (20 September 2023).
2 Includes restricted ordinary shares held by the Employee Share Plan Trust.
3 Includes restricted ordinary shares awarded in relation to the 2021-2023 Long Term Incentive Plan (LTIP) held in Employee Share Plan Trust that remain subject
to an additional one-year trading restriction.
4 Includes restricted ordinary shares awarded in relation to the 2022-2024 Long Term Incentive Plan (LTIP) held in Employee Share Plan Trust that remain
subject to an additional one-year trading restriction.
5 Shares awarded under the 2022/23 STIP are subject to a two-year deferral period and one-year trading restriction until after the release of the 2025/26 full-year
financial results. Shares awarded under the 2023/24 STIP are subject to a two-year deferral period and one-year trading restriction until after the release of the
2026/27 full-year financial results.
Rights held in trust under the Non-Executive Director Fee Sacrifice Share Acquisition Plan1:
Directors
Number of Rights
20242
20233
Richard Goyder
–
15,192
John Mullen
12,859
–
Belinda Hutchinson
4,871
6,979
Todd Sampson
1,662
2,880
Dr Heather Smith
8,629
–
1 Refer to page 62 for information regarding the operation of the Non-Executive Director Fee Sacrifice Share Acquisition Plan.
2 Rights held as at date of 2024 Annual Report (12 September 2024).
3 Rights held as at date of 2023 Annual Report (20 September 2023).
In addition to the direct interests shown, indirect interests in Qantas shares held in trust on behalf of Ms Vanessa Hudson at
the date of this Report are as follows:
Rights granted under:
Number of Rights
20241
20232
2022-2024 Long Term Incentive Plan
–3
208,000
2023-2025 Long Term Incentive Plan
223,5004
223,5004
2024-2026 Long Term Incentive Plan
335,0005
–
Total Rights
558,500
431,500
1 Rights held as at date of 2024 Annual Report (12 September 2024).
2 Rights held as at date of 2023 Annual Report (20 September 2023).
3 Following the testing of performance hurdles as at 30 June 2024 and the Board’s approval of the 2022-2024 LTIP vesting outcome on 28 August 2024, 86.11 per
cent of the 2022-2024 LTIP awarded to Ms Hudson vested and converted to 179,108 shares (28,892 lapsed). The shares awarded remain subject to an
additional one-year trading restriction.
4 Performance hurdles will be tested as at 30 June 2025 to determine whether any Rights vest to Ms Hudson.
5 Performance hurdles will be tested as at 30 June 2026 to determine whether any Rights vest to Ms Hudson.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
30
PERFORMANCE RIGHTS
Performance Rights are awarded to select Qantas Group Executives under the Qantas Long Term Incentive Plan (LTIP).
Refer to pages 47 to 49 for further details.
The Recovery and Retention Plan was announced in the second half of the 2021/22 financial year and includes a grant of
Rights to eligible employees (both Non-Executive and Executive) subject to both performance and service conditions.
The following table outlines the movements in Rights during the year:
Performance Rights Reconciliation
Number of Rights
2024
2023
Rights outstanding as at 1 July
62,038,284
61,194,044
Rights granted during the year
2,631,000
5,792,250
Rights forfeited during the year
(2,609,210)
(2,655,176)
Rights vested and converted to shares during the year
(52,205,307)
(1,143,343)
Rights lapsed during the year
(1,040,500)
(1,149,491)
Rights outstanding as at 30 June
8,814,2671
62,038,284
1 The movement of Rights outstanding as at 30 June 2024 to the date of this Report is explained in the footnotes of the table below.
Rights will be converted to Qantas shares to the extent performance hurdles have been achieved. The Rights do not allow
the holder to participate in any share issue of Qantas. No dividends are payable on Rights. The fair value of Rights granted is
calculated at the date of grant using a Monte Carlo model and/or Black-Scholes model.
The following Rights were outstanding and unvested at 30 June 2024:
Name
Testing Period
Grant Date Value at Grant Date
Number of Rights
2024
2023
2018–2020
Long Term Incentive Plan1
30 Jun 20
27 Oct 17
$3.30
–
687,000
2019–2021
Long Term Incentive Plan1
30 Jun 21
26 Oct 18
$2.33
–
651,000
2020–2022
Long Term Incentive Plan1
30 Jun 22
26 Oct 19
$3.59
–
743,000
2021–2023
Long Term Incentive Plan2
30 Jun 23
11 Sep 20
$2.24
–
8,210,480
2021–2023
Long Term Incentive Plan3
30 Jun 23
23 Oct 20
$3.07
–
1,349,000
2022–2024
Long Term Incentive Plan
30 Jun 24
17 Sep 21
$3.90
2,766,789
3,087,900
2022–2024
Long Term Incentive Plan
30 Jun 24
5 Nov 21
$3.85
626,110
861,000
2023–2025
Long Term Incentive Plan
30 Jun 25
4 Nov 22
$4.24
3,113,337
4,273,500
2024–2026
Long Term Incentive Plan
30 Jun 26
3 Nov 23
$3.13
2,308,031
–
2022–2023
Recovery Retention Plan2
30 Jun 23
28 Feb 22
$4.98
–
40,752,904
2022–2023
Recovery Retention Plan2
30 Jun 23
4 Nov 22
$5.92
–
1,422,500
Total
8,814,267
62,038,284
1
After agreeing in previous years to defer the decision of vesting of Rights awarded under the 2018-2020 LTIP, 2019-2021 LTIP and the 2020-2022 LTIP, the
former CEO elected to convert these Rights to shares in August 2023. Based on the testing of performance hurdles as at the end of the relevant financial year of
each LTIP and the Board’s approval of the vesting outcome of the respective LTIP, 50 per cent of the 2018-2020 LTIP, 50 per cent of the 2019-2021 LTIP and 50
per cent of the 2020-2022 LTIP awarded to Mr Joyce vested and converted to shares after the release of the 2022/23 financial results.
2 Following the testing of performance hurdles as at 30 June 2023 and the Board’s approval of the 2021-2023 LTIP and the 2022-2023 RRP vesting outcome on
23 August 2023, 100 per cent of Rights vested and converted to shares. The shares awarded under the 2021-2023 LTIP remain subject to an additional one-year
trading restriction.
3 On 8 August 2024, under forfeiture provisions that apply to the LTIP, the Board determined that all the restricted shares held on behalf of the former CEO in
relation to the 2021-2023 LTIP would be forfeited (1,349,000 restricted shares).
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
31
COVER LETTER TO THE REMUNERATION REPORT
Dear Shareholder
2023/24 was a year of challenge, change and recovery for Qantas. Operational and reputational issues led to changes in
Executive leadership and at Board, and resulted in shareholders voting against our 2023 Remuneration Report. Against this
backdrop, the Qantas Board and Management team, under Ms Hudson’s leadership, committed to rebuilding trust with our
customers and people while also delivering financial performance and maintaining a strong balance sheet. We made
progress in getting the balance right and we continue our efforts as set out in this Report.
Understanding reasons for the first strike
The message was clear. Many of our shareholders and their advisors considered that the remuneration outcomes were
inappropriate in light of operational performance, governance issues, and the reputational impacts of the actions and
decisions leading to the Australian Competition and Consumer Commission (ACCC) proceedings and the Ground Handlers
High Court outcome.
The Remuneration Committee has engaged with and listened to the concerns of shareholders and their advisors. We have
supported the Board by benchmarking our remuneration structure and have made changes to better align with ASX market
practice and shareholder expectations. These are referred to below and detailed further in this Report. We have assisted the
Board in finalising the outstanding remuneration outcomes for the 2022/23 financial year and implemented new processes
to support the Board in reviewing performance and determining remuneration outcomes for the 2023/24 financial year.
Finalising remuneration consequences for 2022/23
First, we needed to finalise variable remuneration outcomes for the former CEO and affected Executives for 2022/23.
As reported in last year’s Remuneration Report, the Board exercised its discretion to reduce the Customer target outcome
from 2 out of 20 to zero, and then further reduced the 2022/23 Short Term Incentive Plan (STIP) assessed outcomes by
20 per cent for the Chief Executive Officer (CEO) and direct reports to the CEO (Executive Management) in place during the
year ending 30 June 2023. In addition, given the initiation of the ACCC proceedings advised to Qantas on 31 August 2023
and the Ground Handlers High Court finding on 13 September 2023, the Board decided to defer the delivery and final
determination of the 2022/23 STIP award. The Board has now reviewed all relevant circumstances to finalise these matters
(the Governance Review).
The events that damaged Qantas and its reputation and caused considerable harm to relationships with customers,
employees and other stakeholders were due to a number of factors. As part of a settlement with the ACCC, Qantas has
admitted to misleading customers in relation to flight cancellation processes and – subject to Federal Court approval – will
pay a $100 million penalty. Qantas has also agreed to a $20 million customer remediation program. Penalties and
compensation arising from breaches of the Fair Work Act in the Ground Handlers High Court finding are still to be
determined.
The Board announced on 8 August 2024 that it had determined that the 2022/23 STIP outcome for the former CEO and
accountable Executive Management would be reduced by 33 per cent (inclusive of the previously announced 20 per cent
reduction). The reduction was implemented in relation to the deferred share component. In addition, under forfeiture
provisions that apply to the Long Term Incentive Plan (LTIP), the Board determined that all shares held on behalf of the
former CEO in relation to the 2021-2023 LTIP would be forfeited. In reaching these decisions, the Board considered the
individual and collective accountability of Executive Management, and in addition, the individual overall accountability and
responsibility of the former CEO for the outcomes of the business.
These adjustments result in a total reduction of 2022/23 STIP for accountable current and former Members of the then
Group Management Committee (including the former CEO, Executive Management who are Key Management Personnel
(KMP), and other direct reports to the CEO) of $4.1 million, and a further reduction of $8.36 million (applying the 30 June
2023 share price of $6.20) in relation to the former CEO’s 2021-2023 LTIP.
While there were no findings of deliberate wrongdoing, the Governance Review found that mistakes were made by the Board
and Management which contributed to the Group’s significant reputational and customer service issues. The remuneration
outcomes for the CEO and Executive Management are as noted above. The Board has also taken accountability for its role
and the current ongoing Non-Executive Directors who were on the Board at the time will take a 33 per cent reduction to their
Directors’ base fees in 2024/25.
Acting on shareholder feedback in 2023/24
Secondly, we have already implemented changes in 2023/24 in response to shareholder concerns:
– Governance on share trading and the minimum shareholding requirements of the CEO and Executive Management have
been tightened;
– Terms and conditions of the LTIP have been amended to provide for greater exercise of Board discretion, commencing
with the 2024-2026 LTIP, consistent with like conditions in the STIP;
– Increased weighting of the Customer component from 20 to 30 per cent in the Group Scorecard;
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT
32
– Introduction of an equally weighted third performance measure focused on Reputation in the 2024-2026 LTIP requiring
the Group to restore its reputation under the RepTrak survey to a ‘Strong to Excellent’ rating by the end of the three-year
performance period; and
– Enhanced transparency and disclosure in our Remuneration Report, including full transparency on the Group Scorecard
performance measures, targets and outcomes.
Changes for 2024/25
In addition to the above, we will also make the following changes in 2024/25:
– Removal of the Individual Performance Factor (IPF) and adoption of a more transparent Balanced Scorecard incorporating
both Group and Individual objectives to assess CEO and Executive Management performance; and
– Increasing the proportion of STIP delivered in shares from one-third to 50 per cent, with the vesting of the shares deferred
for two years. The additional one-year holding lock has been discontinued.
One of the recommendations of the Governance Review released on 8 August 2024 was an expansion of the charter of the
Remuneration Committee to become the People and Remuneration Committee, which will allow the Committee to dedicate
time to issues such as employee engagement, talent attraction and retention, and frameworks designed to reinforce desired
culture, principles and values. This has been implemented effective 28 August 2024.
Remuneration outcomes in 2023/24
We now turn to this year’s remuneration outcomes. 2023/24 was a year of recovery and reset.
We achieved an Underlying PBT of $2.08 billion and delivered a Total Shareholder Return (TSR) of 21.65 per cent.
The Underlying PBT was a strong result, only exceeded in Qantas Group history by the 2022/23 outcome, but from a Group
Scorecard perspective was just below our target. Significant effort was dedicated to restoring trust with customers and
employees. This took many forms, including delivering on operational performance, finalising 11 Enterprise Agreements, and
the design and delivery of key training programs that underpin our strategy to create a safe and inclusive culture and
reinforce the critical role of leaders at all layers of the organisation. This included the delivery of Inclusive Leadership
Essentials for our 1,400 People Leaders, Frontline Leadership Development across Cabin Crew, Airports, Engineering and
Flight Operations and the implementation of our Culturally Inclusive Service Training for customer-facing employees. This
work was reflected in lifting our On-Time Performance (OTP), which correlates strongly with our improved Net Promoter
Score (NPS) results. We maintained our operational safety record which we continue to hold as our highest priority, but we
did not reach our challenging workplace safety improvement targets. Pleasingly, we did make further progress on our
climate goals, exceeding our emissions reduction target, and reducing the amount of waste sent to landfill.
Variable remuneration
The overall 2023/24 Group Scorecard result achieved a below target outcome of 99.1 per cent out of a maximum possible
outcome of 175 per cent. However, the Board considered that while significant progress has been made on a number of
fronts, the result should be adjusted down to a final outcome of 95 per cent to reflect that we are only part way through
restoring trust with our key stakeholders. In particular, while the Group achieved NPS scores at or above ‘overdrive’ level, the
Board is conscious that this may not yet be representative of all our customers’ experiences.
The Group Scorecard outcome is then modified for the CEO and each member of Executive Management by their IPF. CEO
and Executive Management final STIP outcomes ranged from 86 per cent to 105 per cent of target STIP opportunity.
The 2022-2024 LTIP achieved a partial vesting of 86.11 per cent. The Group achieved a relative TSR ranking of 3rd of the 17
airlines in the global airline peer group and a ranking of 36th against the ASX100 peer group.
Changes to KMP
Board renewal during 2023/24 resulted in the retirement of three Non-Executive Directors and the appointment of two new
Non-Executive Directors. Chair Richard Goyder will retire on 16 September 2024 and John Mullen will assume the Chair.
Other changes to the Executive and Non-Executive KMP are set out in the table on page 35.
We encourage you to read the 2024 Remuneration Report in full and welcome your feedback.
Dr Nora Scheinkestel
Chair, People and Remuneration Committee
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (CONTINUED)
33
REMUNERATION REPORT CONTENTS
1
Key Management Personnel
35
2
Response to Strike Against the 2023 Remuneration Report
36
3
Overview of the Executive Remuneration Framework Outcomes for 2023/24
38
4
Group Scorecard Outcome 2023/24
39
5
Long Term Incentive Plan Outcome 2022-2024
44
6
Executive Remuneration Structure for 2023/24
45
7
Actual Remuneration Outcomes for 2023/24
51
8
Statutory Remuneration Disclosures for 2023/24
53
9
Remuneration Governance
55
10
Summary of Key Contract Terms as at 30 June 2024
56
11
Equity Instruments
57
12
Non-Executive Director Fees
60
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
34
1
KEY MANAGEMENT PERSONNEL
The remuneration of Key Management Personnel (KMP) – the CEO, direct reports to the CEO (Executive Management) and
Non-Executive Directors – is disclosed in this Report, including former KMP that ceased employment in 2023/24. KMP is
defined as those persons having authority and responsibility for planning, directing, and controlling the activities of an
entity, directly or indirectly, including any director (whether Executive or otherwise) of that entity.
Name
Position
Term as KMP
Current Executive KMP
Vanessa Hudson
CEO
Full Year
(previously Chief Financial Officer and
CEO Designate until 5 September 2023)
Andrew Glance
CEO Qantas Loyalty
From 1 March 2024
Rob Marcolina
Group Chief Financial Officer
From 6 September 2023
Markus Svensson
CEO Qantas Domestic
From 1 October 2023
Stephanie Tully
CEO Jetstar Group and Jetstar Airways
Full Year
Cameron Wallace
CEO Qantas International and Freight
Full Year
Former Executive KMP
Alan Joyce
CEO
Ceased 5 September 2023
Andrew David
CEO Qantas Domestic
Ceased 29 September 2023
Olivia Wirth
CEO Qantas Loyalty
Ceased 16 April 2024
Current Non-Executive Directors
Richard Goyder
Chair
Full Year
John Mullen
Non-Executive Director and Chair-Elect
Commenced 22 April 2024
Belinda Hutchinson
Non-Executive Director
Full Year
Doug Parker
Non-Executive Director
Full Year
Todd Sampson
Non-Executive Director
Full Year
Dr Nora Scheinkestel
Non-Executive Director
Commenced 1 March 2024
Dr Heather Smith
Non-Executive Director
Commenced 24 August 2023
Antony Tyler
Non-Executive Director
Full Year
Former Non-Executive Directors
Maxine Brenner
Non-Executive Director
Ceased on 22 February 2024
Jacqueline Hey
Non-Executive Director
Ceased on 22 February 2024
Michael L’Estrange
Non-Executive Director
Ceased on 3 November 2023
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
35
2
RESPONSE TO STRIKE AGAINST THE 2023 REMUNERATION REPORT
Following the strike against our 2023 Remuneration Report, the Board engaged extensively with major shareholders and
proxy advisors to understand the key concerns with our remuneration framework, strategy and governance. Set out below is
a summary of concerns and the Board’s responses:
Implemented in 2023/24
The 2022/23 remuneration
consequences for the former CEO and
Executive Management arising from
the impact on Qantas’ reputation were
not sufficient.
The Board has now finalised and disclosed the remuneration consequences for the
former CEO and accountable Executive Management for 2022/23, which included;
–
a reduction in the 2022/23 STIP outcome for the former CEO and accountable
Executive Management by 33 per cent (inclusive of the previously announced 20
per cent reduction), and;
–
forfeiture of 100 per cent of restricted shares of the former CEO in relation to the
2021-2023 LTIP.
Page 37
CEO remuneration levels are too high.
The remuneration level for the new CEO was rebased to a lower level while still
ensuring it is a fair and market competitive package. Base Pay was set 26 per cent
lower than the former CEO and 36 per cent lower in terms of Maximum Total
Remuneration.
Page 56
CEO performance objectives are not
disclosed.
The CEO’s performance objectives are disclosed with commentary on performance.
Page 42
STIP targets and performance are not
disclosed.
Qantas published a fully transparent Group Scorecard, with performance measures,
targets and outcomes.
Page 39
The Group did not appropriately
balance Employee, Customer and
Shareholder expectations, leading to
reputational impacts.
Qantas increased the weighting to Customer measures in the Group Scorecard for
2023/24 to 30 per cent and introduced a Reputation measure in the LTIP.
Pages
39 & 47
The Board has limited discretion on
LTIP vesting.
The Board has amended the terms and conditions to increase discretion, commencing
with the 2024-2026 LTIP.
Page 48
The former CEO sold a number of
shares on-market during his tenure and
went below the minimum shareholding
guideline.
The Board has enhanced governance of the Minimum Shareholding Guidelines (MSG),
tightened approval processes, and implemented rules which do not allow Executives
to sell down their holdings below the guideline once they have achieved it (other than
to meet any tax obligations or in the event of severe financial hardship).
Page 49
To be implemented in 2024/25
The Individual Performance Factor
(IPF) in the STIP calculation is not
common ASX practice. Its application
was not differentiated, and was opaque.
The IPF has been removed. A Balanced Scorecard will be used for the CEO and
Executive Management that will include a mix of Group financial and non-financial
performance measures (Group Scorecard) and individual objectives. The Group
Scorecard with targets and outcomes will be disclosed in the Remuneration Report.
Page 50
Many ASX100 companies defer 50 per
cent of STIP to shares.
The proportion of STIP deferred into shares has been increased from one third to
50 per cent, deferred for two years, commencing in 2024/25. The additional one-year
holding lock has been removed. Ongoing alignment with shareholders is achieved by
compliance with the MSG.
Page 50
Not changed
The relative TSR measures in the LTIP
do not have a positive TSR gate to
vesting.
Positive TSR gates are not common ASX market practice. The addition of Board discretion in the
LTIP Terms and Conditions enables the Board to control vesting outcomes and ensure that they
are appropriate.
Qantas uses two relative TSR measures
in the LTIP.
The two relative TSR measures in the LTIP are still considered the appropriate measures. More
details are provided on the relative TSR measures in Section 6.
A third measure has been added commencing with the 2024-2026 LTIP with the inclusion of
Reputation, with all three measures now having an equal one third weighting. The Board has also
amended the terms and conditions to increase discretion.
Post-employment travel benefits for
Executives and Non-Executive
Directors are not common ASX
practice.
A review of airline industry practice was conducted which found that travel benefits are broadly
consistent with those provided by competitor airlines.
Concern
Response
Details
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
36
SUMMARY OF REMUNERATION DECISIONS ON 2022/23 STIP
The Board announced on 8 August 2024 that it had determined that the 2022/23 STIP outcome for all accountable
Executive Management would be reduced by 33 per cent (inclusive of the previously announced 20 per cent reduction). The
reduction was implemented through a reduction in the deferred share component. In reaching these decisions, the Board
considered the individual and collective accountability of members of the Group Management Committee. The Board also
took into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline
through that period. The combination of these factors is reflected in the reduction in the 2022/23 STIP.
In addition, under forfeiture provisions that apply to the LTIP, the Board determined that all the restricted shares held on
behalf of the former CEO in relation to the 2021-2023 LTIP would be forfeited. This reflects his overall accountability and
responsibility as CEO for the outcomes of the business.
These adjustments result in a total reduction of the 2022/23 STIP for accountable current and former Members of the Group
Management Committee (including the former CEO and Executive Management) of $4.1 million, and a further reduction of
$8.36 million (applying the 30 June 2023 share price of $6.20) in relation to the former CEO’s 2021-2023 LTIP.
The impact from a remuneration perspective is set out in the following tables.
Actual Annual Incentive Outcome for 2022/23 – Former CEO
$'000s
Calculated
2022/23 STIP
Outcome
33%
Downward
Adjustment
STIP Award
after
Adjustment
STIP Cash
Bonus1
STIP Deferred
Shares2
Total STIP
Received as a
% of Maximum
Opportunity
Total STIP
Forfeited as a
% of Maximum
Opportunity
Alan Joyce
2,734
(902)
1,832
1,591
241
42 %
58 %
1 Paid 9 August 2024.
2 Shares awarded under the 2022/23 STIP were allocated to participants on 8 August 2024, and are subject to a one-year deferral period until August 2025 and a
further one-year trading restriction until August 2026.
Long Term Incentive Plan Outcome for 2022/23 – Former CEO
Number of Shares Awarded Under
the 2021-2023 LTIP
Number of Shares Forfeited
Value of Shares Forfeited1
$’000
Alan Joyce
1,349,000
(1,349,000)
8,364
1 Interest in shares, as disclosed in the 2023 Remuneration Report, as at 30 June 2023 multiplied by the Qantas share price of $6.20 at 30 June 2023.
Actual Annual Incentive Outcome for 2022/23 – Executive Management
$'000s
Calculated
2022/23 STIP
Outcome
33%
Downward
Adjustment
STIP Award
after
Adjustment
STIP Cash
Bonus1
STIP Deferred
Shares2
Total STIP
Received as a
% of Maximum
Opportunity
Total STIP
Forfeited as a
% of Maximum
Opportunity
Current Executives
Vanessa Hudson
1,270
(419)
851
672
179
49 %
51 %
Rob Marcolina
commenced as KMP
6 September 2023
874
(289)
585
462
123
42 %
58 %
Markus Svensson
commenced as KMP
1 October 2023
668
(220)
448
354
94
40 %
60 %
Stephanie Tully
880
(290)
590
466
124
44 %
56 %
Former Executives
Andrew David
ceased as KMP
29 September 2023
1,112
(367)
745
588
157
44 %
56 %
Olivia Wirth
ceased as KMP
16 April 2024
963
(318)
645
509
136
45 %
55 %
1 Paid 9 August 2024.
2 Shares awarded under the 2022/23 STIP were allocated to participants on 8 August 2024, and are subject to a one-year deferral period until August 2025 and a
further one-year trading restriction until August 2026.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
37
3
OVERVIEW OF THE EXECUTIVE REMUNERATION FRAMEWORK OUTCOMES FOR 2023/24
Qantas’ incentive awards have historically been strongly tied to financial performance. Prior year incentive plan outcomes
show the variability driven by actual performance and/or Board discretion. The 2023/24 STIP outcome reflects a more
balanced Scorecard approach. 2022-2024 LTIP outcomes continue to reflect relative TSR outcomes against our two
comparator groups.
QANTAS’ FINANCIAL PERFORMANCE HISTORY
In addition to the Underlying PBT graph above, the following graphs outline a five-year history of key financial metrics:
Statutory Earnings Per Share
(129.6)
(89.9)
(45.6)
96.0
75.9
2019/20
2020/21
2021/22
2022/23
2023/24
(150)
(120)
(90)
(60)
(30)
0
30
60
90
120
Operating Cash Flow ($M)
1,083
(386)
2,670
5,085
3,441
2019/20
2020/21
2021/22
2022/23
2023/24
(800)
0
800
1,600
2,400
3,200
4,000
4,800
5,600
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
38
1 The Board applied its discretion and determined that the 2019/20 and
2020/21 Group Scorecard Outcome was zero.
2 The Board determined that the STIP would not operate in 2021/22. This
was replaced by the Recovery Retention Plan (RRP) which paid out in full.
3 Underlying PBT is the primary reporting measure used by the Qantas
Group’s Chief Operating Decision-Making bodies, being the CEO, Group
Leadership Team and the Board, for the purpose of assessing the
performance of the Group. Statutory Profit/(Loss) After Tax for 2023/24
was $1,251 million (2023: $1,744 million; 2022: ($860) million; 2021:
($1,692) million; and 2020: ($1,964) million).
1 TSR Performance applying the LTIP performance test methodology (which
uses the average closing share price over the six months preceding the test
date of 30 June).
Qantas Three-Year Total Shareholder Return
(TSR) Performance and LTIP Vesting Outcome
(11)
(16)
(3)
71
22
TSR (%)
LTIP Vesting Outcome (%)
2019/20
2020/21
2021/22
2022/23
2023/24
(40)
(20)
0
20
40
60
80
100
Underlying Profit Before Tax (PBT) ($M)
and Group Scorecard Outcome
124
(1,774)
(1,859)
2,465
2,078
Underlying PBT ($M)
Group Scorecard Outcome (%)
2019/20
2020/21
2021/22
2022/23
2023/24
(2,500)
(2,000)
(1,500)
(1,000)
(500)
—
500
1,000
1,500
2,000
2,500
3,000
(100)%
(80)%
(60)%
(40)%
(20)%
—%
20%
40%
60%
80%
100%
120%
140%
1 Statutory Basic Earnings/(Loss) Per Share (cents).
1
Executive Management
STIP outcomes
CEO’s 2023/24 STIP
outcome
Vesting of the
2022-2024 LTIP
86% to 105%
Range of STIP outcomes as a
percentage of target, or 37% to
52% of maximum
100%
as a % of target or 62% of
maximum
86.11%
4
GROUP SCORECARD OUTCOME 2023/24
The 2023/24 Group Scorecard (for the purposes of STIP determination) included the following measures of financial and
operational performance which the Board considers to be critical indicators of performance and drivers of shareholder
value. The table below summarises performance versus threshold, target and overdrive for each Scorecard category. For
the CEO and Executive Management, the Scorecard outcome is supplemented by the IPF which assesses what an individual
has achieved and how they went about it (their conduct and behaviours).
Category
(Outcome Range) Weighting Measures
Targets and Outcome
Comment
Threshold
Target
Overdrive
Actual
Outcome
Group Financial
Measure
(0-87.5%)
50%
Underlying PBT
($ billion)
1.9
2.25
2.6
37.7%
The Underlying PBT less transformation costs
result of $2,078 million for 2023/24 was below
the target set by the Board.
Customer
(0-52.5%)
30%
Net Promoter Score
(NPS):
48.7%
Qantas Airlines
13
16
18
Customer satisfaction for Qantas Airlines and
Jetstar Domestic was above target as a result of
the increased investment and persistent focus
on the Customer Recovery Plan during the year.
Jetstar Domestic
7
10
13
Punctuality (months)
8
10
12
Qantas Domestic and QantasLink
outperformed Virgin’s on-time performance
rate in 11 out of 12 months, exceeding target.
Operational and
Workplace
Safety
(0-26.25%)
15%
Board's assessment of
Operational Safety
7.5%
Operational Safety performance for the year
was strong, resulting in full achievement.
Workplace Safety
measures percentage
improvement
(Events per million
hours worked):
Total Recordable Injury
Frequency rate (TRIFR)
19
16.5
14
0%
We failed to meet Workplace Safety percentage
improvement targets across TRIFR and
LWCFR. Further details are provided overleaf.
Lost Workcase
Frequency rate
(LWCFR)
10
8.7
7.4
Climate
(0-5.25%)
5%
CO2 emissions
reductions (tonnes)
28,000
31,600
37,400
5.2%
The Group delivered emissions reductions
totalling 32,700 tonnes CO2e, exceeding the
target of 31,600 tonnes CO2e.
Financial contribution
from Business to
Business (B2B) Offsets
and sustainable
aviation fuel (SAF)
3.9
4.3
4.7
The Group delivered $4.3 million in B2B Offsets
and SAF programs.
Waste to landfill
reduction:
10
11
12
Deployment of inflight recycling at an
additional 11 Jetstar Domestic ports.
Jetstar Domestic
5
6
7
Deployment of inflight recycling at an
additional six Qantas Domestic ports.
Qantas Domestic
9
10
11
8 per cent increase in diversion of on campus
waste from landfill did not reach threshold.
Qantas Domestic
campuses
2023/24 Group
Scorecard
Outcome
(0-175%)
100%
Scorecard result before Board exercised discretion
99.1%
The Board’s view was that significant progress
has been made on a number of fronts, tempered
by the fact that this was a recovery year for the
Group and much remains to be done; as a result,
a discretionary discount was applied to the
calculated result.
Scorecard result after Board exercised discretion
95%
Scorecard result out of a maximum possible Scorecard outcome
54%
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
39
2.08
20
13
11
21.3
11.2
32,700
4.3
11
6
8
Performance Assessment of 2023/24 Group Scorecard Measures
Group Financial
Measure
The Underlying PBT result for 2023/24 was $2,078 million, compared to Target of $2,250 million and a
2022/23 outcome of $2,465 million.
Underlying PBT reflected an increase in flying activity offset by an unfavourable year-on-year Revenue
Airline Seat Kilometre (RASK) performance, largely driven by International as competitor capacity returns
to pre-COVID levels, increased investment in Customer initiatives, as well as a decline in Freight markets,
particularly in the first half of financial year 2023/24. Group Transformation benefits continue to offset CPI.
Customer
The investment and persistent focus on the Customer Recovery Plan resulted in a significant uplift for
Qantas Airline NPS, with both Domestic and International networks seeing improvement over 2023/24,
particularly in the last quarter driven by stronger OTP. Jetstar also improved its operational performance
through targeted investment while ensuring it remained true to its low-cost DNA. This resulted in both
Qantas Airline and Jetstar NPS exceeding target.
OTP is a crucial driver of NPS and customer satisfaction. The Group focused on minimising delays and
cancellations and on delivering exceptional service at every touchpoint of the customer journey – ensuring
consistency and reliability – training and empowering frontline staff to handle and resolve issues
effectively.
Operational
and Workplace
Safety
Operational Safety performance is assessed against outcome-based measures (including operational
occurrences that pose a significant threat to the safety of employees and customers) and risk-based lead
indicators commonly associated with aviation industry accidents. These measures include mandatory and
non-mandatory reporting rates, hard alert rates and technical dispatch reliability. The Qantas Group has
delivered strong performance this year equivalent to meeting performance overall, and exceeding
performance in hard alert rate and technical dispatch reliability.
The Group failed to meet the Workplace Safety percentage improvement targets, which were based off
abnormally low rates of injury which occurred during COVID (from much reduced flying), followed by
volatility in injury frequency rates during the subsequent recovery. Volatility in both injury claims and
hours worked (the measures of injury frequency rate) made it difficult to estimate the impact and the
degree of ambition embedded. In addition, improvements in streamlining claims processes resulted in an
increased rate of injury conversion to claims.
In the targeted improvements for 2023/24 there were actually fewer total injuries recorded by many work
groups. The Group has increased confidence in our target setting process for 2024/25 as the volatility has
somewhat reduced and the Group has continued to identify opportunities to improve performance.
Climate
The emissions reduction target is met from the use of sustainable aviation fuel (SAF) and operational
efficiency initiatives to reduce fuel burn. Operational efficiency emissions reduction was below target,
mostly due to lower uptake of key initiatives like single engine taxi out and use of ground power units
(GPU) instead of auxiliary power units (APU). SAF volumes, however, delivered a greater level of
greenhouse gas emission reduction (~90 per cent) than contracted (80 per cent).1
The Group met our financial contribution target through business to business (B2B) products involving
SAF, such as the SAF Corporate Coalition, and offsets. The SAF Corporate Coalition achieved revenue of
$3.3 million (versus target of $4 million) based on 11 corporate members across the two membership tiers.
Qantas Future Planet program margin also over delivered versus target ($1 million versus $0.3 million) due
to flagship customers Atlas and Australia Post, leading to total program mitigations of $4.3 million in line
with target.
The Group also achieved our target for waste to landfill reduction through inflight recycling to additional
Qantas and Jetstar ports. However, Mascot campus waste diversion performance was below target despite
a range of initiatives (e.g. hand dryers replacing paper towels and coffee cup recycling).
1 The target was based on the contracted obligation of a minimum of 80 per cent emissions reduction in the SAF provided, required as part of the deal with the
fuel suppliers. The actual SAF provided was certified at a higher emissions reduction level.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
40
Why did Qantas select the performance measures in the 2023/24 Group Scorecard?
Group
Financial
Measure
Underlying PBT is the primary financial performance measure for the Qantas Group and therefore the
primary performance measure under the STIP. Underlying PBT provides meaningful and consistent
representation of the underlying performance of the Group.
Customer
Delivering exceptional customer service is key to the overall success of the Group which utilises NPS – a
measure of how strongly our customers would promote us – to gauge how we perform. Individual NPS
targets are set for Qantas Airlines and Jetstar Domestic.
Punctuality is a key contributor to customer satisfaction and is a leading measure to drive NPS. OTP is
measured by the Bureau of Infrastructure, Transport and Regional Economics (BITRE), as the number of
flights operating on-time (on an on-time departure basis) as a percentage of the total number of flights
operated.
Operational
and Workplace
Safety
Safety is the Group’s first priority. The Safety, Health, Environment and Security Committee performs an
assessment of both Workplace Safety performance and Operational Safety performance for use in the
Group Scorecard.
The objective of the Workplace Safety targets is to keep our people safe at work and reduce employee
injuries. Targets were set in relation to:
– Total Recordable Injury Frequency Rate (TRIFR)
– Lost Work Case Frequency Rate (LWCFR)
Operational Safety performance is assessed against outcome-based measures (including operational
occurrences that pose a significant threat to the safety of employees and customers) and risk-based lead
indicators commonly associated with aviation industry accidents, such as flight data trends, technical
dispatch reliability and reporting rates.
The Board retains an overriding discretion to scale down the STIP outcome (or reduce it to zero) in the
event of a material aviation safety incident or in the event where safety outcomes do not meet our
expectations. This ‘safety override’ discretion is in addition to, and does not qualify, the Board’s overall
discretion over STIP awards.
Climate
Qantas is committed to decarbonisation under our Climate Action Plan (CAP). The Scorecard climate
targets are aligned to our interim target of achieving a 25 per cent reduction in net emissions from 2019
levels by 2030 while managing the climate transition in a financially sustainable manner.
They are split into three categories:
– Emissions reduction from the use of SAF and operational efficiency initiatives to reduce fuel burn
– Program mitigation through financial mitigation of the Group’s climate transition through business to
business (B2B) products involving SAF, such as the SAF Coalition, and offsets
– Waste to landfill reduction initiatives.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
41
APPLICATION OF INDIVIDUAL PERFORMANCE FACTOR TO CEO AND EXECUTIVE MANAGEMENT SCORECARD
The IPF for the CEO was determined by the Board based on its assessment of the CEO’s:
– Contribution to achieving the Group Scorecard measures;
– Individual performance against KPIs; and
– Leadership, behaviour, and commitment to good governance.
The KPIs for the CEO covered the following areas:
Culture & Leadership
Ms Hudson undertook renewal of the Executive Team, which included the appointment of a new Chief People Officer,
internal promotions to key airline leadership roles, and increasing female representation on the Group Leadership Team. At
the same time, she developed clear leadership values and an inclusive culture focused on performance. She commenced a
plan to close the gap to frontline team members through visible leadership and established a voice of people survey with
demonstrated listening and acting culture.
Customer & Reputation
Ms Hudson has driven clear actions to address customer pain points, including OTP, Loyalty member redemption access,
and inflight and digital experience. A voice of customer program has also been embedded across all segments to drive
action and continuous improvement. The ACCC legal matter has been progressed to settlement (subject to Federal Court
approval) and the penalties and compensation arising from the breaches of the Fair Work Act in the Ground Handlers High
Court finding are also pending court determination.
Shareholder Focus
Ms Hudson applied disciplined capital allocation, including an on-market share buy-back to the value of $869 million at
30 June 2024, and maintained a strong balance sheet with high liquidity and restructured debt profile with longer tenor.
Enterprise Capability
Under Ms Hudson’s leadership, the Group maintained a world-leading operation and safety risk management system. This
was further enhanced by the creation of the Chief Risk Officer role with enterprise risk management accountability. Risk
appetite assessments have been completed for all key business functions.
Fleet Renewal & Capital Management
The Group’s fleet renewal program is key to the Group meeting operational and sustainability targets in the future.
Ms Hudson delivered strong execution of the new fleet delivery in 2024, maintaining excellent relationships with aircraft
manufacturers and preserving levers for flexibility if needed, and transparently tracked proof points of benefits in investor
updates.
Board Assessment
The Board concluded that the CEO had met and exceeded expectations and assessed her IPF at 105 per cent. IPF scores for
the rest of the Group Leadership Team (including Executive Management who are KMP and other direct reports to the CEO)
ranged between 80 to 110 per cent.
As noted on page 50, 2023/24 will be the last year where an IPF will be used. In 2024/25, the Group will assess performance
based on a Balanced Scorecard incorporating Group and Individual performance objectives.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
42
Annual Incentive Outcomes for 2023/24
The following table outlines the 2023/24 STIP maximum opportunity and outcome for the CEO and Executive Management.
$'000s
Total STIP
Award
STIP Cash
Bonus1
STIP Deferred
Shares2
Total STIP Paid
as a % of Target
Total STIP
Received as a %
of Maximum
Opportunity
Total STIP
Forfeited as a %
of Maximum
Opportunity
Current Executives
Vanessa Hudson
1,541
1,027
514
100 %
62 %
38 %
Andrew Glance3
commenced as KMP
1 March 2024
335
223
112
90 %
37 %
63 %
Rob Marcolina3
commenced as KMP
6 September 2023
626
417
209
86 %
43 %
57 %
Markus Svensson3
commenced as KMP
1 October 2023
663
442
221
100 %
50 %
50 %
Stephanie Tully
734
489
245
105 %
52 %
48 %
Cameron Wallace
616
411
205
90 %
45 %
55 %
Former Executive
Olivia Wirth4
ceased as KMP
16 April 2024
579
386
193
95 %
48 %
52 %
1 To be paid in September 2024.
2 Restricted shares allocated on 6 September 2024.
3 The 2023/24 STIP award shown reflects the full award for Mr Glance, Mr Marcolina and Mr Svensson. This differs to the Statutory Remuneration disclosure
which includes only the remuneration for the period of time in a KMP role.
4 As a good leaver, Ms Wirth was eligible to receive an award of cash and deferred shares pro-rated for the portion of the performance period employed under the
2023/24 STIP.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
43
5
LONG TERM INCENTIVE PLAN OUTCOME 2022-2024
Qantas TSR Performance
Qantas TSR Rank vs Global
Airlines
Qantas TSR Rank vs ASX100
Vesting of 2022-2024 LTIP
22%
3rd
36th
86.11%
The three-year performance measures under the 2022-2024 LTIP are Qantas’ relative TSR compared to:
– A global airline peer group, and
– ASX100 companies.
Qantas’ TSR performance over the past three years ranked 3rd of companies in the global airline peer group and 36th of
companies in the ASX100, resulting in top quartile performance against the global airline peer group and above median
performance against the ASX100. Based on this performance, 86.11 per cent of Rights awarded under the 2022-2024 LTIP
vested and converted to shares which are subject to a further one-year trading restriction. Further detail is provided in
section 6.
Qantas’ Three-Year TSR Performance1 vs Peer Groups (%)
Qantas
Global Airlines
75th Percentile
Global Airline
Median
ASX100
75th Percentile
ASX100
Median
(20)%
0%
20%
40%
1 TSR performance, applying the LTIP performance test methodology (which uses the average closing share price over the six months preceding the test date of
30 June 2024).
Qantas’ Five-Year TSR Performance
Qantas
S&P/ASX100
MSCI World Airlines
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Jun-24
(80%)
(60%)
(40%)
(20%)
0%
20%
40%
60%
80%
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
44
6
EXECUTIVE REMUNERATION STRUCTURE FOR 2023/24
Base Pay
(also referred to
as Fixed Annual
Remuneration)
Base Pay is a guaranteed salary level, inclusive of superannuation. Base Pay for the CEO and Executive
Management is reviewed annually with reference to external market data which best mirrors the size,
complexity, and challenges in managing Qantas’ businesses.
Base Pay (Cash), as disclosed in the remuneration tables, excludes superannuation (which is disclosed as
Post-Employment Benefits) but does include salary sacrifice components such as motor vehicles.
Annual Incentive
STIP Overview
The STIP is the annual incentive plan for the CEO and Executive Management. Each year, Executives may
receive an award that is a combination of cash and deferred shares to the extent that the plan’s
performance conditions are achieved, subject to the exercise of Board discretion.
Calculation of
STIP Awards
STIP Awards are calculated as follows:
STIP
Award =
Base Pay
X
Target
Opportunity
X
Group
Scorecard
Outcome
X
Individual
Performance
Factor
Opportunity
Level
Each STIP participant has a Target and Maximum Opportunity expressed as a percentage of Base Pay:
% of Base Pay
CEO
Executive Management
Target
100%
80%
Maximum
160%
160%
The minimum outcome is nil, which would occur if the threshold level of performance is missed on each
STIP measure, if an individual’s performance does not warrant an award, or if the Board determines that
no award be made. Scorecard items are assessed to a potential maximum of 175 per cent, but the STIP
participant payouts are capped at 160 per cent as set out in the table above. The Scorecard potential
maximum of 175 per cent is being reviewed in 2024/25.
Performance
Conditions –
Group
Scorecard
The Group Scorecard contains a mix of Group financial and non-financial measures.
A detailed description of the 2023/24 Group Scorecard measures and outcomes is provided on pages 39
to 41.
Performance
Conditions –
Individual
Performance
Factor
An individual’s performance is recognised via an IPF. The IPF is a measure of individual performance that
assesses:
– What an individual has achieved
– How they went about it (i.e. their conduct and behaviours).
IPFs are generally in the range of 80 to 120 per cent. However, in the case of underperformance, the IPF
may be zero. In exceptional circumstances the IPF may be as high as 150 per cent.
Details of the CEO’s 2024 IPF outcome are provided on page 42.
Board
Discretion
Board discretion is a key element of the design of the STIP. While the Scorecard is the primary basis for
calculation of the STIP, the Board reserves the right to consider outcomes in the broader context of
Qantas’ overall performance, the operating environment and non-financial considerations.
Delivery of
STIP Awards
Two thirds of the STIP award is paid as a cash bonus, with the remaining one third deferred into Qantas
shares. Deferred shares are subject to:
– A two-year deferral period, and
– A one-year trading restriction which applies both during employment and post-cessation of
employment. Shares subject to the trading restriction remain on foot on cessation of employment but
are subject to forfeiture.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
45
Cessation of
Employment
In general, unless the Board determines otherwise, where an Executive resigns, is terminated for cause or
is terminated in other circumstances involving unacceptable performance or conduct, they forfeit any
right to participate in that year’s STIP and forfeit any shares awarded under prior year STIPs that are
subject to a deferral period.
For shares subject to the additional trading restriction, forfeiture on cessation of employment does not
apply. That is, for any shares awarded under prior year STIPs where the deferral period has been served,
but the shares are subject to the additional trading restriction, the Executive retains those shares subject
to the additional trading restriction.
The additional trading restriction provides the Board with the ability to forfeit vested equity, if required,
even after cessation of employment.
In other circumstances of termination, unless the Board determines otherwise, for example, retirement,
employer-initiated terminations (with no record of poor performance), death or total and permanent
disablement:
– For the current year STIP, provided the Executive worked for a minimum of six months, the Executive
will receive a pro-rated award based on the portion of the performance period that the Executive
served and the actual performance against the performance measures (as determined by the Board
following the end of the performance period).
– For shares awarded under prior year STIPs that are subject to a deferral period, the original deferral
period and additional trading restriction continue to apply and these shares are subject to forfeiture.
Disclosure
In addition to required statutory disclosures, Qantas chooses to disclose the full value of each year’s STIP
award in the Remuneration Outcomes Table on page 51. This involves disclosing both:
– The value of cash awards made
– The full value of deferred shares that were awarded (notwithstanding that these shares are still
subject to a two-year deferral period and a one-year trading restriction).
Disclosure of STIP awards in the Statutory Remuneration Table on page 53 is based on the requirements
of the Corporations Act 2001 (Cth) and applicable Australian Accounting Standards. The STIP awards are
disclosed as either:
– A cash incentive for any cash bonus paid; and/or
– A share-based payment for any component awarded in deferred shares.
Where share-based STIP awards involve deferral over multiple reporting periods, they are reported
against each period in accordance with accounting standards.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
46
Long Term Incentive Plan (LTIP)
LTIP Overview
The LTIP is a four-year plan that involves an upfront award of a fixed number of Rights over Qantas
shares. If performance and service conditions are achieved over a three-year period, Rights vest and
convert to Qantas shares. The vested shares are then subject to a further one-year trading restriction,
during which the shares cannot be traded and are subject to forfeiture.
If the three-year performance conditions or service conditions are not met, the Rights lapse.
Opportunity
Level
Each LTIP participant has a Target Opportunity expressed as a percentage of Base Pay:
% of Base Pay
CEO
Executive Management
Target
160%
95%
The number of Rights awarded is the maximum number of Rights that may vest and convert to Qantas
shares.
The number of Rights awarded is determined by applying the following formula:
Rights
awarded =
Base Pay
X
Target
Opportunity
÷
Face Value of
Right
Performance
Conditions
(2022-2024 and
2023-2025
LTIPs)
The performance conditions and weightings for each of the 2022-2024 LTIP (tested at 30 June 2024)
and 2023-2025 LTIP (to be tested at 30 June 2025) are Qantas’ relative TSR to:
– A global airline peer group (50 per cent); and
– ASX100 companies (50 per cent).
Qantas’ Financial Framework targets top quartile TSR performance relative to global airline peers and
ASX100 companies as these provide a comparison of relative shareholder returns relevant to most
Qantas investors.
At the end of the performance period, the TSR performance of Qantas and each comparator company is
determined based on their average closing share price over the final six months of the three-year
performance period.
The vesting scale for both the ASX100 and the global airline peer groups is as follows:
Qantas TSR Performance Relative to Each Peer Group
Vesting Scale
Below 50th percentile
Nil vesting
50th to 75th percentile
Linear Scale: 50 per cent to 100 per cent vesting
Above 75th percentile
100 per cent vesting
The ASX100 peer group comprises those companies that make up the S&P/ASX100 Index at the
commencement date of the performance period.
The global airline peer group has been chosen for relevance to investors, including investors based
outside Australia, with a primary interest in the aviation industry sector, and has regard to:
– Geography – Airlines in the comparison group represent Qantas’ key competitor markets in Europe,
North America and Asia as well as Australia and New Zealand.
– Limited government involvement – Substantial government involvement or limited free float can
include both financial support and/or restrictions on the operations of competitors.
– Strategy – The airlines represent a combination of different strategies available to airlines. That is,
international, domestic, full service and value-based airlines.
– Continuing financial performance – Airlines at risk of bankruptcy or recently relisted following
Chapter 11 protection are likely to be outliers in terms of performance and are therefore excluded.
For the 2022-2024 LTIP and the 2023-2025 LTIP the global listed airline peer group comprised AirAsia,
Air France/KLM, Air New Zealand, All Nippon Airways, American Airlines, Cathay Pacific, Delta Airlines,
Deutsche Lufthansa, easyJet, International Consolidated Airlines Group, Japan Airlines, LATAM Airlines
Group, Ryanair, Singapore Airlines, Southwest Airlines, and United Continental.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
47
Performance
Conditions
(Commencing
with 2024-2026
LTIP)
Three equally weighted performance conditions have been used in the 2024-2026 LTIP (tested at
30 June 2026):
– Relative TSR against a global airline peer group
– Relative TSR against ASX100 companies
– Reputation as measured against the RepTrak survey (see below)
The vesting scale for both the ASX100 and the global airline peer groups remains the same as above.
For the 2024-2026 LTIP the global listed airline peer group remains the same, with the addition of Air
Canada due to its relevance to investors, with a similar strategic positioning to Qantas, limited
government involvement and representing a key market.
Reputation was selected as an additional measure for the 2024-2026 LTIP as the public’s trust in the
Group’s brand has deteriorated in recent years. Reputational repair will be a key driver of continuing
sustainable financial performance in the future, and its inclusion in the 2024-2026 LTIP is intended to
provide an appropriate focus to Executives, and signal the importance of reputational recovery in the
long-term success of the Company.
Reputation will be measured by an established external provider, RepTrak, based on proven
methodologies that will assess the public’s trust in our brand. RepTrak classifies companies into five
levels of assessed reputation (%):
– Excellent (80+)
– Strong (70-79)
– Average (60-69)
– Weak (40-59)
– Poor (0-39)
Historically, Qantas has consistently enjoyed Strong to Excellent reputation scores. However, in recent
periods this has dropped significantly into the Weak range. Qantas will need to return to ratings of Strong
or above for the future success of the business. With this in mind, targets for the 2024-2026 LTIP have
been set such that vesting will only occur if the Group returns into a reputation range assessed as Strong
to Excellent by the end of the performance period. The assessment will seek to ensure that performance
improvement is sustained and not achieved as a one-off by considering both monthly and rolling annual
performance.
The vesting scale for the Reputation measure is as follows:
Qantas Reputation Performance
Vesting Scale
Below Strong (Below 70)
Nil vesting
From Strong to Excellent (70-80)
Linear Scale: 50 per cent to 100 per cent vesting
Above Excellent (Above 80)
100 per cent vesting
Board
Discretion
Board discretion was increased in the LTIP from the 2024-2026 LTIP onwards to allow consideration of
any other factor which the Board determines is appropriate to take into account.
Trading
Restriction
Any shares awarded under the LTIP will be subject to a one-year trading restriction, unless the Board
determines otherwise. On cessation of employment shares subject to the trading restriction remain
restricted and are subject to forfeiture.
Cessation of
Employment
In general, unless the Board determines otherwise, when an Executive resigns, is terminated for cause or
is terminated in other circumstances involving unacceptable performance or conduct, any Rights which
have not vested will lapse. For any shares awarded under the LTIP that are subject to an additional
trading restriction, the Executive will continue to hold those shares and the additional trading restriction
continues to apply. These shares are subject to forfeiture.
In other circumstances of termination, unless the Board determines otherwise, for example, retirement,
employer-initiated terminations (with no record of poor performance), death or total and permanent
disablement, Rights will remain on foot on a pro-rata basis and may vest at the end of the performance
period, subject to the satisfaction of the relevant performance and service conditions of the LTIP. Any
shares allocated following vesting of the LTIP are subject to a one-year trading restriction.
Allocation
Methodology
The number of Rights granted to the CEO and Executive Management under the LTIP is calculated on a
face value basis and is the maximum that may vest at the end of the performance period.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
48
Change
of Control
In the event of a change of control, the Board determines whether the LTIP Rights vest or otherwise.
Disclosure
In addition to the required statutory disclosures, Qantas chooses to disclose the full value of LTIP awards
that vest during the year in the Remuneration Outcomes Table on page 51. The full value is equal to the
number of Rights vested, multiplied by the Qantas share price at the end of the performance period, even
where these shares are subject to an additional one-year trading restriction. The statutory remuneration
disclosure amortises the accounting value of LTIP awards over the relevant performance and service
period as per the accounting standards. The accounting value for the portion of the LTIP award that
relates to market conditions does not have regard to whether performance conditions were achieved;
whereas the accounting value for the portion of the LTIP award that relates to non-market conditions (i.e.
Reputation measure and service-related conditions) may be reversed if conditions are not achieved.
Other Benefits
Non-Cash
Benefits
Non-Cash Benefits, as disclosed in the remuneration tables, includes Travel, Superannuation and Other
Long-Term Benefits as described below.
Travel
Travel concessions are provided to all permanent Qantas employees, consistent with prevailing practice
in the airline industry. Travel at concessionary prices is on a sub-load basis; that is, it is subject to
considerable restrictions and limits on availability. The policy includes specified direct family members
or a nominated travel companion or beneficiary.
In addition, and also consistent with prevailing practice in the airline industry, the CEO and Executive
Management and their eligible beneficiaries are entitled to a number of trips for personal purposes at no
cost to the individual.
Post-employment travel concessions are also available to all permanent Qantas employees who qualify
by achieving a service condition. The CEO and Executive Management and their eligible beneficiaries are
also entitled to a number of trips for personal purposes at no cost to the individual after ceasing
employment. An estimated present value of these entitlements accrues over the service period of the
individual and is disclosed as a Post-Employment Benefit.
Superannuation Superannuation includes statutory and salary sacrifice superannuation contributions (or superannuation
benefits provided through a defined benefit superannuation plan) and is disclosed as a Post-
Employment Benefit.
Other
Long-Term
Benefits
The movement in annual leave and long service leave accruals is included in Other Long-Term Benefits.
The accounting value of Other Long-Term Benefits may be negative, for example, where an Executive’s
annual leave balance decreases as a result of taking more annual leave than they accrued during the
year.
Minimum Shareholding Guidelines
Minimum
Shareholding
Guidelines
(MSG)
The following shareholding guidelines were introduced with effect from 1 July 2019:
Individual
Guideline
Chair
1 times Chair Fee
Non-Executive Directors
1 times Base Fee
CEO
1.5 times Base Pay
Executive Management
0.75 times Base Pay
Non-Executive Directors, the CEO and Executive Management have a maximum five-year period from the
date of their appointment to the respective role or commencement of this guideline to accumulate the
value of their shareholding.
As part of enhancing governance on the MSG, amendments were made in 2023/24 to the effect that,
once an Executive has achieved the MSG applicable to their role, they will not be permitted to sell down
their holdings below this level (other than to meet any tax obligations or in the event of severe financial
hardship).
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
49
EXECUTIVE REMUNERATION STRUCTURE FOR 2024/25
As set out in section 2, the following changes will be implemented in 2024/25:
–
The IPF will be replaced in the STIP with a Balanced Scorecard approach which will consist of a mixture of Group
financial and non-financial metrics as well as individual objectives.
–
The proportion of the STIP to be delivered in shares will increase to 50 per cent with a two-year deferral period,
increasing alignment with shareholders and accelerating achievement of the MSG
As a result, the structure of the Executive Remuneration Framework for 2024/25 will be as follows:
Base Pay
Fixed Annual Remuneration inclusive of
superannuation
100% Cash
Annual Incentive
Also referred to as the
Short Term Incentive
Plan (STIP)
An annual incentive opportunity
assessed through a Balanced Scorecard
including:
–
Group financial and non-financial
measures
–
Individual performance objectives
50% Cash
50% Shares
Deferral Period
Forfeiture applies
Performance
Restriction
Long Term Incentive
Also referred to as the
Long Term Incentive
Plan (LTIP)
Award of Rights
Three equally weighted performance
measures:
–
Qantas’ three-year TSR performance
relative to a global airline peer group
– Qantas’ three-year TSR performance
relative to ASX100 companies
– Reputation, as measured by
RepTrak.
Rights may convert to shares on vesting
with a one-year restriction.
Performance Rights
Shares
Performance
Restriction
Year 1
Year 2
Year 3
Year 4
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
50
7
ACTUAL REMUNERATION OUTCOMES FOR 2023/24
The following table summarises the remuneration decisions and outcomes for the CEO and Executive Management for the
year ended 30 June 2024. The remuneration outcomes detailed in this table are useful in understanding current year pay
and its alignment with performance, as additional information to the statutory remuneration disclosures.
Actual Remuneration Outcomes Table – CEO and Executive Management1
$'000s
Base Pay
(Cash)2
STIP
Cash
Bonus3
STIP
Deferred
Award3
RRP
LTIP4,5
Other
Benefits6
Termination
Benefits
Total
Current Executives
Vanessa Hudson7
2024
1,397
1,027
514
– 1,048
393
– 4,379
CEO from 6 September 2023
CEO Designate and Chief Financial
Officer to 5 September 2023
2023
986
672
179
1,628 2,260
250
– 5,975
Andrew Glance9
2024
533
223
112
–
161
112
–
1,141
CEO Qantas Loyalty
from 1 March 2024
2023
–
–
–
–
–
–
–
–
Rob Marcolina9
2024
888
417
209
–
456
150
– 2,120
Group Chief Financial Officer
from 6 September 2023
2023
–
–
–
–
–
–
–
–
Markus Svensson8,9
2024 1,030
442
221
–
237
129
– 2,059
CEO Qantas Domestic
from 1 October 2023
2023
–
–
–
–
–
–
–
–
Stephanie Tully
2024
851
489
245
–
406
142
–
2,133
CEO Jetstar Group
2023
807
466
124
1,197
1,106
174
– 3,874
Cameron Wallace
2024
836
411
205
–
–
197
– 1,649
CEO Qantas International & Freight
2023
69
–
–
–
–
38
–
107
Former Executives10
Alan Joyce11
2024
381
–
–
– 3,154
(115)
– 3,420
Former CEO
(exited 5 September 2023)
2023
2,145
1,591
241 4,327
6,451
156
– 14,911
Andrew David
2024
256
–
–
–
785
46
– 1,087
Former CEO Qantas Domestic
(exited 29 September 2023)
2023 1,026
589
157
1,628 2,259
33
– 5,692
Olivia Wirth12
2024
739
386
193
–
828
121
479 2,746
Former CEO Qantas Loyalty
(exited 16 April 2024)
2023
868
510
136
1,386
1,919
108
– 4,927
Total
2024
6,911 3,395 1,699
– 7,075
1,175
479 20,734
2023 5,901 3,828
837 10,166 13,995
759
– 35,486
1 Details of the non-statutory remuneration methodology are explained on pages 45 to 50.
2 Base Pay (Cash) is Base Pay less superannuation contributions. Superannuation is reported in Other Benefits.
3 The full value of STIP awards made to each Executive during each of the 2023/24 and 2022/23 financial years is calculated by adding the STIP Cash Bonus and
the STIP Deferred Award. For 2022/23, the Board determined to delay its decision as to whether to approve the vesting of the STIP. On 8 August 2024, the
Board announced it had determined that the 2022/23 STIP outcome for the former CEO and accountable Executive Management would be reduced by 33 per
cent (inclusive of the previously announced 20 per cent reduction). The reduction was implemented in relation to the deferred share component. As a result, the
2022/23 outcomes have been restated to reflect this outcome.
4 2022-2024 LTIP awards vested in 2023/24 at 86.11 per cent.
5 The number of Rights vested multiplied by the Qantas share price of $5.85 at 30 June 2024 (the end of the 2022-2024 LTIP performance period) (2023: $6.20 at
30 June 2023 for the 2021-2023 LTIP).
6 Other Benefits includes Travel, Superannuation and Other Long-Term Benefits. Travel Benefits included in other benefits relate to travel both during and post
employment, and are reported in accordance with the Corporations Regulations and Accounting Standards for non-monetary short-term employee benefits in
kind. Remuneration for non-cash travel benefits is measured at the expense to the Group and includes Fringe Benefits Tax (measured with reference to
commercial fares), ticket taxes and other incremental costs. This does not include the Commercial value of the flights. Details on Other Benefits are on page 49.
7 Superannuation benefits are provided through a defined benefit superannuation plan. The amount disclosed has been measured in accordance with AASB 119
Employee Benefits.
8 Base Pay (Cash) for Mr Svensson includes a one-off retention payment of $226,000 which was put in place prior to his appointment as KMP and was paid in
September 2023.
9 The 2023/24 remuneration reflects the full year remuneration for Mr Glance, Mr Marcolina and Mr Svensson. This differs to the Statutory Remuneration
disclosure which includes only the remuneration for the period of time in a KMP role for Mr Glance (1 March 2024 to 30 June 2024), Mr Marcolina
(6 September 2023 to 30 June 2024) and Mr Svensson (1 October 2023 to 30 June 2024). 2022/23 remuneration is not shown as Mr Glance, Mr Marcolina and
Mr Svensson were not in a KMP role.
10 Mr Joyce, Mr David and Ms Wirth ceased as KMP and ceased employment with Qantas on 5 September 2023, 29 September 2023 and 16 April 2024,
respectively. Ms Wirth transitioned CEO Loyalty to Mr Glance on 1 March 2024. 2023/24 Remuneration is included up until the termination date.
11 100 per cent of the Rights under the 2021-2023 LTIP (granted on 23 October 2020 to Mr Joyce) vested following the testing of performance hurdles as at
30 June 2023 and the Board’s approval of the 2021-2023 LTIP vesting outcome on 23 August 2023. The shares were still subject to trading restrictions until
30 August 2024. The Board determined to forfeit 1,349,000 shares (100 per cent of the shares that vested). As a result, the 2022/23 LTIP outcome has been
restated to reflect this outcome.
12 Under the terms of separation, Ms Wirth received contractual termination benefits of six months’ Base Pay and was determined by the Board as a good leaver.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
51
Mr Joyce, Mr David and Ms Wirth ceased as KMP and ceased employment on 5 September 2023, 29 September 2023 and
16 April 2024, respectively. Treatment on cessation of employment, as good leavers, under the STIP and LTIP (consistent
with the terms and conditions of those plans) was as follows:
– Under the 2023/24 STIP an award of cash and restricted shares pro-rated for the portion of the performance period in
which Ms Wirth worked. Shares awarded are subject to the two-year deferral period and the additional one-year trading
restriction. Mr Joyce and Mr David did not participate in the 2023/24 STIP.
– Under the 2022-2024 LTIP, Rights that vested were pro-rated for the portion of the performance period in which Mr Joyce,
Mr David and Ms Wirth were employed. Shares allocated following vesting of the LTIP are subject to a one-year trading
restriction.
– Under the 2023-2025 LTIP, Rights continue to remain on foot on a pro-rata basis for the portion of the performance period
in which Mr Joyce, Mr David and Ms Wirth were employed, and may vest and convert to shares at the end of the
performance period subject to achievement of the original LTIP performance conditions. Any shares allocated following
vesting of the LTIP will be subject to a one-year trading restriction. For Ms Wirth, the same treatment applies for the
2024-2026 LTIP.
Actual Remuneration Outcomes Table – 2022/23 Reconciliation for Alan Joyce
In August 2023, the Board determined it would not approve the vesting of the former CEO’s award under the 2022/23 STIP
and instead would delay its decision as to whether to approve the vesting of this award until it had further information. The
Board also determined that the 2022/23 STIP outcome should be adjusted to reflect a zero achievement of the Customer
outcome (down from 2 per cent), an IPF of 100 per cent, and then subject to a further 20 per cent downward adjustment.
On 8 August 2024, the Board announced that it had determined that the 20 per cent downward adjustment to the 2022/23
STIP be increased to 33 per cent. As a result, the former CEO’s final 2022/23 STIP award was $1,831,914, delivered as
$1,591,330 cash and $240,584 as deferred shares. The adjustment was implemented through a reduction in the deferred
share component (which is subject to forfeiture where the Board determines the performance or conduct of a participant
has been deficient in any respect).
The Board also determined, having regard to the events of 2023 and the former CEO’s performance and conduct, to forfeit
100 per cent of the 2021-2023 LTIP that vested in 2023, that were held as restricted shares by the Share Plan Trustee. This
consisted of 1,349,000 restricted shares with a value of $8,363,800 (at the 30 June 2023 share price of $6.20).
The table below provides a reconciliation of these outcomes and a restatement of 2022/23 Actual Remuneration Outcome.
$'000s
2022/23
(2023 Annual
Report)
2022/23 STIP
(Withheld)
2022/23
(Forfeitures)
2022/23
(Percentage
Reduction of
Initial Award)
2022/23 Actual
Remuneration
Outcome
(Restated)
Base Pay
2,145
–
–
–
2,145
2022/23 STIP1
–
2,734
(902)
33 %
1,832
Base Pay + STIP Total
2,145
2,734
(902)
–
3,977
RRP
4,327
–
–
–
4,327
2018-2020 LTIP2
2,130
–
–
–
2,130
2019-2021 LTIP2
2,018
–
–
–
2,018
2020-2022 LTIP2
2,303
–
–
–
2,303
2021-2023 LTIP
8,364
–
(8,364)
100 %
–
LTIP Total
14,815
–
(8,364)
–
6,451
Other3
156
–
–
–
156
Total
21,443
2,734
(9,266)
–
14,911
1 The Annual Incentive numbers provided are a total of Cash and Shares component of the 2022/23 STIP for the purposes of the reconciliation.
2 After agreeing in previous years to defer the decision on vesting of Rights awarded under the 2018-2020 LTIP, 2019-2021 LTIP and 2020-2022 LTIP the former
CEO elected to convert these Rights to Shares in August 2023.
3 Includes statutory superannuation contributions, travel benefits and movements in annual leave and long service leave accruals.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
52
8
STATUTORY REMUNERATION DISCLOSURES FOR 2023/24
The statutory remuneration disclosures for the year ended 30 June 2024 are detailed below. These are prepared in
accordance with Corporations Act 2001 (Cth), Corporations Regulations and Australian Accounting Standards and differ
from the 2023/24 Actual Remuneration Outcomes on page 51. The differences arise due to the accounting treatment of
share-based payments for the STIP and LTIP.
Statutory Remuneration Table – CEO and Executive Management
Incentive Plan – Accounting Accrual
Other Benefits
Equity-Settled
Share-Based Payments
$'000s
Base
Pay
(Cash)1,2
STIP
Cash
Bonus1
STIP
Deferred
Shares1
RRP
Rights
LTIP
Rights
Sub-
Total
Non-Cash
Benefits1,3
Post-
Employ
ment
Benefits4
Termin-
ation
Benefits
Other
Long-
Term
Benefits5
Sub-
Total
Total
Current Executives
Vanessa Hudson6
2024
1,397 1,022
168
145
929 3,661
55
238
–
100
393 4,054
CEO
from 6 September 2023
CEO Designate and
Chief Financial Officer
to 5 September 2023
2023
986
677
107
872
845 3,487
43
185
–
22 250 3,737
Andrew Glance7
2024
241
74
35
–
41
391
–
49
–
7
56
447
CEO Qantas Loyalty
from 1 March 2024
2023
–
–
–
–
–
–
–
–
–
–
–
–
Rob Marcolina7
2024
737
337
44
–
253 1,371
70
62
–
10
142
1,513
Group Chief Financial
Officer
from 6 September 2023
2023
–
–
–
–
–
–
–
–
–
–
–
–
Markus Svensson7
2024
617
328
41
–
139 1,125
28
60
–
(13)
75 1,200
CEO Qantas Domestic
from 1 October 2023
2023
–
–
–
–
–
–
–
–
–
–
–
–
Stephanie Tully
2024
851
486
81
107
369 1,894
97
67
–
(22)
142 2,036
CEO Jetstar Group
2023
518
293
47
402
214 1,474
131
46
–
(22) 155 1,629
Cameron Wallace8
2024
836
411
65
–
129 1,441
149
67
–
36
252 1,693
CEO Qantas
International & Freight
2023
69
–
–
–
–
69
21
33
–
5
59
128
Former Executives9
Alan Joyce10
2024
381
133
(384)
826
763
1,719
22
38
–
(175)
(115)
1,604
Former CEO
(exited
5 September 2023)
2023
2,145 1,458
625 3,304
4,231 11,763
17
51
–
88 156 11,919
Andrew David
2024
256
(5)
(81)
145
189
504
25
7
–
14
46
550
Former CEO Qantas
Domestic
(exited 29 September
2023)
2023
1,026
593
237
872
895 3,623
31
56
–
(54)
33 3,656
Olivia Wirth
2024
739
382
248
124
592 2,085
99
63
479
(41) 600 2,685
Former CEO Qantas
Loyalty
(exited 16 April 2024)
2023
868
514
81
742
723 2,928
76
56
–
(24) 108 3,036
Total
2024
6,055 3,168
217
1,347
3,404 14,191
545
651
479
(84)
1,591 15,782
2023
5,612 3,535
1,097
6,192
6,908 23,344
319
427
–
15 761 24,105
1 Short-term employee benefits include Base Pay (cash), STIP cash bonus and Non-Cash Benefits. For 2022/23, the Board determined to delay its decision as to
whether to approve the vesting of the STIP. On 8 August 2024, the Board announced it had determined that the 2022/23 STIP outcome for the former CEO and
accountable Executive Management would be reduced by 33 per cent (inclusive of the previously announced 20 per cent reduction). The reduction was
implemented in relation to the deferred share component. Adjustments are recognised within Statutory Remuneration for 2024 in accordance with accounting
standards.
2 Base Pay (Cash) is Base Pay less superannuation contributions. Superannuation is reported in Post-Employment Benefits.
3 Non-Cash Benefits include the value of travel benefits while employed and other minor benefits. Non-Cash Benefits for travel benefits are reported in
accordance with the Corporations Regulations and Accounting Standards for non-monetary short-term employee benefits in kind. Remuneration for non-cash
travel benefits is measured at the expense to the Group and includes Fringe Benefits Tax (measured with reference to commercial fares), ticket taxes and other
incremental costs.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
53
4 Post-Employment Benefits includes superannuation and an accrual for post-employment travel of $32,000 for Mr Joyce, $78,000 for Ms Hudson and $40,000
for each other Executive (where applicable) (2023: $26,000 for Mr Joyce, $64,000 for Ms Hudson and $30,000 for each other Executive). Non-cash benefits for
post-employment travel are reported in accordance with the Corporations Regulations and Accounting Standards for non-monetary employee benefits in kind
with the remuneration accrual measured as the present value of the expense to the Group of providing this future benefit and includes Fringe Benefits Tax
(measured with reference to commercial fares), ticket taxes and other incremental costs.
5 Other Long-Term Benefits include movement in annual leave and long service leave balances. The accounting value of Other Long-Term Benefits may be
negative; for example, where an Executive’s annual leave balance decreases as a result of taking more annual leave than they accrue during the current year.
6 Superannuation benefits are provided through a defined benefit superannuation plan. The amount disclosed has been measured in accordance with AASB 119
Employee Benefits.
7 2023/24 remuneration reflects the period of time in a KMP role for Mr Glance (1 March 2024 to 30 June 2024), Mr Marcolina (6 September 2023 to 30 June
2024) and Mr Svensson (1 October 2023 to 30 June 2024).
8 Non-Cash Benefits for Mr Wallace includes the amortised accounting value for the one-off equity grant (as an equity-settled share-based payment) to replace
forfeited incentives as a result of joining Qantas that were subject to a vesting event occurring. A change to this arrangement effectively resulted in no equity
settlement being required and the award being cancelled. Notwithstanding the cancellation of the award, the accounting standards require the full expense to
be recognised.
9 Mr Joyce, Mr David and Ms Wirth ceased as a KMP and ceased employment with Qantas on 5 September 2023, 29 September 2023 and 16 April 2024,
respectively. As good leavers, the former Executives were eligible to receive an award of cash and restricted shares pro-rated for the portion of the performance
period employed under the 2022/23 STIP. Ms Wirth was eligible to receive an award of cash and restricted shares pro-rated for the portion of the performance
period employed under the 2023/24 STIP. Rights under the 2022-2024 LTIP that vested were pro-rated for the portion of the performance period in which
Mr Joyce, Mr David and Ms Wirth were employed. Shares allocated following the vesting of the 2022-2024 LTIP are subject to a one-year trading restriction.
Rights under the 2023-2025 LTIP for Mr Joyce, Mr David and Ms Wirth and 2024-2026 LTIP for Ms Wirth continue to remain on foot on a pro-rata basis for the
portion of the performance period in which Mr Joyce, Mr David and Ms Wirth were employed, consistent with the terms and conditions of the plan as a good
leaver. The Rights may vest and convert to shares at the end of the performance period subject to achievement of the original respective performance
conditions. Any shares allocated following vesting of the LTIP will be subject to a one-year trading restriction.
10 The Board has determined to forfeit 100 per cent of the shares that vested to Mr Joyce under the 2021-2023 LTIP that were subject to a one-year trading
restriction. Under Australian Accounting Standards, the Statutory Remuneration amount recognised in relation to the 2021-2023 LTIP cannot be adjusted for
this forfeiture notwithstanding that Mr Joyce receives no benefit. As such, the Statutory Remuneration amount reported over financial years 2020/21, 2021/22,
2022/23 and 2023/24 included a cumulative $4,141,430 of remuneration (1,349,000 Rights at Fair Value of $3.07 per Right, with a reported actual outcomes
value of $8,363,800 at the 30 June 2023 share price of $6.20) for Mr Joyce in relation to the 2021-2023 LTIP where, as a result of the forfeiture determination of
the Board, Mr Joyce will receive no benefit.
A reconciliation of the CEO’s Statutory Remuneration Disclosures to the Actual Remuneration Outcome is detailed below.
CEO’s Statutory Remuneration Disclosure to Actual Remuneration Outcome for 2023/24
Reconciliation
($'000) Description
Statutory Remuneration Disclosure
4,054
Accounting Value of STIP, LTIP and RRP awards
The Statutory Remuneration Disclosure includes the
accounting value of share-based payments. Accounting
standards require share-based payments to be amortised
over the relevant performance and service periods. The
accounting value for awards under the LTIP do not have
regard to whether performance conditions were achieved.
– Less: Accounting value for STIP awards
(168)
– Less: Accounting value for LTIP share awards
(929)
– Less: Accounting value for RRP share awards
(145)
– Add: Accounting adjustment for cash bonus for
2022/23 STIP Award
5
Current year STIP share awards and vesting of
LTIP awards
In a year where STIP share awards are made or awards
under the LTIP vest, the Remuneration Outcomes disclosure
includes:
– Add: 2023/24 STIP awards
514 – The full value of shares awarded under the 2023/24 STIP
(even though these awards are still subject to a two-year
deferral period).
– Add: 2022-2024 LTIP – vesting
1,048 – The full value of the shares that vested under the
2022-2024 LTIP applying the 30 June 2024 Qantas share
price. The shares are subject to an additional one-year
trading restriction.
Actual Remuneration Outcome – Total
4,379
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
54
9
REMUNERATION GOVERNANCE
The objectives of, and approach to, Qantas’ Executive Remuneration Framework are to:
•
Support Business Objectives by:
– Encouraging the pursuit of growth and the success
of Qantas
– Aligning with Qantas’ purpose, values, strategy and
risk appetite
– Aligning with shareholder requirements.
•
Operate Sustainably by:
– Encouraging the sound management of financial
and non-financial risks
– Encouraging good conduct and discouraging
misconduct
– Considering cost and reputational factors and
complying with relevant laws and regulations.
•
Be Market Competitive to attract, motivate and
appropriately reward a capable Management team.
These objectives can only be achieved by the Board applying a robust and rigorous approach to remuneration governance
and effectiveness across the areas of oversight, structure, operation and quantum.
The Board’s Governance Review revealed opportunities to improve the scope and function of remuneration governance at
Qantas. As a result of this review – which also encompassed the annual review of the Remuneration Committee’s Charter –
the scope of the Committee was expanded effective 28 August 2024 to become the People and Remuneration Committee
(the Committee), with its objectives and responsibilities amended to include oversight of additional people-related matters,
including organisational culture and conduct, employee engagement, industrial relations, diversity and inclusion, and the
recruitment and employment framework for Executive Management.
Remuneration Governance Roles
The Board
People and
Remuneration
Committee
Safety, Health,
Environment and
Security Committee
Audit Committee
The Board’s
independent
remuneration
consultant Ernst &
Young (EY)1
Approves the overall
remuneration framework.
Establishes, reviews and
makes recommendations
on the overall Qantas
Remuneration Framework,
remuneration levels and
incentive plans for the
Group.
It also provides oversight of
Group strategies in relation
to people, conduct and
culture matters, including
employee engagement,
diversity and inclusion and
industrial relations strategy.
Provides reports to the
People and Remuneration
Committee regarding safety
performance as it relates to
Executive reward
outcomes.
Provides reports to the
People and Remuneration
Committee regarding
Executive behaviour,
conduct, and execution of
responsibilities in line with
defined audit standards.
Provides market insights
and benchmarking on
remuneration practices.
1 During 2023/24, EY continued as the People and Remuneration Committee’s remuneration consultant. The People and Remuneration Committee has
established protocols in relation to the appointment and use of remuneration consultants to support compliance with the Corporations Act 2001 (Cth), which are
incorporated into the terms of engagement with EY. The People and Remuneration Committee did not seek, nor receive, a formal remuneration
recommendation (as defined in the Corporations Act 2001 (Cth)) during 2023/24.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
55
10 SUMMARY OF KEY CONTRACT TERMS AS AT 30 JUNE 2024
Contract Details
Vanessa Hudson1
Andrew Glance2
Rob Marcolina2
Markus Svensson2
Stephanie Tully2
Cameron Wallace2
Base Pay
$1,600,000
$750,000
$925,000
$850,000
$878,000
$853,000
Pay Mix per
– STIP Target3
100 %
80 %
80 %
80 %
80 %
80 %
– LTIP Target3,4
160 %
95 %
95 %
95 %
95 %
95 %
An annual benefit of trips for these Executives and eligible beneficiaries during employment5, at no
cost to the individual, is as follows:
4 long-haul
12 short-haul
2 long-haul
6 short-haul
2 long-haul
6 short-haul
2 long-haul
6 short-haul
2 long-haul
6 short-haul
2 long-haul
6 short-haul
The same benefit is provided for use post-employment, based on the period of service in an Executive
Management role within the Qantas Group.
Notice
Employment may be terminated by either the Executive or Qantas by providing six months’ written
notice.6 Each Executive’s contract includes a provision that limits any termination payment to the
statutory limit prescribed under the Corporations Act 2001 (Cth).
Severance
A severance payment of six months’ Base Pay applies where termination is initiated by Qantas other
than for cause.6
1 Target Remuneration Mix for the CEO for 2023/24 was Base Pay 28 per cent, STIP 28 per cent, and LTIP (on a face value basis) 44 per cent.
2 Target Remuneration Mix for Executive Management for 2023/24 was Base Pay 36 per cent, STIP 29 per cent, and LTIP (on a face value basis) 35 per cent.
3 Opportunity expressed as a percentage of Base Pay.
4 Rights are awarded on a face value basis and are the maximum number of Rights that may vest and convert to Qantas shares.
5 These benefits are not cumulative and lapse if they are not used during the calendar year in which the entitlements arise.
6 Other than for misconduct or unsatisfactory performance.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
56
11
EQUITY INSTRUMENTS
Shares Awarded Under the Short Term Incentive Plan
There were no shares awarded under the STIP and no previously awarded shares were vested or forfeited in the 2022/23 or
2023/24 financial years. There were no outstanding balances of unvested shares awarded under the STIP as at
30 June 2024. Shares in relation to the Board decision on the outcome of the 2022/23 STIP were allocated on 8 August
2024, and 2023/24 STIP share were allocated on 6 September 2024; as a result, these shares, will be included in the 2025
Remuneration Report disclosures.
Rights Awarded Under the Long Term Incentive Plan
The following table details Rights awarded under the LTIP that are subject to performance hurdles that are yet to be tested,
and tested Rights that have not yet converted into shares.
Number of Rights
Long Term Incentive Plan
1 July
Commenced
as KMP
Granted1,2
Vested and
Transferred3
Lapsed/
Forfeited
Ceased
Employment4
30 June5
Current Executives
Vanessa Hudson
2024 796,000
– 335,000 (364,500)
–
– 766,500
2023 722,000
– 223,500
(74,750) (74,750)
– 796,000
Andrew Glance
commenced as KMP
1 March 2024
2024
n/a
102,500
–
–
–
– 102,500
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Rob Marcolina
commenced as KMP
6 September 2023
2024
n/a 388,000
70,000 (200,500)
–
– 257,500
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Markus Svensson
commenced as KMP
1 October 2023
2024
n/a
97,500
60,500
–
–
– 158,000
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Stephanie Tully
2024 345,500
– 134,500 (178,500)
–
– 301,500
2023
– 259,000
86,500
–
–
– 345,500
Cameron Wallace
2024
–
– 130,500
–
–
– 130,500
2023
n/a
–
–
–
–
–
–
Former Executives
Alan Joyce6
ceased as KMP
5 September 2023
2024 5,189,000
–
– (1,040,500) (1,819,434) (2,329,066)
–
2023 4,291,000
– 898,000
–
–
– 5,189,000
Andrew David7
ceased as KMP
29 September 2023
2024 796,000
–
– (364,500) (182,701) (248,799)
–
2023 752,000
– 223,500
(89,750) (89,750)
– 796,000
Olivia Wirth8
ceased as KMP 16 April 2024
2024 676,000
– 147,000 (309,500) (196,327)
(317,173)
–
2023 638,500
– 190,000
(76,250) (76,250)
– 676,000
1 Rights under the 2024-2026 LTIP were granted on 3 November 2023 to Ms Hudson (following approval by shareholders at the 2023 AGM) and other Executives
and will be tested against the performance hurdles as at 30 June 2026. The number of Rights granted was determined using the face value of a Right on
30 June 2023 of $6.20, being the start of the performance period. The fair value of a Right on the grant date was $3.13 per Right.
2 Rights under the 2023-2025 LTIP were granted on 21 November 2022 to Mr Joyce (following approval by shareholders at the 2022 AGM) and other Executives
and will be tested against the performance hurdles as at 30 June 2025. The number of Rights granted was determined using the face value of a Right on
30 June 2022 of $4.47, being the start of the performance period. The fair value of a Right on the grant date was $4.24 per Right.
3 100 per cent of Rights under the 2021-2023 LTIP (granted on 23 October 2020 to Mr Joyce and 11 September 2020 for other Executives) vested following the
testing of performance hurdles as at 30 June 2023 and the Board’s approval of the 2021-2023 LTIP vesting outcome on 23 August 2023.The shares awarded
upon vesting of the LTIP were subject to an additional one-year trading restriction and are detailed in the Equity Holdings and Transactions table.
4 Mr Joyce, Mr David and Ms Wirth ceased as KMP and ceased employment on 5 September 2023, 29 September 2023 and 16 April 2024, respectively. The
Rights that continued to remain on foot on a pro-rata basis for the portion of the performance period employed at the time of ceasing as KMP are included in the
balance of Rights on cessation of employment. Any shares allocated following vesting of the respective LTIPs will be subject to a one-year trading restriction.
5 Rights under the 2022-2024 LTIP (granted on 5 November 2021 to Mr Joyce and 17 September 2021 for other Executives) are included in the 30 June 2024
balance. The number of Rights granted was determined using the face value of a Right on 30 June 2021 of $4.66, being the start of the performance period.
The fair value of a Right on the grant date was $3.85 for Mr Joyce and $3.895 per Right for other Executives. 86.11 per cent of these Rights vested following the
testing of performance hurdles as at 30 June 2024 and the Board’s approval of the 2022-2024 LTIP vesting outcome on 28 August 2024. The shares awarded to
Executive Management upon vesting of the LTIP remain subject to an additional one-year trading restriction.
6 626,110 Rights under the 2022-2024 LTIP remained on foot and were tested at 30 June 2024. 353,956 Rights under the 2023-2025 LTIP continue to remain on
foot and may vest and convert to shares at the end of the performance period subject to achievement of the original performance conditions. On 8 August 2024,
the Board determined to forfeit 100 per cent of the 2021-2023 LTIP shares that vested to Mr Joyce. The total number of shares forfeited was 1,349,000 and is
included in the balance of Rights on cessation of employment.
7 155,810 Rights under the 2022-2024 LTIP remained on foot and were tested at 30 June 2024. 92,989 Rights under the 2023-2025 LTIP continue to remain on
foot and may vest and convert to shares at the end of the performance period subject to achievement of the original performance conditions. The total number
of Rights was included in the balance of Rights on cessation of employment.
8 164,421 Rights under the 2022-2024 LTIP remained on foot and were tested at 30 June 2024. 113,722 Rights under the 2023-2025 LTIP and 39,030 Rights under
the 2024-2026 LTIP continue to remain on foot and may vest and convert to shares at the end of the performance period subject to achievement of the original
performance conditions. The total number of Rights was included in the balance of Rights on cessation of employment.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
57
Rights Awarded Under the Recovery Retention Plan
The following table details Rights awarded under the RRP that were tested and converted into Shares.
Number of Rights
Recovery Retention Plan
1 July
Commenced
as KMP
Granted
Vested and
Transferred
Lapsed/
Forfeited
Ceased
Employment
30 June1
Current Executives
Vanessa Hudson
2024
262,500
–
– (262,500)
–
–
–
2023
262,500
–
–
–
–
–
262,500
Andrew Glance
commenced as KMP
1 March 2024
2024
n/a
–
–
–
–
–
–
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Rob Marcolina
commenced as KMP
6 September 2023
2024
n/a
–
–
–
–
–
–
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Markus Svensson
commenced as KMP
1 October 2023
2024
n/a
–
–
–
–
–
–
2023
n/a
n/a
n/a
n/a
n/a
–
n/a
Stephanie Tully
2024
193,000
–
–
(193,000)
–
–
–
2023
–
193,000
–
–
–
–
193,000
Cameron Wallace
2024
–
–
–
–
–
–
–
2023
–
–
–
–
–
–
–
Former Executives
Alan Joyce
ceased as KMP
5 September 2023
2024
698,000
–
– (698,000)
–
–
–
2023
–
–
698,000
–
–
–
698,000
Andrew David
ceased as KMP
29 September 2023
2024
262,500
–
– (262,500)
–
–
–
2023
262,500
–
–
–
–
–
262,500
Olivia Wirth
ceased as KMP
16 April 2024
2024
223,500
–
– (223,500)
–
–
–
2023
223,500
–
–
–
–
–
223,500
1 100 per cent of the Rights under the 2022-2023 RRP (granted on 4 November 2023 to Mr Joyce (following approval at the 2022 AGM) and 9 June 2022 for other
Executives) vested following the testing of performance hurdles as at 30 June 2023 and the Board’s approval of the vesting outcome on 23 August 2023.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
58
Equity Holdings and Transactions
Executive Management or their related parties directly, indirectly or beneficially held shares in the Qantas Group as detailed
in the table below. It also shows each individual’s shareholding and corresponding progress against their Minimum
Shareholding Guideline at 30 June 2024.
Key Management
Personnel - Executives
Interest in
Shares 1 July
2023
Commenced
as KMP
Rights
Converted to
Shares1
Other
Changes2
Ceased
Employment
Interest in
Shares 30
June 2024
Value of
Shares3
$'000
Progress Against
Minimum
Shareholding
Guideline4
Current Executives
Vanessa Hudson
191,251
–
627,000
–
–
818,251
4,787
Meets
Andrew Glance5
commenced as KMP
1 March 2024
n/a
111,725
–
–
–
111,725
654
On track
Rob Marcolina
commenced as KMP
6 September 2023
n/a
364,530
200,500
–
–
565,030
3,305
Meets
Markus Svensson
commenced as KMP
1 October 2023
n/a
90,000
–
–
–
90,000
527
On track
Stephanie Tully
34,750
–
371,500 (125,000)
–
281,250
1,645
Meets
Cameron Wallace
23,750
–
–
–
–
23,750
139
On track
Former Executives
Alan Joyce6
ceased as KMP
5 September 2023
490,243
–
1,738,500
– (2,228,743)
–
–
n/a
Andrew David7
ceased as KMP
29 September 2023
90,668
–
627,000 (353,168) (364,500)
–
–
n/a
Olivia Wirth7
ceased as KMP
16 April 2024
76,250
–
533,000 (299,750) (309,500)
–
–
n/a
1 Shares awarded upon vesting of the 2021-2023 LTIP were allocated on 20 September 2023 and remained subject to an additional one-year trading restriction
until 30 August 2024.
2 Other Changes include shares purchased, sold and forfeited.
3 The interest in shares at 30 June 2024 multiplied by the Qantas share price of $5.85 at 30 June 2024.
4 The CEO and Executive Management have a maximum five-year period from the later of the date of their appointment to their respective role or 1 July 2019 to
accumulate the value of their shareholding.
5 The indirect holding includes deferred shares awarded to Mr Glance prior to commencing as a KMP and are subject to restriction periods until after the release
of the 2023/24 full-year financial results and the 2024/25 full-year financial results.
6 Mr Joyce ceased as KMP on 5 September 2023.
7 Mr David and Ms Wirth ceased as KMP on 29 September 2023 and 16 April 2024, respectively. The shares awarded upon vesting of the 2021-2023 LTIP
remained subject to an additional one-year trading restriction until 30 August 2024.
Other than share-based payment compensation, all equity instrument transactions between the Executive Management
(including their related parties) and Qantas during the year have been on an arm’s length basis.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
59
Performance Remuneration Affecting Future Periods
The fair value of share-based payments granted is amortised over the service period. Therefore, remuneration in respect of
these awards may be reported in future years. The following table summarises the maximum value of the awards that will be
reported in the statutory remuneration tables in future years, assuming all performance conditions are met. The minimum
value of these awards is nil should performance conditions not be satisfied.
Future Expense by Plan
Future Expense by Financial Year
Executives
$'000
STIP Awards
LTIP Awards
2022-2023
2023-2024
2022-2024
2023-2025 2024-2026
Total
2025
2026
2027
Total
Vanessa Hudson
66
350
43
349
717 1,525
891
552
82 1,525
Andrew Glance1
26
76
7
63
64
236
149
76
11
236
Rob Marcolina
45
141
19
152
150
507
322
163
22
507
Markus Svensson
35
152
10
79
129
405
237
146
22
405
Stephanie Tully
46
167
17
135
288
653
382
236
35
653
Cameron Wallace
–
141
–
–
279
420
194
194
32
420
1 The future expense includes deferred shares awarded to Mr Glance under the Manager Incentive Plan, the annual incentive plan for the broader Management
group, prior to commencing as a KMP. The deferred shares are subject to restriction periods until after the release of the 2023/24 full-year financial results and
the 2024/25 full-year financial results.
12 NON-EXECUTIVE DIRECTOR FEES
Non-Executive Director fees are determined within an aggregate Non-Executive Directors’ fee pool limit. An annual total fee
pool of $3 million (excluding industry standard travel entitlements received) was approved by shareholders at the 2016
AGM. Total Non-Executive Directors’ remuneration (excluding industry standard travel entitlements received) for the year
ended 30 June 2024 was $2.42 million (2023: $2.18 million), which is within the approved annual fee pool. Non-Executive
Directors’ remuneration reflects the responsibilities of Non-Executive Directors, with fees benchmarked against Non-
Executive Director fees of ASX50 companies. For 2023/24, fees were unchanged and no increases are proposed for
2024/25.
As referenced in the Remuneration Committee Chair’s letter in response to the customer and brand impacts of the events of
last year, current ongoing Non-Executive Directors who were on the Board at the time (Mr Goyder, Ms Hutchinson, Mr
Sampson and Mr Tyler) will take a 33 per cent reduction to their Directors’ base fees in 2024/25. Mr Goyder will retire as
Chair on 16 September 2024.
Board
Committees1
Chair2
Member
Chair
Member
Board Fees
$610,000
$167,500
$74,250
$32,500
1 The committees are the Audit Committee, Remuneration Committee and the Safety, Health, Environment and Security Committee. The Board also has a
Nomination Committee but no fees are received for serving on or chairing the Nominations Committee.
2 The Chair does not receive any additional fees for serving on or chairing any Board committee.
Non-Executive Directors do not receive any performance-related remuneration. Non-Executive Directors are paid a travel
allowance when travelling on international journeys of greater than six hours to attend Board and committee meetings or
Board-related activities requiring the participation of all Directors.
A Non-Executive Director Fee Sacrifice Share Acquisition Plan is offered to Non-Executive Directors whereby the Non-
Executive Director can elect to sacrifice a percentage of their Board or Board and committee fees in return for a grant of
Rights to the equivalent value of the same number of Qantas ordinary shares. Each Right granted will convert automatically
to one fully-paid Qantas ordinary share at the conversion date, which is six months from the grant date, subject to remaining
as a Non-Executive Director on the conversion date. The plan is designed to provide Non-Executive Directors the
opportunity to build their shareholding to achieve (and if desired, exceed) the Minimum Shareholding Guideline in a tax
effective manner which further aligns their interests with the interests of shareholders. Fees elected to be sacrificed in
return for a grant of Rights continue to be reported as Base Pay in the remuneration disclosures. The plan was paused for
the 1 March 2024 to 31 August 2024 Participation Period, having regard to the finalisation and impending disclosure of the
‘Classic Plus Flight Rewards’ Qantas Loyalty redemptions product.
All Non-Executive Directors and eligible beneficiaries receive travel entitlements. The Chair and eligible beneficiaries are
each entitled to four long-haul trips and 12 short-haul trips each calendar year and all other Non-Executive Directors and
eligible beneficiaries are each entitled to three long-haul trips and nine short-haul trips each calendar year. These flights are
not cumulative and lapse if they are not used during the calendar year in which the entitlement arises. Post-employment, the
Chair and eligible beneficiaries are each entitled to two long-haul trips and six short-haul trips for each year of service, and
all other Non-Executive Directors and eligible beneficiaries are each entitled to one long-haul trip and three short-haul trips
for each year of service. Benchmarking of airline industry practice was conducted in 2023/24 which found that these travel
benefits are broadly consistent with those provided by competitor airlines.
The accounting value of the travel benefit is captured in the remuneration table (as a Non-Cash Benefit for travel during the
year and as a Post-Employment Benefit).
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
60
Remuneration for 2023/24 – Non-Executive Directors
$'000
Short-Term Employee
Benefits
Sub-Total
Post-Employment Benefits
Total
Base Pay
(Cash)1
Non-Cash
Benefits2
Superannuation
Travel3
Sub-Total
Current Non-Executive Directors
Richard Goyder
2024
603
106
709
7
34
41
750
Chair
2023
604
117
721
6
23
29
750
John Mullen4
2024
35
–
35
4
10
14
49
Non-Executive Director
and Chair-Elect
2023
–
–
–
–
–
–
–
Belinda Hutchinson
2024
253
76
329
22
10
32
361
Non-Executive Director
2023
256
78
334
18
11
29
363
Doug Parker5
2024
295
–
295
–
10
10
305
Non-Executive Director
2023
30
–
30
–
11
11
41
Todd Sampson
2024
212
68
280
21
10
31
311
Non-Executive Director
2023
214
34
248
19
11
30
278
Dr Nora Scheinkestel4
2024
82
2
84
9
10
19
103
Non-Executive Director
2023
–
–
–
–
–
–
–
Dr Heather Smith4
2024
150
13
163
16
10
26
189
Non-Executive Director
2023
–
–
–
–
–
–
–
Antony Tyler5
2024
299
–
299
–
10
10
309
Non-Executive Director
2023
292
6
298
–
11
11
309
Former Non-Executive Directors
Maxine Brenner6
2024
135
47
182
15
10
25
207
Non-Executive Director
2023
210
161
371
22
11
33
404
Jacqueline Hey6
2024
160
31
191
17
10
27
218
Non-Executive Director
2023
249
32
281
24
11
35
316
Michael L'Estrange6
2024
72
31
103
8
–
8
111
Non-Executive Director
2023
210
7
217
22
11
33
250
Total
2024
2,296
374
2,670
119
124
243
2,913
2023
2,065
435
2,500
111
100
211
2,711
1 Base Pay (Cash) includes any amounts that the Non-Executive Director elects to salary sacrifice in return for a grant of Rights under the Non-Executive Director
Fee Sacrifice Share Acquisition Plan.
2 Non-Cash Benefits include the value of travel benefits while employed. Non-Cash Benefits for travel benefits are reported in accordance with the Corporations
Regulations and Accounting Standards for non-monetary short-term benefits in kind. Remuneration for non-cash travel benefits is measured at the expense to
the Group and includes Fringe Benefits Tax (measured with reference to commercial fares), ticket taxes and other incremental costs.
3 Non-cash benefits for post-employment travel are reported in accordance with the Corporations Regulations and Accounting Standards for non-monetary
employee benefits in kind with the remuneration accrual measured as the present value of the expense to the Group of providing this future benefit and
includes Fringe Benefits Tax (measured with reference to commercial fares), ticket taxes and other incremental costs.
4 2023/24 remuneration reflects the period served by Mr Mullen (from 22 April 2024 to 30 June 2024), Dr Scheinkestel (from 1 March 2024 to 30 June 2024) and
Dr Smith (from 22 August 2023 to 30 June 2024) as Non-Executive Directors.
5 Mr Parker and Mr Tyler received a travel allowance of $72,000 and $57,000 during 2023/24 (2022/23: $12,000 and $50,000), respectively. This amount is
included in Base Pay (Cash).
6 Ms Brenner and Ms Hey retired as Directors on 22 February 2024 and Mr L’Estrange retired as a Director on 3 November 2023.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
61
Equity Holdings and Transactions
Non-Executive Director KMP or their related parties directly, indirectly or beneficially held shares in the Qantas Group as
detailed in the table below. It also shows each individual’s shareholding and corresponding progress against their Minimum
Shareholding Guideline at 30 June 2024.
Key Management
Personnel – Non-
Executive Directors
Interest in
Shares as at
30 June
2023
Commenced
as NED
Conversion
of Rights to
Ordinary
Shares1
Other
Changes2
Ceased as
Director
Interest in
Shares as at
30 June
2024
Value of
Shares3
$'000
Progress
Against
Minimum
Shareholding
Guideline4
Richard Goyder
211,062
–
29,684
–
–
240,746
1,408
Meets
John Mullen5
n/a
–
–
–
–
–
–
–
Belinda Hutchinson
63,457
–
13,494
–
–
76,951
450
Meets
Doug Parker
–
–
–
100,000
–
100,000
585
Meets
Todd Sampson
40,087
–
5,532
–
–
45,619
267
Meets
Dr Nora Scheinkestel
n/a
9,058
–
–
–
9,058
53
On track
Dr Heather Smith
n/a
–
–
10,000
–
10,000
59
On track
Antony Tyler
52,000
–
–
–
–
52,000
304
Meets
Former Non-Executive Directors
Maxine Brenner
39,498
–
–
–
(39,498)
–
–
–
Jacqueline Hey
64,827
–
–
–
(64,827)
–
–
–
Michael L'Estrange
33,945
–
–
–
(33,945)
–
–
–
1 Ordinary shares issued upon conversion of Rights acquired under the Non-Executive Director Fee Sacrifice Share Acquisition Plan.
2 Other Changes includes shares purchased and sold.
3 The interest in shares at 30 June 2024 multiplied by the Qantas share price of $5.85 at 30 June 2024.
4 Non-Executive Directors have a maximum five-year period from the later of the date of their appointment to the respective role or 1 July 2019 to accumulate the
value of their shareholding.
5 Mr Mullen as a recent appointee has yet to commence accumulating a shareholding.
Rights Acquired Under the Non-Executive Director Fee Sacrifice Share Acquisition Plan
The following table details Rights acquired under the Non-Executive Director Fee Sacrifice Share Acquisition Plan by Non-
Executive Director KMP or their related parties:
Key Management Personnel – Non-Executive Directors
Interest in Rights as
at 30 June 2023
Acquired by Fee
Sacrifice1
Converted to
Ordinary Shares2
Interest in Rights as
at 30 June 2024
Richard Goyder
14,492
15,192
(29,684)
–
John Mullen
n/a
–
–
–
Belinda Hutchinson
6,515
6,979
(13,494)
–
Doug Parker
–
–
–
–
Todd Sampson
2,652
2,880
(5,532)
–
Dr Nora Scheinkestel
n/a
–
–
–
Dr Heather Smith
n/a
–
–
–
Antony Tyler
–
–
–
–
Former Non-Executive Directors
Maxine Brenner
–
–
–
–
Jacqueline Hey
–
–
–
–
Michael L'Estrange
–
–
–
–
1 Number of Rights acquired under the Non-Executive Director Fee Sacrifice Share Acquisition Plan. Rights were acquired on 1 September 2023 applying a fair
value of $6.0227 per Right. The plan was paused from 1 March 2024.
2 Rights acquired on 3 March 2023 (fair value of $6.3138 per Right) converted to restricted ordinary shares on 28 August 2023 and Rights acquired on
1 September 2023 (fair value of $6.0227 per Right) converted to restricted ordinary shares on 29 February 2024.
All equity instrument transactions between the Non-Executive Director KMP, including their related parties, and Qantas
during the year have been on an arm’s length basis.
Loans and Other Transactions with Key Management Personnel
No KMP or their related parties held any loans from the Qantas Group during or at the end of the year ended 30 June 2024 or
prior year. A number of KMPs and their related parties have transactions with the Qantas Group. All transactions are
conducted on normal commercial arm’s length terms.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
REMUNERATION REPORT (AUDITED) (CONTINUED)
62
ENVIRONMENTAL OBLIGATIONS
The Qantas Group’s operations are subject to a range of Commonwealth, State, Territory and international environmental
legislation. The Qantas Group is committed to environmental sustainability with high standards for environmental
performance. The Board places particular focus on the environmental aspects of its operations through the Safety, Health,
Environment and Security Committee, which assists the Board with fulfilling its strategy, policy, systems oversight,
monitoring and corporate governance responsibilities with regard to environmental matters, including compliance with
legal and regulatory obligations and risk management.
The Directors are satisfied that the Qantas Group Management System Standard underpins the management of the Qantas
Group’s environmental exposures and environmental performance, including compliance obligations. The Directors are also
satisfied that appropriate monitoring procedures are in place to ensure compliance with the Group Management System
Standard. Any significant environmental incidents are reported to the Board through the Safety, Health, Environment and
Security Committee.
INDEMNITIES AND INSURANCE
Under the Qantas Constitution, Qantas indemnifies, to the extent permitted by law, each Director and Company Secretary
of Qantas against any liability incurred by that person as an officer of Qantas.
The Directors and the Company Secretaries listed on pages 28 to 29 and individuals who formerly held any of these
positions have the benefit of the indemnity in the Qantas Constitution. Members of Qantas’ Executive Management team and
certain former Members of the Executive Management team have the benefit of an indemnity to the fullest extent permitted
by law and as approved by the Board. In respect of non-audit services, KPMG, Qantas’ auditor, has the benefit of an
indemnity to the extent KPMG reasonably relies on any information provided by Qantas which is false, misleading
or incomplete. No amount has been paid under any of these indemnities during 2023/24 or to the date of this Report.
During the year, Qantas paid a premium for Directors’ and Officers’ liability insurance policies, which cover all Directors and
Officers of the Qantas Group. Details of the nature of the liabilities covered, and the amount of the premiums paid in respect
of the Directors’ and Officers’ insurance policies, are not disclosed, as disclosure is prohibited under the terms of the
contracts.
NON-AUDIT SERVICES
During the year, Qantas’ auditor, KPMG, performed certain other services in addition to its statutory duties. The Directors
are satisfied that:
a. The non-audit services provided during 2023/24 by KPMG as the external auditor were compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001 (Cth)
b. Any non-audit services provided during 2023/24 by KPMG as the external auditor did not compromise the auditor
independence requirements of the Corporations Act 2001 (Cth) for the following reasons:
– KPMG services have not involved partners or staff acting in a managerial or decision-making capacity within the
Qantas Group or being involved in the processing or originating of transactions
– KPMG non-audit services have only been provided where Qantas is satisfied that the related function or process
will not have a material bearing on the audit procedures
– KPMG partners and staff involved in the provision of non-audit services have not participated in associated approval or
authorisation processes
– A description of all non-audit services undertaken by KPMG and the related fees has been reported
to the Board to ensure complete transparency in relation to the services provided
– The declaration required by section 307C of the Corporations Act 2001 (Cth) confirming independence
has been received from KPMG.
A copy of the lead auditor’s independence declaration as required under section 307C of the Corporations Act 2001 (Cth)
is included on page 64.
Details of the amounts paid to KPMG for audit and non-audit services provided during the year are set out in Note 27 to
the Financial Statements.
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
63
LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 (CTH)
To: The Directors of Qantas Airways Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Qantas Airways Limited for the financial year
ended 30 June 2024, there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 (Cth) in relation to
the audit, and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Sydney
12 September 2024
Julian McPherson
Partner
KPMG, an Australian partnership and a member firm of
the KPMG global organization of independent member
firms affiliated with KPMG International Limited, a private
English company limited by guarantee. All rights
reserved.
The KPMG name and logo are trademarks used under
license by the independent member firms of the KPMG
global organization.
Liability limited by a scheme
approved under Professional
Standards Legislation.
Rounding
Qantas is a company of a kind referred to in Australian Securities and Investments Commission (ASIC) Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that Instrument, amounts in this
Directors’ Report and the Financial Report have been rounded to the nearest million dollars unless otherwise stated.
Signed pursuant to a Resolution of the Directors:
Richard Goyder
Chair
12 September 2024
Vanessa Hudson
Chief Executive Officer
12 September 2024
Qantas Annual Report 2024
Directors’ Report continued
For the year ended 30 June 2024
64
FINANCIAL STATEMENTS
Consolidated Income Statement
66
Consolidated Statement of Comprehensive Income
67
Consolidated Balance Sheet
68
Consolidated Statement of Changes in Equity
69
Consolidated Cash Flow Statement
71
NOTES TO THE FINANCIAL STATEMENTS
1
Statement of Compliance and Basis of Preparation
72
2
Operating Segments, Underlying Profit Before Tax and Return on Invested Capital
73
3
Earnings Per Share
77
4
Revenue and Other Income
77
5
Depreciation and Amortisation
78
6
Net Gain on Disposal of Assets
78
7
Other Expenditure
78
8
Net Finance Costs
79
9
Income Tax
79
10
Dividends and Other Shareholder Distributions
81
11
Receivables
81
12
Inventories
82
13
Assets Classified as Held for Sale
82
14
Investments Accounted for Under the Equity Method
82
15
Property, Plant and Equipment
83
16
Leases
84
17
Intangible Assets
85
18
Deferred Tax (Liabilities)/Assets
86
19
Other Assets
87
20
Revenue Received in Advance
88
21
Net on Balance Sheet Debt
88
22
Provisions
89
23
Capital
89
24
Impairment of Assets and Related Costs
90
25
Share-Based Payments
92
26
Financial Risk Management
94
27
Auditor’s Remuneration
100
28
Notes to the Consolidated Cash Flow Statement
100
29
Superannuation
101
30
Deed of Cross Guarantee
103
31
Related Parties
106
32
Parent Entity Disclosures – Qantas Airways Limited
107
33
Contingent Liabilities and Legal Provisions
110
34
Post-Balance Sheet Date Events
111
35
Summary of Material Accounting Policies
112
36
New Standards and Interpretations Adopted by the Group
128
37
New Standards and Interpretations Not Yet Adopted by the Group
128
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Consolidated Entity Disclosure Statement
129
Notes to Consolidated Entity Disclosure Statement
131
Directors’ Declaration
132
Independent Auditor’s Report
133
Qantas Annual Report 2024
Financial Report
For the year ended 30 June 2024
65
2024
2023
Notes
$M
$M
REVENUE AND OTHER INCOME
Net passenger revenue
18,903
16,923
Net freight revenue
1,211
1,380
Other revenue and income
4(B)
1,825
1,512
Revenue and other income
21,939
19,815
EXPENDITURE
Salaries, wages and other benefits
4,777
4,261
Aircraft operating variable
4,839
3,996
Fuel
5,316
4,555
Depreciation and amortisation
5
1,773
1,762
Share of net (profit)/loss of investments accounted for under the equity method
14
(4)
44
Net gain on disposal of assets
6
(18)
(4)
Other
7
3,171
2,512
Expenditure
19,854
17,126
Statutory profit before income tax expense and net finance costs
2,085
2,689
Finance income
8
117
138
Finance costs
8
(318)
(355)
Net finance costs
8
(201)
(217)
Statutory profit before income tax expense
1,884
2,472
Income tax expense
9
(633)
(728)
Statutory profit for the year
1,251
1,744
Attributable to:
Members of Qantas
1,255
1,746
Non-controlling interests
(4)
(2)
Statutory profit for the year
1,251
1,744
EARNINGS PER SHARE ATTRIBUTABLE TO MEMBERS OF QANTAS
Statutory Earnings Per Share (cents)
3
75.9
96.0
Diluted Earnings Per Share (cents)
3
75.1
93.0
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Income Statement
For the year ended 30 June 2024
66
2024
2023
$M
$M
Statutory profit for the year
1,251
1,744
Items that were or may be subsequently reclassified to profit or loss
Effective portion of changes in fair value of cash flow hedges, net of tax
84
(79)
Transfer of effective hedging gains from hedge reserve to the Consolidated Income
Statement, net of tax1
(76)
(232)
Net changes in hedge reserve for time value of options, net of tax
60
(111)
Foreign currency translation of controlled entities
(3)
(17)
Foreign currency translation of investments accounted for under the equity method
15
5
Items that will not subsequently be reclassified to profit or loss
Defined benefit actuarial losses, net of tax
(61)
(103)
Fair value gains/(losses) on investments, net of tax
3
(12)
Other comprehensive income/(loss) for the year
22
(549)
Total comprehensive income for the year
1,273
1,195
Attributable to:
Members of Qantas
1,277
1,197
Non-controlling interests
(4)
(2)
Total comprehensive income for the year
1,273
1,195
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2024
67
1
These amounts were allocated to revenue of $24 million (2023: $17 million), fuel expenditure of ($133) million (2023: ($348) million) and income tax expense of
$33 million (2023: $99 million) in the Consolidated Income Statement.
2024
2023
Notes
$M
$M
CURRENT ASSETS
Cash and cash equivalents
21(A)
1,718
3,171
Receivables
11
1,124
1,046
Lease receivables
16(B)
10
10
Other financial assets
26(B), (C)
261
222
Inventories
12
343
290
Assets classified as held for sale
13
45
38
Income tax receivables
9(D)
21
–
Other
19
457
328
Total current assets
3,979
5,105
NON-CURRENT ASSETS
Receivables
11
11
5
Lease receivables
16(B)
48
52
Other financial assets
26(B), (C)
192
151
Investments accounted for under the equity method
14
39
25
Property, plant and equipment
15
13,558
11,849
Right of use assets
16(A)
1,315
1,303
Intangible assets
17
638
687
Deferred tax assets
18
–
367
Other
19
784
810
Total non-current assets
16,585
15,249
Total assets
20,564
20,354
CURRENT LIABILITIES
Payables
2,908
2,732
Revenue received in advance
20
6,722
6,662
Interest-bearing liabilities
21(B)
208
799
Lease liabilities
16(C)
392
581
Other financial liabilities
26(B), (C)
41
51
Provisions
22
1,473
1,272
Total current liabilities
11,744
12,097
NON-CURRENT LIABILITIES
Revenue received in advance
20
1,879
2,010
Interest-bearing liabilities
21(B)
4,827
4,370
Lease liabilities
16(C)
1,164
976
Other financial liabilities
26(B), (C)
33
311
Provisions
22
424
580
Deferred tax liabilities
18
199
–
Total non-current liabilities
8,526
8,247
Total liabilities
20,270
20,344
Net assets
294
10
EQUITY
Issued capital
23(A)
1,317
2,186
Treasury shares
23(B)
(62)
(106)
Reserves
324
200
Accumulated losses
(1,290)
(2,275)
Equity attributable to members of Qantas
289
5
Non-controlling interests
5
5
Total equity
294
10
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Balance Sheet
As at 30 June 2024
68
30 June 2024
Issued
Capital
Treasury
Shares
Employee
Compensation
Reserve
Hedge
Reserve
Foreign
Currency
Translation
Reserve
Other
Reserves1
Accumulated
Losses
Non-
controlling
Interests
Total
Equity
$M
Balance as at 1 July 2023
2,186
(106)
259
(50)
3
(12)
(2,275)
5
10
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Statutory profit for the year
–
–
–
–
–
–
1,255
(4) 1,251
Other comprehensive income/(loss)
Effective portion of changes
in fair value of cash flow
hedges, net of tax
–
–
–
84
–
–
–
–
84
Transfer of effective hedging
gains from hedge reserve to
the Consolidated Income
Statement, net of tax
–
–
–
(76)
–
–
–
– (76)
Net changes in hedge reserve
for time value of options, net
of tax
–
–
–
60
–
–
–
–
60
Foreign currency translation
of controlled entities
–
–
–
–
(3)
–
–
–
(3)
Foreign currency translation
of investments accounted for
under the equity method
–
–
–
–
15
–
–
–
15
Defined benefit actuarial
losses, net of tax
–
–
–
–
–
(61)
–
–
(61)
Fair value gains on
investments, net of tax
–
–
–
–
–
3
–
–
3
Total other comprehensive
income for the year
–
–
–
68
12
(58)
–
–
22
Total comprehensive income
for the year
–
–
–
68
12
(58)
1,255
(4) 1,273
Recognition of effective cash
flow hedges on capitalised
assets, net of tax
–
–
–
(9)
–
–
–
–
(9)
Transactions with owners in their capacity as owners
On-market share buy-back
(869)
–
–
–
–
–
–
– (869)
Revaluation of put option
over non-controlling interest
–
–
–
–
–
69
–
–
69
Purchase of non-controlling
interest in controlled entity
–
–
–
–
–
211
(205)
4
10
Treasury shares acquired
– (288)
–
–
–
–
–
– (288)
Share-based payments
expense
–
–
69
–
–
–
–
–
69
Shares vested and
transferred to employees/
Rights unvested and lapsed
–
332
(238)
–
–
–
(65)
–
29
Total transactions with
owners in their capacity as
owners
(869)
44
(169)
–
–
280
(270)
4 (980)
Balance as at 30 June 2024
1,317
(62)
90
9
15
210
(1,290)
5 294
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
69
1 Other Reserves as at 30 June 2024 includes the defined benefit reserve of $217 million and the fair value reserve of ($7) million.
30 June 2023
Issued
Capital
Treasury
Shares
Employee
Compensation
Reserve
Hedge
Reserve
Foreign
Currency
Translation
Reserve
Other
Reserves1
Accumulated
Losses
Non-
controlling
Interests
Total
Equity
$M
Balance as at 1 July 2022
3,186
(8)
81
394
15
159
(4,024)
7 (190)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Statutory profit for the year
–
–
–
–
–
–
1,746
(2)
1,744
Other comprehensive (loss)/income
Effective portion of changes in
fair value of cash flow hedges,
net of tax
–
–
–
(79)
–
–
–
–
(79)
Transfer of effective hedging
gains from hedge reserve to
the Consolidated Income
Statement, net of tax
–
–
–
(232)
–
–
–
–
(232)
Net changes in hedge reserve
for time value of options, net
of tax
–
–
–
(111)
–
–
–
–
(111)
Foreign currency translation
of controlled entities
–
–
–
–
(17)
–
–
–
(17)
Foreign currency translation
of investments accounted for
under the equity method
–
–
–
–
5
–
–
–
5
Defined benefit actuarial
losses, net of tax
–
–
–
–
–
(103)
–
–
(103)
Fair value losses on
investments, net of tax
–
–
–
–
–
(12)
–
–
(12)
Total other comprehensive
loss for the year
–
–
–
(422)
(12)
(115)
–
– (549)
Total comprehensive income
for the year
–
–
–
(422)
(12)
(115)
1,746
(2)
1,195
Recognition of effective cash
flow hedges on capitalised
assets, net of tax
–
–
–
(22)
–
–
–
–
(22)
Transactions with owners in their capacity as owners
On-market share buy-back
(1,000)
–
–
–
–
–
–
– (1,000)
Revaluation of put option
over non-controlling interest
–
–
–
–
–
(56)
–
–
(56)
Treasury shares acquired
–
(104)
–
–
–
–
–
–
(104)
Share-based payments
expense
–
–
188
–
–
–
–
–
188
Shares vested and
transferred to employees/
Rights unvested and lapsed
–
6
(10)
–
–
–
3
–
(1)
Total transactions with
owners in their capacity as
owners
(1,000)
(98)
178
–
–
(56)
3
–
(973)
Balance as at 30 June 2023
2,186
(106)
259
(50)
3
(12)
(2,275)
5
10
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Statement of Changes in Equity continued
For the year ended 30 June 2024
70
1
Other Reserves as at 30 June 2023 includes the defined benefit reserve of $278 million, the put option reserve of ($280) million and the fair value reserve of
($10) million.
2024
2023
Notes
$M
$M
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers
23,153
21,555
Cash payments to suppliers and employees
(19,549)
(16,356)
Interest received
116
128
Interest paid (interest-bearing liabilities)
(158)
(186)
Interest paid (lease liabilities)
16(C)
(77)
(65)
Dividends received from investments accounted for under the equity method
14
5
12
Australian income taxes paid
9(D)
(45)
–
Foreign income taxes paid
(4)
(3)
Net cash inflow from operating activities
28
3,441
5,085
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment and intangible assets
(2,673)
(2,563)
Interest paid and capitalised on qualifying assets
8
(88)
(31)
Proceeds from disposal of property, plant and equipment, net of costs
90
11
Payments for investments held at fair value
(5)
–
Payments for acquisition of non-controlling interest in subsidiary
(211)
–
Proceeds from disposal of shares in investments accounted for under the equity
method
–
33
Payments for investments accounted for under the equity method
14
–
(75)
Net cash outflow from investing activities
(2,887)
(2,625)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for share buy-back
(852)
(1,000)
Payments for treasury shares
(292)
(103)
Proceeds from interest-bearing liabilities, net of costs
21(D)
1,011
826
Repayments of interest-bearing liabilities
21(D)
(1,176)
(1,669)
Repayments of lease liabilities
16(C)
(708)
(690)
Proceeds from lease receivables
10
8
Payments for aircraft security deposits
(3)
–
Net cash outflow from financing activities
(2,010)
(2,628)
Net decrease in cash and cash equivalents held
(1,456)
(168)
Cash and cash equivalents at the beginning of the year
3,171
3,343
Effects of exchange rate changes on cash and cash equivalents
3
(4)
Cash and cash equivalents at the end of the year
21(A)
1,718
3,171
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
Qantas Annual Report 2024
Consolidated Cash Flow Statement
For the year ended 30 June 2024
71
1
STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
(A)
REPORTING ENTITY
Qantas Airways Limited (Qantas) is a for-profit company limited by shares, incorporated in Australia, whose shares are
publicly traded on the Australian Securities Exchange (ASX) and which is subject to the operation of the Qantas Sale Act
1992 (Cth).
The Consolidated Financial Statements for the year ended 30 June 2024 comprises Qantas and its controlled entities
(together referred to as the Qantas Group or the Group) and the Qantas Group’s interest in investments accounted for under
the equity method.
The Consolidated Financial Statements of Qantas for the year ended 30 June 2024 were authorised for issue in accordance
with a resolution of the Directors on 12 September 2024.
i.
Statement of Compliance
The Consolidated Financial Statements are general purpose financial statements which have been prepared in accordance
with the Australian Accounting Standards (AASB) adopted by the Australian Accounting Standards Board and the
Corporations Act 2001 (Cth). The Consolidated Financial Statements also complies with International Financial Reporting
Standards (IFRS) and the International Financial Reporting Interpretations Committee (IFRIC) Interpretations adopted by the
International Accounting Standards Board (IASB).
ii.
Basis of Preparation
The Consolidated Financial Statements have been prepared on a going concern basis, which assumes the Group will be able
to meet its obligations as and when they fall due. The Consolidated Financial Statements are presented in Australian dollars,
which is the functional and presentation currency of the Qantas Group, and have been prepared on the basis of historical
cost except in accordance with relevant accounting policies where assets and liabilities are stated at their fair values in the
following material items in the Consolidated Balance Sheet:
– Investments and derivatives at fair value through profit and loss, and investments at fair value through other
comprehensive income are measured at fair value
– Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell
– Net defined benefit asset is measured at the fair value of plan assets less the present value of the defined benefit
obligation
– Put option liability over relevant non-controlling interests is measured at the present value of the estimated redemption
amount. Changes in the value of the put option liability are recognised in Other Reserves.
The Group is of a kind referred to in Australian Securities and Investments Commission (ASIC) Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. In accordance with that Instrument, all financial information presented
has been rounded to the nearest million dollars, unless otherwise stated.
Where applicable, comparative balances have been reclassified to align with current year presentation.
(B)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Consolidated Financial Statements requires Management to make judgements, estimates and
assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and
expenses. It also requires the exercise of judgement in the process of applying the Group’s accounting policies. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis, as appropriate to the particular circumstances.
Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods
affected. In preparing this Report, areas of judgements made by Management in the application of Australian Accounting
Standards that have a significant effect on the Consolidated Financial Statements and estimates with a significant risk of
material adjustment in future periods are included in the following notes:
– Note 26(C)/Note 35(C) – Derivatives and Hedging Instruments
– Note 29 – Superannuation
– Note 33 – Contingent Liabilities and Legal Provisions
– Note 35(D) – Summary of Material Accounting Policies (Revenue Recognition)
– Note 22/Note 35(O) – Summary of Material Accounting Policies (Provisions).
Qantas Annual Report 2024
Notes to the Financial Statements
For the year ended 30 June 2024
72
1
STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION (CONTINUED)
(B)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Impact of climate change on financial reporting
The Group recognises that human-induced climate change is a significant issue for the aviation industry and is committed to
supporting the aims of the Paris Climate Agreement to limit warming to well below 2 degrees Celsius above pre-industrial
levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels.
In 2019, the Group announced its commitment to achieving net zero emissions by 2050 and capping net emissions at 2019
levels. In March 2022, the Group announced new interim targets as part of the Climate Action Plan (CAP), including:
– 25 per cent reduction in net emissions from 2019 levels by 2030
– 10 per cent Sustainable Aviation Fuel (SAF) in fuel mix by 2030.
The Qantas Group’s long-term strategy acknowledges the potential impact of climate change and resource constraints on
the business. Climate-related risks and opportunities are also addressed in the Qantas Group’s Sustainability Report 2024.
Three pillars support the achievement of the Group’s interim targets as detailed in the CAP:
– Sustainable operations: Focused on reducing emissions by optimising fuel burn through flying and engineering
procedures, airspace design and management, aircraft performance and flight planning. Removing single-use plastics
across our product offering and diverting general waste, generated by our domestic operations, from landfill.
– Sustainable Aviation Fuels (SAF): Working with governments, industry and businesses to develop a commercial-scale,
competitive SAF industry in Australia. This includes supporting the establishment of new supply chains and relies on
creating SAF from various biomass sources such as used cooking oil, energy crops, agricultural residues or waste
materials that can reduce emissions on a lifecycle basis, typically by up to around 80 per cent. It also includes advancing
non-biogenic, synthetic SAF produced with carbon dioxide, green hydrogen and significant amounts of renewable
electricity using power-to-liquid technology pathways.
– Carbon offsets: Offsetting emissions by investing in high-quality, high-integrity Australian and international projects with
nature and community co-benefits, including those led by Traditional Owners.
The Group’s Financial Plan incorporates estimates of known future impacts on the Group of meeting the interim targets (as
detailed in the CAP), including the financial impact within cash flow projections of the increased cost of carbon offsetting
and SAF (together with estimated recovery through revenue) and capital expenditure to introduce more fuel-efficient
aircraft.
In preparing the Consolidated Financial Statements, the medium- and long-term cash flow impacts of meeting the interim
targets in the CAP have been considered in key estimates, including:
– The estimates of future cash flows used in impairment assessments of the Group’s Cash Generating Units (CGUs)
– The assessment of the useful lives of aircraft identified in the Group fleet plan to be retired as part of the introduction of
more fuel-efficient aircraft.
2
OPERATING SEGMENTS, UNDERLYING PROFIT BEFORE TAX AND RETURN ON INVESTED CAPITAL
(A)
OPERATING SEGMENTS
The Qantas Group comprises the following operating segments:
i.
Underlying EBIT
Underlying EBIT is the primary reporting measure used by the Qantas Group’s Chief Operating Decision-Making bodies
(CODM), being the Chief Executive Officer, Group Leadership Team and the Board of Directors, for the purpose of assessing
the performance of Qantas Domestic, Qantas International, Jetstar Group, and Qantas Loyalty operating segments. The
primary reporting measure of the Corporate segment is Underlying PBT, as net finance costs are managed centrally and are
not allocated to the Qantas Domestic, Qantas International, Jetstar Group or Qantas Loyalty operating segments. Underlying
EBIT is calculated as Underlying PBT as outlined below (refer to Note 2(B)) but excluding the impact of net finance costs.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
73
2
OPERATING SEGMENTS, UNDERLYING PROFIT BEFORE TAX AND RETURN ON INVESTED CAPITAL (CONTINUED)
(A)
OPERATING SEGMENTS (CONTINUED)
ii.
Analysis by Operating Segment
2024
Qantas
Domestic
Qantas
International
Jetstar
Group
Qantas
Loyalty Corporate
Unallocated/
Eliminations1
Consolidated
$M
REVENUE AND OTHER INCOME
External segment revenue and other income
6,831
8,205
4,776
2,455
12
(340)
21,939
Inter-segment revenue and other income
410
461
146
118
–
(1,135)
–
Total segment revenue and other income
7,241
8,666
4,922
2,573
12
(1,475)
21,939
Share of net profit/(loss) of investments
accounted for under the equity method
10
10
(16)
–
–
–
4
Underlying EBITDA2
1,636
1,315
910
532
(256)
(85)
4,052
Depreciation and amortisation
(575)
(757)
(413)
(21)
(7)
–
(1,773)
Reversal of impairment/(impairment)
2
(2)
–
–
–
–
–
Underlying EBIT
1,063
556
497
511
(263)
(85)
2,279
Net finance costs
(201)
(201)
Underlying PBT
(464)
2,078
ROIC %3
57.9%
2023
Qantas
Domestic
Qantas
International
Jetstar
Group
Qantas
Loyalty Corporate
Unallocated/
Eliminations1 Consolidated
$M
REVENUE AND OTHER INCOME
External segment revenue and other income
6,497
7,493
4,097
2,043
9
(324)
19,815
Inter-segment revenue and other income
483
256
138
146
–
(1,023)
–
Total segment revenue and other income
6,980
7,749
4,235
2,189
9
(1,347)
19,815
Share of net (loss)/profit of investments
accounted for under the equity method
5
5
(54)
–
–
–
(44)
Underlying EBITDA2
1,936
1,592
759
500
(205)
(137)
4,445
Depreciation and amortisation
(665)
(686)
(355)
(49)
(7)
–
(1,762)
Impairment
(1)
–
–
–
–
–
(1)
Underlying EBIT
1,270
906
404
451
(212)
(137)
2,682
Net finance costs
(217)
(217)
Underlying PBT
(429)
2,465
ROIC %3
103.6%
1 Unallocated/Eliminations represents unallocated businesses of the Qantas Group that are not considered to be reportable segments and consolidation
elimination entries. It also includes the impact of discount rate changes on provisions (refer to Note 7) and changes in presentation of income/expenses where
the determination of whether the Group is acting as principal or agent is made on consolidation. Unallocated/Eliminations also includes the recognition of the
Recovery Boost bonus for EBA-covered employees announced in June 2022 and the Recovery Retention bonuses announced in February 2022 expensed in
accordance with relevant Accounting Standards.
2 Underlying EBITDA represents underlying earnings before income tax expense, depreciation, amortisation, net finance costs and reversal of impairment/
(impairment).
3 ROIC % represents Return on Invested Capital (ROIC) EBIT divided by Average Invested Capital. Refer to Note 2(C).
Passenger revenue primarily arises within the Qantas Domestic, Qantas International and Jetstar Group segments. Freight
revenue primarily arises within Qantas International, except when belly space is utilised in Qantas Domestic and Jetstar
Group.
Marketing revenue and redemption revenue in relation to the issuance and redemption of Qantas Points is recognised within
the Qantas Loyalty segment. Marketing revenue on inter-segment Qantas Point issuances is eliminated on consolidation.
Redemption revenue arising from Qantas Group flight redemptions is recognised within Net Passenger Revenue on
consolidation. The inter-segment arrangements with Qantas Loyalty are designed not to derive a net profit from inter-
segment Qantas Point issuances and redemptions.
Redemption revenue in relation to products provided by suppliers outside the Group, such as Qantas Marketplace
redemptions and other carrier redemptions, is recognised within Revenue in the Consolidated Income Statement net of
related costs, as the Group is an agent. For the purposes of segment reporting, the Qantas Loyalty segment reports these
redemptions on a gross basis. Adjustments are made within consolidation eliminations to present these redemptions on a
net basis at a Group level within Other Revenue and Income.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
74
2
OPERATING SEGMENTS, UNDERLYING PROFIT BEFORE TAX AND RETURN ON INVESTED CAPITAL (CONTINUED)
(B)
UNDERLYING PROFIT BEFORE TAX (UNDERLYING PBT) AND RECONCILIATION TO STATUTORY PROFIT BEFORE
TAX
Underlying PBT is a non-statutory measure and is the primary reporting measure used by the CODM bodies for the purpose
of assessing the performance of the Group. The objective of measuring and reporting Underlying PBT is to provide a
meaningful and consistent representation of the underlying performance of each operating segment and the Qantas Group.
Items which are identified by Management and reported to the CODM bodies as not representing the underlying
performance of the business are not included in Underlying PBT. The determination of these items is made after
consideration of their nature and materiality and is applied consistently from period to period.
Items not included in Underlying PBT primarily result from revenues or expenses outside the ordinary course of business
relating to business activities in other reporting periods, Recovery Plan restructuring costs, transactions involving
investments, gains/losses on sale and/or impairments of assets and other transactions.
RECONCILIATION OF UNDERLYING PBT TO STATUTORY PROFIT BEFORE TAX
2024
2023
Note
$M
$M
Underlying PBT
2,078
2,465
Items not included in Underlying PBT
– Legal provisions and related costs
33(B)
(198)
–
– Recovery Plan restructuring costs
–
5
– Net gain on disposal of assets
4
2
Total items not included in Underlying PBT
(194)
7
Statutory Profit Before Income Tax Expense
1,884
2,472
In the 2023/24 financial year, items outside of Underlying PBT included:
Item outside of
Underlying PBT
Description
Legal provisions and
related costs
($128) million for the announced ACCC settlement (compensation and penalties) and related costs
and ($70) million for an increase in provisions in relation to the ground handling outsourcing
Federal Court case (refer to Note 33(B)), recognised in Other Expenditure.
Net gain on disposal of
assets
The net gain on disposal of assets of $4 million arose from the disposal of Perth Airport assets.
The 2022/23 financial year included the following items:
Item outside of
Underlying PBT
Description
Recovery Plan
restructuring costs
$5 million primarily relates to the reversal of a redundancy provision previously recognised.
Net gain on disposal of
assets
The net gain on disposal of assets of $2 million arose from the sale of the Group’s investment in
Helloworld Travel Ltd (ASX: HLO).
(C)
RETURN ON INVESTED CAPITAL
Return on Invested Capital (ROIC %) is a non-statutory measure and is the primary financial return measure of the Group.
ROIC % is calculated as Return on Invested Capital EBIT (ROIC EBIT) divided by Average Invested Capital.
i.
ROIC EBIT AND ROIC %
ROIC EBIT is derived by adjusting Underlying EBIT for the year to exclude leased aircraft depreciation under AASB 16 Leases
(AASB 16) and to include notional depreciation for these aircraft to account for them as if they were owned.
In addition, for non-aircraft leases, ROIC EBIT is reduced for the full lease payments rather than depreciation under AASB 16
to account for these items as a service cost. The objective of these adjustments is to show an EBIT result which is indifferent
to the financing or ownership structure of aircraft assets and that treats non-aircraft leases as a service cost rather than a
debt repayment.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
75
2
OPERATING SEGMENTS, UNDERLYING PROFIT BEFORE TAX AND RETURN ON INVESTED CAPITAL (CONTINUED)
(C)
RETURN ON INVESTED CAPITAL (CONTINUED)
2024
2023
$M
$M
Underlying EBIT
2,279
2,682
Add back: Lease right of use depreciation under AASB 16
295
320
Less: Notional depreciation1
(91)
(131)
Less: Cash expenses for non-aircraft leases2
(243)
(228)
ROIC EBIT
2,240
2,643
Average Invested Capital for the year ended 30 June
3,869
2,552
ROIC %3
57.9%
103.6%
1 For calculating ROIC, capitalised leased aircraft are included in the Group's Invested Capital at the AUD market value (referencing Aircraft Value Analysis
Company (AVAC)) at the date of commencing operations at the prevailing AUD/USD rate. This value is depreciated notionally in accordance with the Group's
accounting policies, with the calculated depreciation reported above as notional depreciation.
2 Cash expenses for non-aircraft leases are net of rental income from subleases.
3 ROIC % represents Return on Invested Capital (ROIC) EBIT divided by Average Invested Capital. Refer to Note 2(C)ii.
ii.
Average Invested Capital
The objective of the Group's Financial Framework is to show Invested Capital which is indifferent to financing or ownership
structures of aircraft assets (leased versus owned). Invested Capital includes the net assets of the business other than cash,
lease receivables, interest-bearing liabilities, other financial assets/liabilities and tax balances as well as lease liabilities and
right of use assets (for leased aircraft, property and other assets) as measured under AASB 16.
To account for the capital invested in leased aircraft, Invested Capital includes an amount representing the capitalised value
of leased aircraft assets as if they were owned. Invested Capital includes the full capital held in leased aircraft, which is a
non-statutory adjustment, as in accordance with AASB 16 right of use assets are only measured with reference to the lease
term.
Average Invested Capital is equal to the average of the monthly Invested Capital for the year.
2024
2023
Invested Capital
$M
$M
Receivables (current and non-current)
1,135
1,051
Inventories
343
290
Other assets (current and non-current)
1,241
1,138
Investments accounted for under the equity method
39
25
Property, plant and equipment
13,558
11,849
Intangible assets
638
687
Assets classified as held for sale
45
38
Payables
(2,908)
(2,732)
Provisions (current and non-current)
(1,897)
(1,852)
Revenue received in advance (current and non-current)
(8,601)
(8,672)
Capitalised aircraft leased assets1
982
1,409
Invested Capital as at 30 June
4,575
3,231
Average Invested Capital for the year ended 30 June
3,869
2,552
1 For calculating ROIC, all statutory aircraft lease balances and provisions related to leased aircraft are adjusted to represent the capitalised value of leased
aircraft, as if they were owned. Capitalised leased aircraft are included in the Group's Invested Capital at the AUD market value (referencing AVAC) at the date of
commencing operations at the prevailing AUD/USD rate. This value is notionally depreciated in accordance with the Group's accounting policies, with the
calculated depreciation reported in ROIC EBIT as notional depreciation. The carrying value of leased aircraft (AUD market value less accumulated notional
depreciation) and an adjustment to exclude aircraft lease return provisions is reported within Invested Capital as capitalised aircraft leased assets.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
76
3
EARNINGS PER SHARE
2024
2023
cents
cents
Statutory Earnings Per Share1
75.9
96.0
Diluted Earnings Per Share2
75.1
93.0
1 Weighted average number of shares used in Statutory Earnings Per Share calculation of 1,653 million (June 2023: 1,818 million) excludes unallocated treasury
shares.
2 Weighted average number of shares used in Diluted Earnings Per Share calculation of 1,670 million (June 2023: 1,877 million) excludes unallocated treasury
shares and is adjusted for the effects of all dilutive potential ordinary shares.
2024
2023
$M
$M
Statutory profit attributable to members of Qantas
1,255
1,746
NUMBER OF SHARES
2024
2023
Number
Number
M
M
Issued shares as at 1 July
1,724
1,886
Shares bought back1
(156)
(162)
Issued shares as at 30 June
1,568
1,724
Weighted average number of shares for the year1
1,659
1,824
1 This includes 2.9 million shares ($17 million) that were purchased during the 2023/24 financial year but not settled until July 2024.
4
REVENUE AND OTHER INCOME
(A)
REVENUE AND OTHER INCOME BY GEOGRAPHIC AREA
2024
2023
$M
$M
Net passenger and freight revenue
Australia
14,924
13,785
Overseas
5,190
4,518
Total net passenger and freight revenue
20,114
18,303
Other revenue and income
1,825
1,512
Total revenue and other income
21,939
19,815
Net passenger and freight revenue is attributed to a geographic region based on the point of sale, or where not directly
available, on a pro-rata basis. Other revenue and income is not allocated to a geographic region as it is impractical to do so.
(B)
OTHER REVENUE AND INCOME
2024
2023
$M
$M
Frequent Flyer marketing revenue and other Qantas Loyalty businesses1
1,122
868
Qantas Marketplace and other redemption revenue1,2
94
79
Third-party services revenue
286
271
Other revenue and income
323
294
Total other revenue and income
1,825
1,512
1 Where the Group acts as an agent for Qantas Loyalty redemptions, an adjustment is made within consolidation eliminations to present these redemptions on a
net basis.
2 Qantas Marketplace and other redemption revenue excludes redemptions on Qantas Group flights, which are reported as net passenger revenue in the
Consolidated Income Statement.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
77
5
DEPRECIATION AND AMORTISATION
2024
2023
Notes
$M
$M
Property, plant and equipment
15
1,429
1,351
Right of use assets
16(A)
295
320
Intangible assets
17
49
91
Total depreciation and amortisation
1,773
1,762
6
NET GAIN ON DISPOSAL OF ASSETS
2024
2023
$M
$M
Net gain on disposal of property, plant and equipment
(20)
(2)
Net loss on disposal of inventory
2
–
Net gain on disposal of investment/associates
–
(2)
Total net gain on disposal of assets
(18)
(4)
The net gain on disposal of property, plant and equipment in the 2023/24 financial year includes a net gain of ($4) million
arising from the disposal of Perth Airport assets.
In the 2022/23 financial year, the Group recognised a net gain on disposal of investments/associates of ($2) million that
arose from the sale of the Group’s investment in Helloworld Travel Ltd (ASX: HLO).
7
OTHER EXPENDITURE
$M
$M
Technology and digital
672
541
Commissions and other selling costs
608
577
Capacity hire (excluding lease components)
508
410
Hotel, holiday and tour-related costs
277
138
Marketing and advertising
195
188
Property occupancy and utility expenses
140
127
Discretionary bonuses to Non-Executive employees
11
67
Impact of discount rate changes on provisions
3
(34)
Impairment of assets and related costs
–
1
Redundancy and related costs
7
4
ACCC settlement and related costs
128
–
Other
622
493
Total other expenditure
3,171
2,512
2024
2023
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
78
8
NET FINANCE COSTS
2024
2023
Notes
$M
$M
FINANCE INCOME
Interest income on financial assets measured at amortised cost
115
135
Unwind of discount on other assets and receivables
2
3
Total finance income
117
138
FINANCE COSTS
Interest expense on financial liabilities measured at amortised cost
(276)
(264)
Interest expense on lease liabilities
16(C)
(77)
(65)
Interest paid and capitalised on qualifying assets1
15
88
31
Total finance costs on financial liabilities
(265)
(298)
Unwind of discount on provisions and other liabilities
Employee benefits provisions
(32)
(24)
Other liabilities and provisions
(21)
(33)
Total unwind of discount on other liabilities and provisions
(53)
(57)
Total finance costs
(318)
(355)
Net finance costs
(201)
(217)
1 The borrowing costs are capitalised using a 4.9 per cent interest rate (2023: 3.7 per cent).
9
INCOME TAX
(A)
INCOME TAX RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT
2024
2023
$M
$M
Current income tax expense
Current income tax – Australia
(24)
–
Current income tax – foreign
–
–
Total current income tax expense
(24)
–
Deferred income tax expense
Origination and reversal of temporary differences
(132)
(121)
Net utilisation of tax losses
(472)
(485)
Utilisation of prepaid income tax instalments
–
(117)
Current year deferred income tax expense
(604)
(723)
Benefit of tax offsets
(5)
(5)
Total deferred income tax expense
(609)
(728)
Total income tax expense in the Consolidated Income Statement
(633)
(728)
(B)
RECONCILIATION BETWEEN INCOME TAX EXPENSE AND STATUTORY PROFIT BEFORE INCOME TAX
2024
2023
$M
$M
Statutory profit before income tax expense
1,884
2,472
Income tax expense using the domestic corporate tax rate of 30 per cent
(565)
(742)
Adjusted for:
Differences in income/(loss) from investments accounted for under the equity method
–
(16)
Utilisation of previously unrecognised tax losses for foreign branches
–
4
(Losses not recognised)/utilisation of previously unrecognised losses for controlled entities
(4)
7
Non-deductible ACCC penalty
(30)
–
Recognition of previously unrecognised losses for branches and controlled entities
8
22
Other net non-deductible items
(42)
(4)
Over provision from prior periods
–
1
Income tax expense
(633)
(728)
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
79
9
INCOME TAX (CONTINUED)
(C)
INCOME TAX (EXPENSE)/BENEFIT RECOGNISED DIRECTLY IN THE CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
2024
2023
$M
$M
Income tax on:
Cash flow hedges
(26)
190
Defined benefit actuarial losses
26
44
Fair value (gains)/losses on investments
(1)
4
Income tax (expense)/benefit recognised directly in the Consolidated Statement of
Comprehensive Income
(1)
238
(D)
RECONCILIATION OF INCOME TAX EXPENSE TO INCOME TAX RECEIVABLES
2024
2023
$M
$M
Income tax expense
(633)
(728)
Adjusted for temporary differences:
Receivables
(5)
(88)
Inventories
–
2
Investments accounted for under the equity method
–
(1)
Property, plant and equipment and intangible assets
99
75
Right of use assets
–
105
Payables
3
(2)
Revenue received in advance
(42)
(2)
Interest-bearing liabilities
(43)
64
Lease liabilities
(6)
(86)
Other financial assets/(liabilities)
2
(1)
Provisions
48
1
Other items
76
54
Temporary differences
132
121
Benefit of tax offsets
5
5
Tax on taxable income before utilisation of tax losses
(496)
(602)
Tax losses utilised against current taxable income
480
507
Tax losses recognised through the Consolidated Income Statement
(8)
(22)
Prepaid tax instalments utilised
–
117
Tax on taxable income after utilisation of tax losses and prepaid tax instalments
(24)
–
Tax instalments paid
45
–
Income tax receivables
21
–
(E)
PILLAR TWO MINIMUM EFFECTIVE TAX RATE REFORM
The Organisation for Economic Cooperation and Development (OECD) introduced Global Anti-Base Erosion (GloBE) Rules at
the end of 2021 and released technical guidance for a new global minimum tax framework (Pillar Two) to ensure that
multinational enterprises with a consolidated worldwide annual turnover exceeding €750 million would be subject to a
minimum 15 per cent effective tax rate.
To provide transitional relief for Pillar Two tax compliance and administrative burden, the OECD has also introduced a
framework for Transitional Safe Harbours applicable to the Transitional Period covering fiscal years 2025 to 2027.
In several of the countries in which the Qantas Group operates, legislation on Pillar Two has been enacted and in Australia,
Exposure Draft legislation for Pillar Two and Explanatory Materials have been released for consultation.
The Qantas Group continues to evaluate how the draft legislation will apply to its operations. While it is not yet possible to
reliably estimate the potential tax exposure under Pillar Two, based on its initial assessment, the Qantas Group does not
expect any material top-up tax adjustment during the transitional period 2025 to 2026. Noting, the impact of Article 8 within
Australia’s Double Tax Treaties results in almost all of the Group’s profits being taxed in Australia where the corporate tax
rate is 30 per cent.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
80
9
INCOME TAX (CONTINUED)
(E)
PILLAR TWO MINIMUM EFFECTIVE TAX RATE REFORM (CONTINUED)
As it is difficult to assess whether Pillar Two will give rise to additional temporary differences, whether deferred tax assets
and liabilities need to be remeasured and which tax rate should be applied when calculating deferred tax, in June 2023, the
AASB issued an amendment AASB 2023-2 Amendments to Australian Accounting Standards - International Tax Reform -
Pillar Two Model Rules. The amendment provides a temporary mandatory exemption from deferred tax accounting related
to Pillar Two. The Qantas Group has applied the exemption in its Consolidated Financial Statements for the year ended
30 June 2024.
10
DIVIDENDS AND OTHER SHAREHOLDER DISTRIBUTIONS
(A)
DIVIDENDS DECLARED AND PAID
During the year ended 30 June 2024, the Group did not declare or pay any dividends.
(B)
OTHER SHAREHOLDER DISTRIBUTIONS
During the year ended 30 June 2024, the Group completed on-market buy-backs totalling $869 million of the $500 million
share buy-back that was announced in August 2023 and an additional $400 million announced in February 2024. The Group
purchased 156 million ordinary shares on issue at the average price of $5.57.
The remaining $31 million of the total $900 million buy-back has been completed in the first half of financial year 2024/25. In
August 2024, the Directors announced a further on-market share buy-back of up to $400 million.
(C)
FRANKING ACCOUNT
2024
2023
$M
$M
Total franking account balance at 30 per cent
271
1
1 The franking account balance for the Group as at 30 June 2024 is $27 million (which comprises $48 million closing balance as at 30 June 2024, adjusted for
Australian income tax receivable of $21 million).
The above amount represents the balance of the franking account as at 30 June, after taking into account adjustments for:
– Franking credits that will arise from the payment of income tax payable for the current year
– Franking debits that will arise from the receipt of income tax receivable for the current year
– Franking credits that will arise from the receipt of dividends recognised as receivables at the year end
– Franking credits that may be prevented from being distributed in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits and net assets to declare
dividends.
11
RECEIVABLES
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Trade receivables
1,056
–
1,056
876
–
876
Less: provision for expected credit losses
(5)
–
(5)
(1)
–
(1)
Total trade receivables
1,051
–
1,051
875
–
875
Sundry receivables
73
11
84
171
5
176
Total receivables
1,124
11
1,135
1,046
5
1,051
2024
2023
$M
$M
The ageing of trade receivables, net of provision for expected credit losses at 30 June was:1
Not past due
907
763
Past due 1-30 days
111
88
Past due 31-120 days
24
17
Past due 121 days or more
9
7
Total trade receivables
1,051
875
1 The Group assesses at each reporting date whether the carrying value of financial assets is impaired. Where necessary, a provision for expected credit losses
(ECL) is recognised, depending on whether there has been a significant increase in credit risk, including risk of default occurring since initial recognition. Refer
to Note 35(G) for the Group’s accounting policy.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
81
12
INVENTORIES
2024
2023
$M
$M
Engineering expendables
291
240
Consumables stores
49
50
Other inventories
3
–
Total inventories
343
290
13
ASSETS CLASSIFIED AS HELD FOR SALE
2024
Opening Net Book
Value
Transferred from
Property, Plant and
Equipment
Disposals
Reversal of
Impairment/
(Impairment)
Closing Net
Book Value
$M
Aircraft and engines
38
31
(26)
2
45
Total assets classified as held for sale
38
31
(26)
2
45
2023
Opening Net Book
Value
Transferred from
Property, Plant and
Equipment
Disposals
Reversal of
Impairment/
(Impairment)
Closing Net
Book Value
$M
Aircraft and engines
1
21
–
16
38
Total assets classified as held for sale
1
21
–
16
38
The balance as at 30 June 2024 and 30 June 2023 relates to aircraft and related assets being retired as part of the fleet
renewal program. The fair value measurement for property, plant and equipment classified as held for sale has been
categorised under the fair value hierarchy as Level 2. Refer to Note 35(C) for a definition of the fair value hierarchy.
14
INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD
Ownership interest in investments accounted for under the equity method1
June 2024
June 2023
%
%
Airport Co-ordination Australia Pty Ltd
41
41
Fiji Resorts Pte Limited
21
21
Hallmark Aviation Services L.P.
49
49
HT & T Travel Philippines, Inc.
28
28
Holiday Tours and Travel (Thailand) Ltd.
37
37
Holiday Tours and Travel Vietnam Co. Ltd.
–
37
Holiday Tours and Travel (GSA) Ltd.
37
37
Jetstar Japan Co. Ltd.
33
33
PT Holidays Tours & Travel
37
37
1 Based on voting rights.
Notes
2024
2023
$M
$M
Balance as at 1 July
25
57
Cash additions
–
75
Non-cash additions
–
9
Dividends received
(5)
(12)
Share of net profit/(loss)
4
(44)
Share of reserves and other movements
5
1
Transfer to provisions
22
10
(32)
Disposal of investments1
–
(29)
Balance as at 30 June
39
25
1 The Group recognised the disposal of investments of ($29) million in the 2022/23 financial year from the sale of the Group’s investment in Helloworld Travel Ltd
ASX: HLO).
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
82
15
PROPERTY, PLANT AND EQUIPMENT
2024
2023
$M
$M
At Cost
Accumulated
Depreciation and
Impairment
Net Book Value
At Cost
Accumulated
Depreciation and
Impairment
Net Book Value
Freehold land
9
–
9
9
–
9
Buildings
229
(190)
39
229
(188)
41
Leasehold improvements
984
(841)
143
1,032
(891)
141
Plant and equipment
1,313
(916)
397
1,285
(956)
329
Aircraft and engines
24,493
(14,619)
9,874
22,698
(13,833)
8,865
Aircraft spare parts
1,264
(605)
659
1,122
(595)
527
Aircraft deposits
2,437
–
2,437
1,937
–
1,937
Total property, plant
and equipment
30,729
(17,171)
13,558
28,312
(16,463)
11,849
2024
Opening
Net Book
Value
Cash
Additions1 Disposals Transfers2
Transferred
(to)/from
Assets
Classified as
Held for Sale
Depreciation Impairment
Other3
Closing
Net Book
Value
$M
Freehold land
9
–
–
–
–
–
–
–
9
Buildings
41
–
–
–
–
(2)
–
–
39
Leasehold improvements
141
29
–
–
–
(27)
–
–
143
Plant and equipment
329
125
–
4
(2)
(54)
–
(5)
397
Aircraft and engines
8,865
1,001
(7)
1,347
(29)
(1,260)
–
(43) 9,874
Aircraft spare parts
527
214
–
9
–
(86)
(2)
(3)
659
Aircraft deposits
1,937
1,392
–
(869)
–
–
–
(23) 2,437
Total property, plant and
equipment
11,849
2,761
(7)
491
(31)
(1,429)
(2)
(74) 13,558
2023
Opening
Net Book
Value
Cash
Additions1 Disposals Transfers2
Transferred
(to)/from
Assets
Classified as
Held for Sale
Depreciation Impairment
Other3
Closing
Net Book
Value
$M
Freehold land
9
–
–
–
–
–
–
–
9
Buildings
43
–
–
–
–
(2)
–
–
41
Leasehold improvements
171
13
–
(15)
–
(28)
–
–
141
Plant and equipment
269
99
(2)
7
–
(46)
–
2
329
Aircraft and engines
7,966
682
–
1,455
(22)
(1,226)
(17)
27 8,865
Aircraft spare parts
447
135
–
(3)
1
(49)
–
(4)
527
Aircraft deposits
1,319
1,665
–
(1,041)
–
–
–
(6)
1,937
Total property, plant and
equipment
10,224
2,594
(2)
403
(21)
(1,351)
(17)
19 11,849
1 Cash additions includes capitalised interest of $88 million (2023: $31 million).
2 Transfers includes transfers between categories of property, plant and equipment, transfers from/(to) other balance sheet accounts and transfers of leased
aircraft from right of use assets following the completion of lease buyouts.
3 Other includes non-cash movements and movements in accrued payments for property, plant and equipment (2024: ($51) million, 2023: $41 million).
(A)
AIRCRAFT BY GEOGRAPHIC AREA
Aircraft supporting the Group’s global operations are primarily located in Australia, with the exception of two A380 aircraft,
which are currently in storage overseas awaiting maintenance ahead of return to service. In addition, there are 11 A320
aircraft which are based in Singapore to support Jetstar Asia’s operations, along with seven A320 New Zealand-based
aircraft to support Jetstar New Zealand’s domestic and Trans-Tasman markets.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
83
15
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(B)
SECURED ASSETS
Certain aircraft and engines act as security against related financing facilities. Under the terms of certain financing facilities
entered into by the Qantas Group, the underwriters of these agreements have a fixed charge over certain aircraft and
engines to the extent that debt has been issued directly to those underwriters. The total carrying amount of assets under
pledge is $3,945 million (2023: $3,885 million).
(C)
CAPITAL EXPENDITURE COMMITMENTS
The Group’s capital expenditure commitments as at 30 June 2024 are $21,494 million (2023: $14,646 million). The Group has
certain rights within its aircraft purchase contracts which can defer the capital expenditure commitments.
The Group’s capital expenditure commitments are predominantly denominated in US dollars. Commitments reported above
are translated to the Group’s Australian dollar presentational currency at the 30 June 2024 closing exchange rate of $0.67
(2023: $0.68).
16
LEASES
(A)
RIGHT OF USE ASSETS
2024
2023
$M
$M
At Cost
Accumulated
Depreciation and
Impairment
Net Book
Value
At Cost
Accumulated
Depreciation and
Impairment
Net Book
Value
Aircraft
1,130
(691)
439
2,117
(1,596)
521
Property
2,168
(1,353)
815
1,896
(1,197)
699
Other
317
(256)
61
315
(232)
83
Total right of use assets
3,615
(2,300)
1,315
4,328
(3,025)
1,303
2024
Opening Net
Book Value
Additions/
Modifications/
Remeasurements
Transfers1
Depreciation
Other2
Closing Net
Book Value
$M
Aircraft
521
423
(418)
(100)
13
439
Property
699
272
–
(171)
15
815
Other
83
3
(1)
(24)
–
61
Total right of use assets
1,303
698
(419)
(295)
28
1,315
2023
Opening Net
Book Value
Additions/
Modifications/
Remeasurements
Transfers1
Depreciation
Other2
Closing Net
Book Value
$M
Aircraft
355
645
(338)
(144)
3
521
Property
565
219
–
(138)
53
699
Other
37
84
–
(38)
–
83
Total right of use assets
957
948
(338)
(320)
56
1,303
1 Transfers includes transfers of new leases to lease receivables where the Group is a sub-lessor (2024: ($1) million, 2023: nil) and transfers of aircraft to property,
plant and equipment relating to completed aircraft lease buyouts during the year (2024: ($418) million, 2023: ($338) million).
2 Other movements include foreign exchange movements and changes in the measurement of make good assets.
(B)
LEASE RECEIVABLES
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Lease receivable1
10
48
58
10
52
62
Total
10
48
58
10
52
62
1
The Group has subleased property and aircraft and classified the subleases as finance leases. The subleased portion of the right of use asset was derecognised
and the Group recognised a finance lease receivable (net investment in the finance lease). The interest income recognised on the net investment in the finance
lease was $2 million (2023: $2 million).
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
84
16
LEASES (CONTINUED)
(C)
LEASE LIABILITIES
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Aircraft
120
315
435
359
168
527
Property
240
803
1,043
190
738
928
Other
32
46
78
32
70
102
Total lease liabilities1
392
1,164
1,556
581
976
1,557
1 In addition to the lease liabilities recognised above, committed undiscounted lease payments for non-cancellable lease contracts which have not commenced
as at 30 June 2024 are $65 million (2023: $34 million). The amounts will be recognised in lease liabilities and right of use assets when the lease commences.
2024
Opening
Balance
Additions/
Modifications/
Remeasurements1
Lease
Repayments2
Interest
Foreign
Exchange
Other3
Closing
Balance
$M
Aircraft
527
423
(530)
16
(1)
–
435
Property
928
272
(219)
57
4
1
1,043
Other
102
3
(36)
4
4
1
78
Total lease liabilities
1,557
698
(785)
77
7
2
1,556
2023
$M
Opening
Balance
Additions/
Modifications/
Remeasurements1
Lease
Repayments2
Interest
Foreign
Exchange
Other3
Closing
Balance
Aircraft
375
645
(515)
12
9
1
527
Property
837
219
(191)
48
(1)
16
928
Other
60
84
(49)
5
1
1
102
Total lease liabilities
1,272
948
(755)
65
9
18
1,557
1 During the 2023/24 financial year, the Group recognised lease modifications relating to agreements to buyout leased aircraft. This resulted in a lease liability
modification and repayment of $409 million (2022/23: $322 million) recognised in financing cash flows.
2 Lease repayments of $785 million (2023: $755 million) includes $708 million (2023: $690 million) principal repayments and $77 million (2023: $65 million)
interest repayments. The 2023 lease repayments include deferred lease repayments of $2 million from financial year 2020/21.
3 Other movements include modifications to subleases which has resulted in corresponding increases to lease liabilities and finance lease receivables.
(D)
RECOGNISED WITHIN OTHER EXPENSES IN THE CONSOLIDATED INCOME STATEMENT
2024
2023
$M
$M
Lease expense for short-term leases
14
6
Variable lease expenses not included in lease liabilities1
40
58
1 Recognised in other expenditure — capacity hire.
17
INTANGIBLE ASSETS
2024
2023
$M
$M
At Cost
Accumulated
Depreciation
and Impairment
Net Book Value
At Cost
Accumulated
Depreciation
and Impairment
Net Book Value
Goodwill
270
–
270
270
–
270
Airport landing slots
35
–
35
35
–
35
Software
1,283
(1,149)
134
1,523
(1,345)
178
Brand names and trademarks
32
–
32
32
–
32
Customer contracts/relationships
19
(7)
12
19
(6)
13
Contract intangible assets
171
(16)
155
171
(12)
159
Total intangible assets
1,810
(1,172)
638
2,050
(1,363)
687
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
85
17
INTANGIBLE ASSETS (CONTINUED)
2024
Opening Net Book
Value
Cash
Additions
Acquisition of
Controlled Entities
Amortisation
Closing Net Book
Value
$M
Goodwill
270
–
–
–
270
Airport landing slots
35
–
–
–
35
Software
178
–
–
(44)
134
Brand names and trademarks
32
–
–
–
32
Customer contracts/relationships
13
–
–
(1)
12
Contract intangible assets
159
–
–
(4)
155
Total intangible assets
687
–
–
(49)
638
2023
Opening Net Book
Value
Cash
Additions
Acquisition of
Controlled Entities1
Amortisation
Closing Net Book
Value
$M
Goodwill
270
–
–
–
270
Airport landing slots
35
–
–
–
35
Software
263
–
–
(85)
178
Brand names and trademarks
40
–
(8)
–
32
Customer contracts/relationships
7
–
8
(2)
13
Contract intangible assets
163
–
–
(4)
159
Total intangible assets
778
–
–
(91)
687
1 The fair value of the assets acquired in financial year 2021/22 were subject to the completion of an independent valuation. This was finalised in financial year
2022/23, resulting in a transfer of $8 million between categories of intangible assets.
18
DEFERRED TAX (LIABILITIES)/ASSETS
2024
2023
$M
$M
Deferred tax (liabilities)/assets
(199)
367
(A)
RECONCILIATION OF DEFERRED TAX ASSETS
2024
Opening
Balance
Recognised in the
Consolidated
Income Statement
Recognised
in Other
Comprehensive
Income
Other
Closing
Balance
$M
Receivables
(7)
5
–
–
(2)
Inventories
(15)
–
–
–
(15)
Property, plant and equipment and intangible
assets
(1,408)
(99)
–
–
(1,507)
Right of use assets
(410)
–
–
–
(410)
Payables
13
(3)
–
–
10
Revenue received in advance
973
42
–
–
1,015
Interest-bearing liabilities
(183)
43
–
–
(140)
Lease liabilities
467
6
–
–
473
Other financial assets/(liabilities)
(82)
(2)
(27)
–
(111)
Provisions
559
(48)
–
–
511
Other items
(34)
(76)
26
291
(55)
Tax value of recognised tax losses
494
(472)
–
102
32
Total deferred tax assets/(liabilities)
367
(604)
(1)
39
(199)
1 An increase in deferred tax asset of $29 million relating to share-based payments recognised in retained earnings.
2 A net deferred tax asset of $10 million referable to tax losses transferred from the acquisition of the non-controlling interest of TAD Holdco Pty Limited and its
subsidiaries (TripADeal).
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
86
18
DEFERRED TAX (LIABILITIES)/ASSETS (CONTINUED)
(A)
RECONCILIATION OF DEFERRED TAX ASSETS (CONTINUED)
2023
Opening
Balance
Recognised in the
Consolidated
Income Statement
Recognised
in Other
Comprehensive
Income
Other
Closing
Balance
$M
Receivables
(114)
88
–
19
(7)
Inventories
(13)
(2)
–
–
(15)
Investments accounted for under the equity
method
(1)
1
–
–
–
Property, plant and equipment and intangible
assets
(1,333)
(75)
–
–
(1,408)
Right of use assets
(305)
(105)
–
–
(410)
Payables
11
2
–
13
Revenue received in advance
971
2
–
–
973
Interest-bearing liabilities
(119)
(64)
–
–
(183)
Lease liabilities
381
86
–
–
467
Other financial assets/(liabilities)
(277)
1
194
–
(82)
Provisions
560
(1)
–
559
Other items
(23)
(54)
44
(1)1
(34)
Tax value of prepaid tax instalments
136
(117)
–
(19)
–
Tax value of recognised tax losses
979
(485)
–
–
494
Total deferred tax assets
853
(723)
238
(1)
367
1 An increase in deferred tax liability of ($1) million relating to share-based payments recognised in retained earnings.
(B)
QANTAS GROUP CARRIED FORWARD TAX LOSSES
2024
2023
$M
$M
Total tax losses brought forward as at 1 July
(494)
(979)
Tax losses utilised against current taxable income1
480
507
Tax losses recognised through Equity2
(10)
–
Tax losses recognised through the Consolidated Income Statement3
(8)
(22)
Tax losses carried forward to be utilised in future years
(32)
(494)
1
For the 2023/24 financial year, tax losses utilised against current taxable income is comprised of $472 million Australian tax losses and $8 million New Zealand
tax losses (2023: $507 million Australian tax losses).
2 A deferred tax asset of $10 million has been recognised for income tax losses not available to be used in the 2023/24 financial year, which is expected to be
recovered in future periods, referable to the acquisition of the non-controlling interest of TAD Holdco Pty Limited and its subsidiaries (TripADeal).
3 A deferred tax asset of $8 million was recognised in the 2023/24 financial year, which is expected to be recovered in future periods, referable to New Zealand
(2023: $22 million deferred tax asset).
(C)
UNRECOGNISED DEFERRED TAX ASSETS
Deferred tax assets have not been recognised with respect to the following items:
2024
2023
$M
$M
Tax losses – New Zealand
9
16
Tax losses – Singapore
54
60
Tax losses – Hong Kong
22
24
Total unrecognised deferred tax assets
85
100
19
OTHER ASSETS
2024
2023
$M
$M
Note
Current
Non-current
Total
Current
Non-current
Total
Prepayments
357
128
485
251
160
411
Net defined benefit asset
29(B)
–
332
332
–
399
399
Other assets1
100
324
424
77
251
328
Total
457
784
1,241
328
810
1,138
1 Other assets include incremental costs of obtaining a contract. Refer to Note 35(D)vii. for the Group’s accounting policy.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
87
20
REVENUE RECEIVED IN ADVANCE
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Unavailed passenger revenue1
4,637
–
4,637
4,992
–
4,992
Unredeemed Frequent Flyer revenue
1,599
1,729
3,328
1,311
1,869
3,180
Other revenue received in advance
486
150
636
359
141
500
Total revenue received in advance
6,722
1,879
8,601
6,662
2,010
8,672
1 Unavailed passenger revenue relates to sales to passengers in advance of the date of passenger travel. The balance includes tickets with a travel date
subsequent to year end and tickets which have been transferred to a travel credit (other than Qantas COVID credits). Qantas COVID credits that remained
outstanding as at 30 June 2024 are recognised as Payables due to the change in terms and conditions announced in August 2023 effective from 31 December
2023.
21
NET ON BALANCE SHEET DEBT
(A)
CASH AND CASH EQUIVALENTS
2024
2023
$M
$M
Cash and cash at call balances
898
1,204
Short-term money market securities and term deposits
820
1,967
Total cash and cash equivalents
1,718
3,171
Cash and cash equivalents comprise cash balances, cash at call, short-term money market securities and term deposits that
are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Short-term money market securities of $220 million (2023: $292 million) held by the Qantas Group are pledged as collateral
under the terms of certain operational financing facilities when underlying unsecured limits are exceeded. The collateral
cannot be sold or repledged in the absence of default by the Qantas Group.
(B)
INTEREST-BEARING LIABILITIES
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Bank loans – secured
179
792
971
177
971
1,148
Bank loans – unsecured
–
402
402
–
402
402
Other loans – secured
29
1,965
1,994
373
1,330
1,703
Other loans – unsecured
–
1,668
1,668
249
1,667
1,916
Total interest-bearing liabilities
208
4,827
5,035
799
4,370
5,169
Certain current and non-current interest-bearing liabilities relate to specific financing of aircraft and engines and are
secured by the aircraft to which they relate (refer to Note 15(B)).
(C)
UNDRAWN FACILITIES
As at 30 June 2024, the Group has committed undrawn facilities of $1,000 million (2023: $1,196 million).
(D)
ANALYSIS OF CHANGES IN NET ON BALANCE SHEET DEBT
2024
Opening
Balance
Debt
Repayment
Debt
Drawdown
Foreign Exchange,
Mark-to-Market and
Non-Cash Movements
Shareholder
Distributions
Treasury
Share
Purchases
Other
Net Cash
Movement
Closing
Balance
$M
Interest-bearing
liabilities
5,169
(1,176)
1,011
31
–
–
–
5,035
Fair value of
hedges related to
debt
–
–
–
(6)
–
–
–
(6)
Cash
(3,171)
1,176
(1,011)
(3)
852
292
147
(1,718)
Net on balance
sheet debt
1,998
–
–
22
852
292
147
3,311
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
88
21
NET ON BALANCE SHEET DEBT (CONTINUED)
(D)
ANALYSIS OF CHANGES IN NET ON BALANCE SHEET DEBT (CONTINUED)
2023
Opening
Balance
Debt
Repayment
Debt
Drawdown
Foreign Exchange,
Mark-to-Market and
Non-Cash Movements
Shareholder
Distributions
Treasury
Share
Purchases
Other
Net Cash
Movement
Closing
Balance
$M
Interest-bearing
liabilities
5,960
(1,669)
826
52
–
–
–
5,169
Fair value of hedges
related to debt
–
–
–
–
–
–
–
–
Cash
(3,343)
1,669
(826)
4
1,000
103
(1,778)
(3,171)
Net on balance
sheet debt
2,617
–
–
56
1,000
103
(1,778)
1,998
22
PROVISIONS
2024
2023
$M
$M
Current
Non-current
Total
Current
Non-current
Total
Annual leave
461
–
461
434
–
434
Long service leave
364
53
417
353
44
397
Other employee provisions (including
redundancies)
161
–
161
188
–
188
Total employee benefits
986
53
1,039
975
44
1,019
Onerous contracts
5
–
5
7
–
7
Make good on leased assets
99
229
328
170
386
556
Insurance, legal and other1
383
142
525
120
150
270
Total other provisions
487
371
858
297
536
833
Total provisions
1,473
424
1,897
1,272
580
1,852
1 Insurance, legal and other includes a provision for the ACCC settlement for compensation, penalties and related costs and a provision for the decision of the
Federal Court of Australia that determined Qantas had contravened the adverse action provisions of the Fair Work Act in outsourcing the remainder of Qantas’
ground handling function in 2020 (refer to Note 33(B)).
Reconciliations of the movements of each class of provision, other than employee benefits, are set out below:
2024
$M
Opening
Balance
Provisions
Made
Provisions
Utilised/
Reversed
Unwind of
Discount
Discount
Rate
Changes
Transfers from
Investments in
Associates
Other/FX
Closing
Balance
Onerous contracts
7
–
(2)
–
–
–
–
5
Make good on leased assets
556
79
(320)
14
(1)
–
–
328
Insurance, legal and other
270
325
(85)
5
–
10
–
525
Total other provisions
833
404
(407)
19
(1)
10
–
858
23
CAPITAL
(A)
ISSUED CAPITAL
2024
2023
$M
$M
Opening balance: 1,724,454,680 (1 July 2022: 1,886,044,698) ordinary shares, fully paid
2,186
3,186
Shares bought back during the year: 156,194,284 (June 2023: 161,590,018) ordinary shares1
(869)
(1,000)
Closing balance: 1,568,260,396 (2023: 1,724,454,680) ordinary shares
1,317
2,186
1 This includes 2.9 million shares ($17 million) that were purchased during the 2023/24 financial year but not settled until July 2024.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholders’ meetings. In the event of wind-up, Qantas ordinary shareholders rank after all creditors and are fully
entitled to any residual proceeds on liquidation.
(B)
TREASURY SHARES
Treasury shares consist of shares held in trust for Qantas employees in relation to equity compensation plans. As at
30 June 2024, 9,923,157 (2023: 16,703,789) shares were held in trust and classified as treasury shares.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
89
23
CAPITAL (CONTINUED)
(C)
CAPITAL MANAGEMENT
The Qantas Group’s Financial Framework is designed to achieve top quartile Total Shareholder Return relative to the
ASX100 and global airline peers. The Framework’s key elements are to:
– Maintain an optimal capital structure that minimises the cost of capital by holding an appropriate level of Net Debt. The
appropriate level of Net Debt reflects the Qantas Group’s size, measured by Invested Capital. This is consistent with
investment grade credit metrics
– Deliver ROIC that exceeds the weighted average cost of capital through the cycle
– Make disciplined capital allocation decisions between reinvestment, debt reduction and distribution of surplus capital to
shareholders while maintaining an optimal capital structure.
Surplus capital is determined on a forward-looking basis, which is the difference between the projected Net Debt position
and the target Net Debt position.
The Qantas Group maintains access to a broad range of debt markets, both secured and unsecured. The Qantas Group
maintains a prudent liquidity policy that ensures adequate coverage of liquidity requirements while considering a range of
adverse scenarios.
Note
Metrics
2024
2023
Net Debt1
$3.9B to $4.9B2
$4.11B
$2.89B
Return on Invested Capital (%)
2(C)
ROIC > WACC
57.9 per cent
103.6 per cent
Net capital expenditure3
$3,148M
$2,666M
Shareholder distributions4
$869M
$1,000M
1 Net Debt is a non-statutory measure. It includes net on balance sheet debt and capitalised aircraft lease liabilities under the Group’s Financial Framework.
Capitalised aircraft lease liabilities are measured at fair value at the lease commencement date and remeasured over the lease term on a principal and interest
basis. The residual value of the capitalised aircraft lease liability denominated in a foreign currency is translated at the long-term exchange rate.
2 Target Net Debt range of $3.9 billion to $4.9 billion is based on the 12-month average Invested Capital of $3.9 billion as at 30 June 2024. The Target Net Debt
range for the 2022/23 financial year was $3.7 billion to $4.6 billion, which is based on the average Invested Capital of $2.6 billion as at 30 June 2023.
3 Net capital expenditure is a non-statutory measure which is equal to net investing cash outflows included in the Consolidated Cash Flow Statement of
$2,887 million (2023: $2,625 million) and the impact to Invested Capital from the acquisitions/disposals of leased aircraft of $261 million (2023: $41 million).
4 During the year ended 30 June 2024, the Group completed on-market buy-backs totalling $869 million, which were announced in August 2023 and February
2024. The Group purchased 156 million ordinary shares on issue at the average price of $5.57.
24
IMPAIRMENT OF ASSETS AND RELATED COSTS
(A)
IMPAIRMENT TESTING OF CASH GENERATING UNITS
i.
Identification of CGUs
The identification of an asset’s CGU is a key judgement in performing an impairment test. CGUs are the lowest identifiable
group of assets that generate largely independent cash inflows and are determined based on how performance is monitored
and how decisions to acquire and dispose of the Group’s assets and operations are made.
The identified CGUs by operating segment for the 2023/24 financial year are outlined in the table below:
Operating Segment
CGUs Identified
Qantas Domestic
Qantas Domestic CGU
Qantas International
Qantas International CGU
Qantas Freight CGU
Jetstar Group
Jetstar Australia/New Zealand CGU
Jetstar Asia CGU
Jetstar Japan CGU
Qantas Loyalty
Qantas Loyalty CGU
TripADeal CGU
ii.
Impairment Assessment
An assessment is made at the end of each reporting period as to whether there is any indication that an asset may be
impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The recoverable
amount of an asset is the higher of its fair value less costs of disposal and its value in use.
The recoverable amount is determined for an individual asset where possible, otherwise, the recoverable amount of the CGU
to which the asset belongs shall be determined.
Value in use is the present value of the future cash inflows expected to be derived from an asset or CGU.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
90
24
IMPAIRMENT OF ASSETS AND RELATED COSTS (CONTINUED)
(A)
IMPAIRMENT TESTING OF CASH GENERATING UNITS (CONTINUED)
ii.
Impairment Assessment (continued)
Fair value less costs of disposal is the price that would be received to sell an asset in an orderly transaction between market
participants at the measurement date, less the incremental costs directly attributed to disposal.
Where the carrying value of the asset exceeds its recoverable amount, the carrying amount of the asset is reduced to its
recoverable amount through the recognition of an impairment loss.
Impairment assessment of CGUs
The impairment test for CGUs includes the allocation of assets to identified CGUs and the determination of the recoverable
amount of the CGU based on its value in use. Outlined below are the significant assumptions applied in the determination of
the recoverable amount.
Significant
Assumption
How It Was Determined
Calculation of
recoverable
amount
The recoverable amounts of CGUs were determined based on their value in use. The value in use was
determined by discounting the future cash flows forecast in the Financial Plan.
Net assets
Net assets excluding cash and cash equivalents, interest-bearing liabilities and deferred tax assets/
liabilities within CGUs and any items that have been tested for impairment individually.
Cash flows –
Group
Financial Plan
Cash flows were projected based on the Board-approved Financial Plan.
Cash outflows include capital and maintenance expenditure for the purchase of aircraft and other property,
plant and equipment. These cash outflows do not include capital expenditure that enhances the current
performance of assets or capital expenditure relating to assets that commence operation beyond the
terminal year.
The Group’s Financial Plan incorporates estimates of the future impact on the Group of meeting the interim
targets in the Group’s Climate Action Plan, including the financial impact within cash flow projections of the
increased cost of carbon offsetting and SAF (together with recovery through revenue).
For the purposes of performing an impairment test, a terminal value has been been estimated. Cash flows
to determine the terminal value were extrapolated using a constant growth rate of 2.5 per cent per annum,
which does not exceed the long-term average growth rate for the industry.
Discount rate
A pre-tax discount rate of 10 per cent per annum has been used in discounting the projected cash flows of
the CGUs, reflecting the long-term average pre-tax Weighted Average Cost of Capital (WACC) of the
Qantas Group (2023: 10 per cent per annum).
Sensitivity to
significant
changes in
assumptions
Sensitivity to changes in assumptions (CGUs other than Jetstar CGUs in Asia)
The terminal year in the impairment test has the most material impact on the determination of the
recoverable amount and the surplus between the recoverable amount and carrying value of CGUs.
The earlier years in the Financial Plan, while impacting the measurement of the recoverable amount, do not
materially impact the surplus identified.
Reasonably possible changes in the Financial Plan and discount rates are unlikely to result in impairment of
the CGUs. The terminal value cash flow is in excess of the break-even cash flow and reasonably possible
changes in this assumption do not result in impairment.
Sensitivity to changes in assumptions (Jetstar CGUs in Asia)
The Group recognised impairment in the Jetstar Asia CGU of Goodwill and indefinite lived intangible assets
in the 2019/20 financial year and of property, plant and equipment and right of use assets in the 2020/21
financial year. The impairments were allocated to individual assets to the extent that the assets were not
reduced below their individual fair value less costs of disposal.
Goodwill and indefinite lived intangible assets have been fully impaired, and property, plant and equipment
and right of use assets have been impaired to individual fair value less costs of disposal. Any allocation of
CGU impairment should not reduce the asset below its individual fair value less costs of disposal. As a
result, any additional impairment would only be recognised if there was a reduction in the individual fair
value less costs of disposal of the individual assets.
Reasonably possible changes in the individual fair value less costs of disposal of individual assets are not
expected to result in material impairment.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
91
24
IMPAIRMENT OF ASSETS AND RELATED COSTS (CONTINUED)
(B)
CARRYING VALUE OF GOODWILL AND INDEFINITE LIVED INTANGIBLE ASSETS
The following CGUs have goodwill and other intangible assets with indefinite useful lives as follows:
2024
2023
$M
$M
Goodwill
Qantas Domestic CGU
14
14
Qantas Loyalty CGU
68
68
TripADeal CGU
48
48
Qantas Freight CGU
49
49
Jetstar Australia/New Zealand CGU
91
91
Total goodwill
270
270
Other intangible assets with indefinite useful lives
TripADeal CGU
32
32
Qantas International CGU
35
35
Total other intangible assets with indefinite useful lives
67
67
(C)
RESULTS OF THE GROUP’S IMPAIRMENT TEST
No impairment or impairment reversal was recognised in any of the Group’s CGUs during the year ended 30 June 2024
(2023: nil). No impairment or impairment reversal relating to other assets was recognised during the 2023/24 financial year
(2023: $1 million).
25
SHARE-BASED PAYMENTS
The Group provides benefits to Executives of the Group in the form of share-based payments, whereby Executives render
services in exchange for Rights over shares. Additionally, the Recovery Retention Plan was announced in the second half of
the 2021/22 financial year and includes share-based payments to eligible employees (both Non-Executive and Executive).
The total equity-settled share-based payment expense for the year was $69 million (2023: $188 million). Further details
regarding the operation of equity plans are outlined in the Remuneration Report from pages 32 to 62.
(A)
LONG TERM INCENTIVE PLAN (LTIP)
Generally, participation in the LTIP is limited to Senior Executives of the Qantas Group in key roles or other participants who
have been identified as high potential Executives. All Rights are redeemable on a one-for-one basis for Qantas shares,
subject to the achievement of performance hurdles. Dividends are not payable on Rights. For more information on the
operation of the LTIP, see pages 47 to 49.
Performance Rights Reconciliation
2024
2023
Number of Rights
Number of Rights
Rights outstanding as at 1 July
19,862,880
18,262,972
Rights granted during the year1
2,631,000
4,273,500
Rights forfeited during the year
(2,198,664)
(380,758)
Rights vested and converted to shares during the year
(10,440,449)
(1,143,343)
Rights lapsed during the year
(1,040,500)
(1,149,491)
Rights outstanding as at 30 June
8,814,267
19,862,880
Rights exercisable as at 30 June
–
–
1 2,606,500 Rights in relation to 2024-2026 LTIP and 24,500 Rights in relation to 2023-2025 LTIP (2023: 4,273,500 Rights in relation to 2023-2025 LTIP).
The Rights outstanding as at 30 June 2024 included 3,392,899 Rights under the 2022-2024 LTIP. 2,917,279 Rights vested
and converted to shares and 475,620 Rights forfeited following the testing of performance hurdles as at 30 June 2024 and
after applying service conditions and the Board’s approval of the 2022-2024 LTIP vesting outcome on 28 August 2024.
The shares awarded to Executive Management upon vesting of the LTIP remain subject to an additional one-year trading
restriction.
The Rights outstanding as at 30 June 2023 included 9,559,480 Rights under the 2021-2023 LTIP. 9,399,949 Rights vested
and converted to shares and 159,531 Rights forfeited following the testing of performance hurdles as at 30 June 2023 and
after applying service conditions and the Board’s approval of the 2021-2023 LTIP vesting outcome on 23 August 2023. The
shares awarded to Executive Management upon vesting of the LTIP remain subject to an additional one-year trading
restriction. On 8 August 2024, under forfeiture provisions that apply to the LTIP, the Board determined that all the restricted
shares held on behalf of the former CEO in relation to the 2021-2023 LTIP would be forfeited (1,349,000 restricted shares).
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
92
25
SHARE-BASED PAYMENTS (CONTINUED)
(A)
LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
The Rights outstanding as at 30 June 2023 included 687,000 Rights under the 2018-2020 LTIP, 651,000 Rights under the
2019-2021 LTIP and 743,000 Rights under the 2020-2022 LTIP relating to the former CEO (Mr Joyce). After agreeing in
previous years to defer the decision of vesting Rights awarded under these plans, the former CEO (Mr Joyce) elected to
convert these Rights to shares in August 2023. The following Rights vested and converted to shares 343,500 (2018-2020
LTIP), 325,500 (2019-2021 LTIP) and 371,500 (2020-2022 LTIP) and the following Rights lapsed 343,500 (2018-2020 LTIP),
325,500 (2019-2021 LTIP) and 371,500 (2020-2022 LTIP) in August 2023.
i.
Fair Value Calculation
The estimated value of Rights granted was determined at grant date using a Monte Carlo model. The weighted average fair
value of Rights granted during the year was $3.13 (2023: $4.24).
Inputs into the Models
2024
2023
3 November 2023
4 November 2022
2024-2026 LTIP
2023-2025 LTIP
Rights granted
2,606,500
4,298,000
Closing share price
$5.18
$5.97
Expected volatility
30.0%
30.0%
Dividend yield
3.8%
2.4%
Risk-free interest rate
4.3%
3.4%
The expected volatility was determined having regard to the historical volatility of Qantas shares and the implied volatility on
exchange traded options. The risk-free rate was the yield on an Australian Government Bond at the grant date matching the
remaining useful lives of the plans. The yield is converted into a continuously compounded rate in the model. The expected
life assumes immediate exercise after vesting.
(B)
SHORT TERM INCENTIVE PLAN (STIP)
For details on the operation of the STIP see pages 45 to 46. There were nil awards of Qantas shares made during the year
ended 30 June 2024 (2023: nil). On 8 August 2024, following the Board’s decision of the outcome of the 2022/23 STIP,
261,619 shares were awarded and allocated in relation to the 2022/23 STIP. Shares awarded under the 2022/23 STIP were
delivered to participants as deferred shares subject to a one-year deferral period on these shares until August 2025 and a
further one-year trading restriction until August 2026.
During the 2023/24 financial year, share-based payment expense in relation to the STIP was recognised but no deferred
shares were awarded. Deferred shares in relation to the 2023/24 STIP will be awarded in the 2024/25 financial year following
approval by the Board.
(C)
MANAGER INCENTIVE PLAN (MIP)
The MIP is the annual incentive plan for the broader Management group. Each year, to the extent that the plan’s
performance conditions are achieved, this group may receive an award that is a combination of cash and restricted shares.
The Scorecard performance outcomes are the same as those for STIP. For the Scorecard performance outcomes, refer to
the details of the operation of the STIP on pages 45 to 46. The CEO retains discretion over any awards made under the MIP.
There were 9,453,520 awards of Qantas shares made during the year ended 30 June 2024 (2023: nil). Deferred shares in
relation to the 2023/24 MIP will be awarded in the 2024/25 financial year.
(D)
RECOVERY RETENTION PLAN (RRP)
The Recovery and Retention Plan was announced in the second half of the 2021/22 financial year and includes a grant of
Rights to eligible employees (both Non-Executive and Executive) subject to both performance and service conditions. All
Rights are redeemable on a one-for-one basis for Qantas shares, subject to the achievement of performance hurdles.
Dividends are not payable on Rights.
Performance Rights Reconciliation
2024
2023
Number of Rights
Number of Rights
Rights outstanding as at 1 July
42,175,404
42,931,072
Rights granted during the year
–
1,518,750
Rights forfeited during the year
(410,546)
(2,274,418)
Rights vested and converted to shares during the year
(41,764,858)
–
Rights outstanding as at 30 June
–
42,175,404
Rights exercisable as at 30 June
–
–
As at 30 June 2024, there are no remaining rights outstanding relating to this plan.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
93
25
SHARE-BASED PAYMENTS (CONTINUED)
(D)
RECOVERY RETENTION PLAN (RRP) (CONTINUED)
i.
Fair Value Calculation
The estimated value of Rights granted was determined at grant date using a simplification of the Black-Scholes option
pricing formula. The weighted average fair value of Rights granted during 2023 was $5.92. Dividends are not payable on
Rights.
Inputs into the Models
2023
4 November 2022
Rights granted
1,518,750
Weighted average share value
$5.96
Dividend yield
0.9%
26
FINANCIAL RISK MANAGEMENT
(A)
RISKS
The Qantas Group is subject to financial risks, which are an inherent part of the operations of an airline. The Qantas Group
manages these risk exposures using various financial instruments and governed by a set of policies approved by the Board.
The Qantas Group’s policy is not to enter into, issue or hold derivative financial instruments for speculative trading
purposes.
The Qantas Group uses different methods to assess and manage different types of financial risk to which it is exposed.
These methods include correlations between risk types, sensitivity analysis in the case of interest rate, foreign exchange
and other price risks, and ageing analysis and sensitivity analysis for liquidity and credit risk. A summary of these risks has
been presented below:
Risk
Nature of Risk
Management of Risk
Liquidity risk
Difficulty in meeting financial liability
obligations.
Remaining within optimal capital structure, targeting a
minimum liquidity level, ensuring long-term commitments are
managed, maintaining access to a variety of additional funding
sources and managing maturity profiles.
Interest rate
risk
Fluctuations in the fair value or future cash
flows of a financial instrument because of
changes in market interest rates.
Floating versus fixed rate debt framework, interest rate swaps,
forward rate agreements and options.
Foreign
exchange risk
Fluctuations in the fair value of future cash
flows or assets/liabilities denominated in a
currency other than AUD because of
changes in foreign exchange rates.
Forward foreign exchange contracts, currency options, cross-
currency swaps and designation of non-derivative foreign
currency liabilities in a cash flow hedge relationship.
Fuel price risk
Exposure of future AUD fuel to
unfavourable USD-denominated price
movements and foreign exchange
movements.
USD price – options and swaps on jet kerosene, gas oil and
crude oil.
Foreign exchange risk – foreign exchange contracts and
currency options.
Credit risk
Potential loss from a transaction in the
event of a default by a counterparty
during the term or on settlement of a
transaction.
Trade debtor counterparties – use of International Air
Transport Association (IATA) clearing mechanism which
undertakes its own credit review of members, and stringent
credit policies where the Group provides credit to customers
directly.
Other financial asset counterparties – transact only with
counterparties that have acceptable credit ratings and
counterparty limits.
i.
Liquidity Risk
Nature of the risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities.
Liquidity risk management
The Qantas Group manages liquidity risk by targeting a minimum liquidity level, ensuring long-term commitments are
managed with respect to forecast available cash inflows, maintaining access to a variety of additional funding sources,
including commercial paper and standby facilities, managing maturity profiles and maintaining an unencumbered pool of
assets. Qantas may from time to time seek to purchase and retire outstanding debt through cash purchases in open market
transactions, privately negotiated transactions or otherwise. Any such repurchases would depend on prevailing market
conditions, liquidity requirements and possibly other factors.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
94
26
FINANCIAL RISK MANAGEMENT (CONTINUED)
(A)
RISKS (CONTINUED)
i.
Liquidity Risk (continued)
The Qantas Group has maintained a prudent liquidity policy during the 2023/24 financial year, ensuring adequate coverage
of liquidity requirements while considering a range of adverse scenarios. As at 30 June 2024, the Group’s total sources of
liquidity were greater than $10 billion, including $1.7 billion of cash and cash equivalents, $1.0 billion in committed undrawn
facilities and an unencumbered asset base of $7.5 billion, including 64 per cent of the Group’s fleet, spare engines and other
assets. The unencumbered asset base includes aircraft valuations based on AVAC as at 30 June 2024.
The following table summarises the contractual timing of cash flows, including estimated interest payments, of financial
liabilities and derivative instruments. The contractual amount assumes current interest rates and foreign exchange rates.
The amounts disclosed in the table are undiscounted.
2024
Less Than
1 Year
2 to 3 Years
4 to 5 Years
More Than
5 Years
Total
$M
Financial liabilities
Payables
2,908
–
–
–
2,908
Lease liabilities1
392
556
357
496
1,801
Bank loans – secured2
244
441
342
152
1,179
Bank loans – unsecured2
24
49
49
424
546
Other loans – secured2
137
273
453
2,092
2,955
Other loans – unsecured2
66
425
596
917
2,004
Net other financial assets/liabilities – outflows/
(inflows)3
(39)
(2)
(2)
(6)
(49)
Total financial liabilities
3,732
1,742
1,795
4,075
11,344
2023
Less Than
1 Year
2 to 3 Years
4 to 5 Years
More Than
5 Years
Total
$M
Financial liabilities
Payables
2,732
–
–
–
2,732
Lease liabilities1
581
507
307
472
1,867
Bank loans – secured2
276
536
447
558
1,817
Bank loans – unsecured2
23
45
45
445
558
Other loans – secured2
412
432
244
523
1,611
Other loans – unsecured2
322
133
411
1,461
2,327
Net other financial assets/liabilities – outflows/
(inflows)3
(16)
333
–
–
317
Total financial liabilities
4,330
1,986
1,454
3,459
11,229
1 This represents the Group’s contractual undiscounted cash flows relating to leases.
2 Recognised financial liability maturity values are shown pre-hedging.
3 Excluding equity investments but includes the undiscounted estimate of the put option liability (2024: nil, 2023: $333 million).
ii.
Interest Rate Risk
Nature of the risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Qantas Group has exposure to movements in interest rates arising from its portfolio of
interest rate sensitive assets and liabilities, which are predominantly in AUD and USD currencies. These principally include
corporate debt, leases and cash.
Management of interest rate risk
The Qantas Group manages interest rate risk by using a floating versus fixed rate debt framework. The relative mix of fixed
and floating interest rate funding is managed by using interest rate swaps, forward rate agreements and options. As at
30 June 2024, interest-bearing liabilities amounted to $5,035 million (2023: $5,169 million).
The fixed/floating split is 44 per cent and 56 per cent respectively (2023: 52 per cent and 48 per cent). The Group manages
its exposure to interest rate risk with reference to the Group’s Financial Framework where the fixed/floating ratio is
measured against Net Debt. The Group’s Net Debt is a non-statutory measure and includes on balance sheet debt, cash and
capitalised aircraft lease liabilities. The ratio of fixed/floating on Net Debt is 63 per cent and 37 per cent respectively, which
assumes cash is treated as floating (2023: 100 per cent and nil per cent). As at 30 June 2024, other financial assets and
liabilities, including derivative financial instruments relating to debt obligations and future interest payments, were $6
million (asset) (2023: nil). These are recognised at fair value.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
95
26
FINANCIAL RISK MANAGEMENT (CONTINUED)
(A)
RISKS (CONTINUED)
ii.
Interest Rate Risk (continued)
Sensitivity to interest rate risk
$M
Profit/(Loss) Before Tax
Equity (Before Tax)1
2024
2023
2024
2023
100bps increase in interest rates2,3
Variable rate interest-bearing instruments (net of cash)
(16)
3
–
–
100bps decrease in interest rates2,3
Variable rate interest-bearing instruments (net of cash)
16
(2)
–
–
1 Equity (Before Tax) does not include sensitivity recognised in Profit/(Loss) Before Tax.
2 Sensitivity analysis of financial instruments assume hedge designations as at 30 June 2024 remain unchanged.
3 Sensitivity analysis excludes impact of discount rate movements on provisions.
Under AASB 16, interest rate movements on lease liabilities are treated as modifications against the corresponding right of
use asset and lease liability. As such, there is no immediate impact to the Consolidated Income Statement or Other
Comprehensive Income and as a result, interest rate movements on lease liabilities are not included as an interest rate
sensitivity.
iii.
Foreign Exchange Risk
Nature of the risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the functional currency of the Group. The Group operates internationally and is exposed to foreign
exchange risk, primarily the USD currency. The source and nature of this risk arises from operations, capital expenditure and
revaluation risk. The revaluation risk primarily exists in interest-bearing liabilities, lease liabilities and other financial assets
and liabilities. The Group hedges foreign exchange risk with the objective of minimising volatility of the Australian currency
cost of highly probable forecast purchases and disposals of property, plant and equipment and other revenue and operating
expenditures.
Management of foreign exchange risk
Forward foreign exchange contracts and currency options are used to hedge a portion of net foreign currency exposures in
accordance with Qantas Group policy. Net foreign currency exposures, including foreign currency purchases and disposals
of property, plant and equipment, may be hedged out to two years within specific parameters. Any hedging outside these
parameters requires approval by the Board. For the year ended 30 June 2024, other financial assets and liabilities, including
derivative financial instruments relating to the hedging of future capital expenditure, totalled $12 million (net asset) (2023:
$15 million (net asset)) and those relating to the hedging of future operating expenditure payments were nil (2023: nil).
These are recognised at fair value.
Non-derivative financial liabilities, including interest-bearing liabilities designated in a cash flow hedge relationship to hedge
forecast foreign currency revenue. These interest-bearing liabilities have a maturity between one and 12 years. To the extent
a foreign exchange gain or loss is incurred, and the cash flow hedge is deemed effective, this is deferred until the revenue is
realised. As at 30 June 2024, total unrealised foreign exchange gains on hedges of revenue designated to non-derivative
financial liabilities was $2 million (2023: $3 million losses).
Sensitivity to foreign exchange risk
$M
Profit Before Tax
Equity (Before Tax)1
2024
2023
2024
2023
20% movement in foreign exchange risk2,3
20% (2023: 20%) USD depreciation
(44)
–
(133)
(137)
20% (2023: 20%) USD appreciation
44
–
198
222
20% (2023: 20%) JPY depreciation
–
–
(9)
(10)
20% (2023: 20%) JPY appreciation
–
–
9
10
1 Equity (Before Tax) does not include sensitivity recognised in Profit/(Loss) Before Tax.
2 Sensitivity analysis assumes hedge designations as at 30 June 2024 remain unchanged. Movements disclosed in the sensitivity analysis are impacted by the
Group’s hedge strategy and the hedge instruments used. Sensitivity analysis on foreign currency pairs of 20 per cent represent reasonable volatility in market
conditions.
3 Sensitivity analysis includes foreign currency interest-bearing liabilities, lease liabilities and derivatives designated in a hedge relationship and excludes foreign
currency receivables and non-fuel payables.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
96
26
FINANCIAL RISK MANAGEMENT (CONTINUED)
(A)
RISKS (CONTINUED)
iv.
Fuel Price Risk
Nature of the risk
Exposure of future AUD fuel costs to unfavourable USD-denominated price and foreign exchange movements.
Management of future AUD fuel costs risk
The Qantas Group uses options and swaps on jet kerosene, gas oil and crude oil to hedge exposure to movements in the
USD price of aviation fuel. The Group considers the crude component to be a separately identifiable and measurable
component of aviation fuel. In identifying this component, the Group considers long-term correlation levels between crude
hedging products and underlying jet fuel exposure. The foreign exchange risk in the total fuel cost is separately hedged
using foreign exchange contracts and currency options. Hedging is conducted in accordance with Qantas Group policy. Fuel
consumption out to two years may be hedged within specific parameters, with any hedging outside these parameters
requiring approval by the Board. For the year ended 30 June 2024, other financial assets and liabilities included fuel and
foreign exchange derivatives totalling $202 million (net asset) (2023: $97 million (net asset)). These are recognised at fair
value.
Sensitivity to foreign exchange and fuel price risk
$M
Profit Before Tax
Equity (Before Tax)1
2024
2023
2024
2023
20% movement in AUD fuel costs2
20% (2023: 20%) USD depreciation, 20% (2023: 20%) increase
per barrel in fuel indices
–
–
212
31
20% (2023: 20%) USD appreciation, 20% (2023: 20%) decrease
per barrel in fuel indices
–
–
253
248
1 Equity (Before Tax) does not include sensitivity recognised in Profit/(Loss) Before Tax.
2 Sensitivity analysis of financial instruments assumes hedge designations as at 30 June 2024 remain unchanged. Movements disclosed in the sensitivity analysis
are impacted by the Group’s hedge strategy and the hedge instruments used. Sensitivity analysis on foreign currency pairs and fuel indices of 20 per cent
represents reasonable volatility in market conditions. Sensitivity analysis assumes an offset between USD and fuel price indices based on observed market
movements.
v.
Credit Risk
Nature of the risk
Credit risk is the potential loss from a transaction in the event of default by the counterparty during the term of the
transaction or on settlement of the transaction. The Group has credit exposure in respect of trade receivables and other
financial instruments in the ordinary course of business. The maximum exposure to credit risk is represented by the carrying
value of financial assets.
Management of credit risk
The Qantas Group conducts transactions with the following major types of counterparties:
– Trade debtor counterparties: The credit risk is the recognised amount, net of any impairment losses. As at 30 June 2024,
trade debtors amounted to $1,051 million (2023: $875 million). The Qantas Group has credit risk associated with travel
agents, codeshare partners, industry settlement organisations, and credit provided to direct customers, such as large
airline, loyalty and freight corporate customers. A significant proportion of receivables is settled through the IATA
clearing mechanism which undertakes its own credit review of members. The Qantas Group minimises this credit risk
through the application of stringent credit policies and accreditation of travel agents through industry programs
– Other financial asset counterparties: The Qantas Group restricts its dealings to counterparties that have acceptable
credit ratings. Should the rating of a counterparty fall below certain levels, internal policy dictates that approval by the
Board is required to maintain the level of the counterparty exposure. Alternatively, Management may consider closing out
positions with the counterparty or novate open positions to another counterparty with acceptable credit ratings.
The Qantas Group minimises the concentration of credit risk by undertaking transactions with a large number of customers
and counterparties in various countries in accordance with Board-approved policy. As at 30 June 2024, the credit risk of the
Qantas Group to counterparties in relation to other financial assets, cash and cash equivalents, and other financial liabilities
amounted to $1,989 million (2023: $3,368 million). Refer to Note 26(C) for offsetting disclosures of contractual
arrangements. The Qantas Group’s credit exposure in relation to these assets is with counterparties that have a minimum
credit rating of A-/A3, unless individually approved by the Board.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
97
26 FINANCIAL RISK MANAGEMENT (CONTINUED)
(B)
FAIR VALUE
The fair value of cash, cash equivalents and non-interest-bearing financial assets and liabilities approximates their carrying
value due to their short maturity. The fair value of financial assets and liabilities is determined by valuing them at the present
value of future contracted cash flows. The fair value of forward foreign exchange and fuel contracts is determined as the
unrealised gain/loss at balance date by reference to market exchange rates and fuel prices. The fair value of interest rate
swaps is determined as the present value of future contracted cash flows. Cash flows are discounted using standard
valuation techniques at the applicable market yield, having regard to the timing of the cash flows. The fair value of options is
determined using standard valuation techniques. Other financial assets and liabilities represent the fair value of
investments, put option liability and derivative financial instruments recognised on the Consolidated Balance Sheet. Refer to
Note 35(C) for a definition of the fair value hierarchy.
June 2024
June 2023
Carrying Amount Held at
Carrying Amount Held at
$M
Fair Value
Through Profit
and Loss
Fair Value
Through Other
Comprehensive
Income3
Amortised
Cost
Fair
Value
Fair Value
Through Profit
and Loss
Fair Value
Through Other
Comprehensive
Income3
Amortised
Cost
Fair
Value
Cash and cash equivalents
–
–
1,718
1,723
–
–
3,171 3,180
Receivables
–
–
1,135
1,135
–
–
1,051
1,051
Other financial assets1
299
105
49
453
194
101
78
373
Financial assets
299
105
2,902
3,311
194
101
4,300 4,604
Payables
–
–
2,908 2,908
–
–
2,732 2,732
Interest-bearing liabilities2
–
–
5,035 5,302
–
–
5,169
5,311
Other financial liabilities1
74
–
–
74
82
280
–
362
Financial liabilities
74
–
7,943 8,284
82
280
7,901 8,405
1 Other financial assets and liabilities represents the fair value of equity investments, the put option liability and derivative financial instruments recognised on
the Consolidated Balance Sheet. Derivative financial instruments have been measured at fair value using Level 2 inputs in estimating their fair values. Equity
instruments have been measured at fair value using Level 1 or Level 2 inputs in estimating their fair value. The put option liability is measured at the present
value of the forecast amount expected to be paid under the put option calculation, using Level 3 inputs. Subsequent movements are recognised within the put
option reserve. As at 30 June 2024, the put option reserve is nil (2023: $280 million).
2 The fair value of interest-bearing liabilities uses level 2 inputs to calculate the present value of outstanding contractual cash flows discounted using market
curves.
3 As at 30 June 2024, $96 million of the $105 million (2023: $92 million of the $101 million) of other financial assets relate to the Group’s investment in Alliance
Airlines Limited (ASX: AQZ), which has been accounted for as an investment held at fair value through other comprehensive income.
During the year, the Group recognised fair value changes in relation to listed and unlisted equity investments, net of tax in
other comprehensive income of $3 million gain (2023: ($12) million loss). The Group recognised fair value changes, net of tax
of $3 million gain (2023: ($15) million loss) in respect of listed equity investment using Level 1 inputs. The Group recognised
fair value changes, net of tax of nil (2023: nil) in respect of unlisted equity investments using Level 2 inputs. The Group
recognised fair value changes, net of tax of nil (2023: $3 million gain) and new acquisitions of $5 million (2023: nil) in respect
of unlisted equity investments using Level 3 inputs.
(C)
DERIVATIVES AND HEDGING INSTRUMENTS
The following section summarises derivative financial instruments in the Consolidated Financial Statements:
Type of Hedge
Description
Derivative
Cash flow
hedges
A derivative or financial
instrument to hedge the exposure
to variability in cash flows
attributable to a particular risk
associated with an asset, liability
or forecast transaction.
Exchange derivative contracts to hedge future AUD fuel costs and
foreign currency operational payments (forwards, swaps or options).
Interest rate derivative contracts to hedge future interest payments
(forwards, swaps or options).
Foreign exchange derivative contracts to hedge future capital
expenditure payments (forwards or options).
Fair value
hedges
A derivative or financial
instrument designated as hedging
the change in fair value of an asset
or liability.
Contracts to hedge the fair value movement of a designated asset or
liability.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
98
26 FINANCIAL RISK MANAGEMENT (CONTINUED)
(C)
DERIVATIVES AND HEDGING INSTRUMENTS (CONTINUED)
The Group’s derivative assets and liabilities as at 30 June 2024 are detailed below:
$M
2024
2023
Current
Non-current
Total
Current
Non-current
Total
Derivative assets
Designated as cash flow hedges
212
76
288
144
50
194
Designated as fair value hedges
–
6
6
–
–
–
Total derivative assets
212
82
294
144
50
194
Derivative liabilities
Designated as cash flow hedges
(41)
(33)
(74)
(51)
(31)
(82)
Total derivative liabilities
(41)
(33)
(74)
(51)
(31)
(82)
Net derivative assets
171
49
220
93
19
112
i.
Offsetting
The Group enters into contractual arrangements such as the International Swaps and Derivatives Association (ISDA) Master
Agreement where, upon the occurrence of a credit event (such as default), a termination value is calculated and only a single
net amount is payable in settlement of all transactions that are capable of offset under the terms of the contract. The ISDA
agreements do not meet the criteria for offsetting in the Consolidated Balance Sheet and consequently, financial assets and
liabilities are recognised as gross. This is because the Group does not have any current legally enforceable right to offset
recognised amounts, as the right to offset is enforceable only on the occurrence of future events. The amounts shown as
financial assets and financial liabilities would each have been $74 million lower (2023: $82 million lower) in the event of the
right to offset being currently enforceable.
ii.
Hedge Reserve
The effective portion of the cumulative net change in the fair value of derivative financial instruments designated as a cash
flow hedge and the cumulative change in fair value arising from the time value of options are included in the hedge reserve.
These options relate entirely to transaction-related hedged items. For further information on accounting for derivative
financial instruments as cash flow hedges, refer to Note 35(C). Based on the hedge reserve balance as at 30 June 2024,
$14 million gain net of tax (2023: ($48) million loss net of tax) is expected to be released to the Consolidated Income
Statement within one year and $4 million gain net of tax (2023: ($8) million loss net of tax) after one year. An ($8) million loss
net of tax (2023: $6 million gain net of tax) is expected to be capitalised to assets within one year and ($1) million loss (2023:
nil) after one year. Other financial assets and liabilities represent the fair value of derivative financial instruments recognised
on the Consolidated Balance Sheet. Refer to Note 35(C) for a definition of the fair value hierarchy.
iii.
Hedge Accounting
As at
30 June 2024
Nominal
Amount of
Hedging
Instrument
and Hedged
Item
Hedge
Rates
Carrying Amount
of the Hedging
Instrument1,2
Change in Value of
the Hedging
Instrument Used for
Calculating Hedge
Ineffectiveness
Change in Value of
the Hedged Item
used for Calculating
Hedge
Ineffectiveness
Change in Value of
the Hedging
Instrument
Recognised
in Other
Comprehensive
Income
Amount
Reclassified
from the Cash Flow
Hedge Reserve to
Profit or Loss
Assets
Liabilities
M
$M
$M
$M
$M
$M
$M
$M
Cash flow hedges
AUD fuel costs
(up to 2 years)
27 Barrels
AUD /
Barrel
115-148
268
(67)
137
(137)
137
(133)
Revenue
(up to 12 years)
341 USD
AUD /
USD
0.65 -
0.72
–
(341)
(22)
22
(22)
24
Revenue
(up to 10 years)
42 JPY
AUD /
JPY
90
–
(42)
4
(4)
4
–
Capital
expenditure
(up to 2 years)
1,227 USD
AUD /
USD
0.64 -
0.66
20
(7)
1
(1)
1
–
Fair value hedges
Interest rate
(up to 10 years)
375 AUD
Floating
n/a
6
–
6
(6)
–
–
1 Derivative cash flow hedging instruments are located within other financial assets and other financial liabilities on the Consolidated Balance Sheet and include
costs of hedging. The carrying amount of the hedging instrument is presented in AUD where the hedged item equals the nominal amount of the hedging
instrument.
2 The revenue hedging instrument is a non-derivative financial liability with the carrying amount presented in AUD, and is located within interest-bearing
liabilities and lease liabilities.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
99
27
AUDITOR’S REMUNERATION
2024
2023
$'000
$'000
STATUTORY ASSURANCE SERVICES
Audit and review of Financial Reports
4,382
3,960
Total statutory assurance services
4,382
3,960
OTHER ASSURANCE SERVICES
Regulatory assurance services
12
13
Other assurance services
572
319
Total other assurance services
584
332
NON-ASSURANCE SERVICES
Audit-related non-assurance services
7
5
Taxation services
338
175
Other non-assurance services
238
94
Total non-assurance services
583
274
Total auditor's remuneration
5,549
4,566
28
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
RECONCILIATION OF STATUTORY PROFIT FOR THE YEAR TO NET CASH FROM OPERATING ACTIVITIES
2024
2023
Notes
$M
$M
Statutory profit for the year
1,251
1,744
Adjusted for:
Depreciation and amortisation
5
1,773
1,762
Impairment of assets and related costs
7
–
1
Hedging-related activities
47
(149)
Share of net (profit)/loss of investments accounted for under the equity method
14
(4)
44
Share-based payments expense
25
69
188
Net gain on disposal of assets
6
(18)
(4)
Impact of discount rate changes on provisions
7
3
(34)
Dividends received from investments accounted for under the equity method
14
5
12
Other items
59
43
Changes in other balance sheet items:
Receivables
(166)
(13)
Inventories
(106)
(58)
Other assets
(176)
(162)
Payables
(89)
271
Revenue received in advance
206
741
Provisions
3
(28)
Deferred tax assets/liabilities and tax receivables/payables
584
727
Net cash inflow from operating activities
3,441
5,085
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
100
29
SUPERANNUATION
The Qantas Superannuation Plan (QSP) is a hybrid defined benefit/defined contribution fund with multiple divisions that
commenced operation in June 1939. In addition to the QSP, there are other small overseas defined benefit plans. The Qantas
Group makes contributions to defined benefit plans that provide defined benefit amounts for employees upon retirement.
Under these plans, employees are entitled to retirement benefits determined, at least in part, by reference to a formula
based on years of membership and salary levels.
The defined benefit plans are legally separated from the Qantas Group. Responsibility for governance of the plans, including
investment decisions and plan rules, rests solely with the Trustee of the plan. The Trustee of the QSP is a corporate trustee
which has a Board comprising five company-appointed Directors and Five member-elected Directors.
The QSP’s defined benefit plan exposes the Group to a number of risks, the most significant of which are detailed below:
– Investment risk: The investment strategy for the assets attributable to the QSP’s defined benefit liabilities is to
progressively de-risk the defined benefit investment portfolio as the funding position improves over time. If investment
returns underperform expectations, the Group may be required to provide additional funding to the QSP
– Interest rate risk: Changes in bond yields, such as a decrease in corporate bond yields, will increase defined benefit
liabilities through the discount rate assumed
– Inflation risk: The defined benefit liabilities are linked to salary inflation, and higher salary inflation will lead to higher
liabilities.
In July 2024, the Trustee Board of QSP announced an agreement to merge with Australian Retirement Trust (ART). This
agreement confirms both parties’ commitment to merge and sets out the framework that will be used by each Trustee to
prepare for the implementation of a merger. Implementation of the merger will be subject to both Qantas Super and ART
completing the final assessments of their respective members’ best financial interests and equivalency of rights in relation
to benefits and signing a Successor Fund Transfer Deed.
(A)
FUNDING
Employer contributions to the defined benefit divisions of the QSP are based on recommendations by the QSP’s plan
actuary. It is estimated that $63 million of normal employer contributions will be paid by the Qantas Group to its defined
benefit plans in financial year 2024/25.
In addition, the Trustee of the QSP and the Group have in place an Additional Funding Plan (AFP), last agreed in 2023 (as
part of the agreed Defined Benefit Contribution Strategy following the 2022 triennial actuarial valuation of the QSP), which is
an evergreen restoration plan and addresses the requirements of Australian Prudential Regulation Authority (APRA)
Prudential Standard SPS 160. The determination of Qantas’ additional employer contributions under the AFP is triggered if
the quarterly determination of the Defined Benefit Vested Benefits Index (DB VBI) indicates that the DB VBI has been below
100 per cent for two consecutive quarters, or the value of the DB VBI has fallen from a value in excess of 100 per cent at the
previous quarter to a value that is less than 96 per cent. The DB VBI is the ratio of the QSP’s assets attributable to the
defined benefit liabilities to the total defined benefit amount that the QSP would be required to pay if all members were to
voluntarily leave the plan on the funding valuation date. Additional benefit payment top-up contributions may also be
payable if after two consecutive quarters, the DB Retrenchment Benefits Index (DB RBI) is less than 100 per cent and
retrenchments occur that place a greater than VBI level of funding strain on the Plan assets. The DB RBI is the ratio of the
QSP’s assets attributable to the defined benefit liabilities to the total defined benefit component of retrenchment benefits in
respect of DB members. The last additional contribution required under the AFP was paid into the QSP by the Group in
December 2016. The QSP’s financial position is monitored by the Trustee each quarter.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
101
29
SUPERANNUATION (CONTINUED)
(B)
MOVEMENT IN NET DEFINED BENEFIT (ASSET)
Present Value of
Obligation
Fair Value of Plan
(Assets)
Net Defined Benefit
(Asset)1
$M
$M
$M
2024
2023
2024
2023
2024
2023
Balance as at 1 July
1,565
1,405
(1,964)
(1,944)
(399)
(539)
Included in the Consolidated Income Statement
Current service cost
82
76
–
–
82
76
Interest expense/(income)
92
78
(109)
(99)
(17)
(21)
Contributions by plan participants
–
–
(20)
(19)
(20)
(19)
Total amount included in salaries, wages and other benefits
174
154
(129)
(118)
45
36
Included in the Consolidated Statement of Comprehensive
Income
Return on plan assets, excluding interest income
–
–
(20)
10
(20)
10
(Gains)/losses from change in demographic assumptions
(1)
42
–
–
(1)
42
Losses from change in financial assumptions
15
46
–
–
15
46
Experience losses
93
51
–
–
93
51
Exchange differences on foreign plans
2
5
(2)
(6)
–
(1)
Total amount recognised in other comprehensive income
109
144
(22)
4
87
148
Contributions by employer
–
–
(65)
(41)
(65)
(41)
Benefit payments
(142)
(137)
142
137
–
–
Other movements
–
(1)
–
(2)
–
(3)
Balance as at 30 June
1,706
1,565
(2,038)
(1,964)
(332)
(399)
1 The net defined benefit asset is included in non-current other assets (refer to Note 19).
(C)
PLAN ASSETS
The major categories of plan assets as a percentage of total plan assets of the Group’s defined benefit plans are as follows:
2024
2023
%
%
Australian equity1,2
11
11
Global equity1
– United States
8
9
– Europe
2
1
– Japan
1
1
– Other
3
5
Private equity
7
8
Fixed interest1
– Government bonds
13
9
– Other
29
30
Hedge funds
2
2
Property and infrastructure
2
2
Derivatives
1
–
Agriculture
5
5
Insurance policies
4
4
Cash and cash equivalents1
12
13
Total
100
100
1 The majority of these plan assets have a quoted market price in an active market.
2 As at 30 June 2024, QSP assets in shares of Qantas Airways Limited (ASX:QAN) are $857,024 (2023: $968,465).
The Trustee of the QSP is responsible for setting the investment strategy and objectives for the QSP’s assets to support the
defined benefit liabilities. The QSP does not use any asset-liability matching strategies. It utilises traditional investment
management techniques to manage the defined benefit assets.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
102
29
SUPERANNUATION (CONTINUED)
(D)
ACTUARIAL ASSUMPTIONS AND SENSITIVITY
The significant actuarial assumptions (expressed as weighted averages per annum) were as follows:
2024
2023
%
%
Discount rate
5.6
5.6
Long-term future salary increase1
3.0
3.0
1 For the 30 June 2024 actuarial calculation, salary increase rates were assumed for years 1 to 5, averaging 2.5 per cent and then 3 per cent for the remaining
duration of the plan (30 June 2023: salary increases averaging 2.6 per cent for years 1 to 5 and 3 per cent for the remaining duration of the plan were assumed).
The weighted average duration of the QSP’s defined benefit obligation as at 30 June 2024 was nine years (2023: nine years).
The sensitivity of the defined benefit obligation to changes in the significant assumption is as follows:
Impact on Defined Benefit Obligation
30 June 2024
30 June 2023
Change in
Assumption
Increase in
Assumption
Decrease in
Assumption
Increase in
Assumption
Decrease in
Assumption
Discount rate
1%
Decrease by 9.4% Increase by 10.8%
Decrease by 9.8%
Increase by 11.4%
Future salary increase
1%
Increase by 4.4%
Decrease by 4.0%
Increase by 4.8%
Decrease by 4.4%
Defined Contribution Fund
A defined contribution expense of $250 million has been recognised for the year ended 30 June 2024 (2023: $199 million).
30
DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 (Instrument), the wholly-owned entities
identified below are relieved from the Corporations Act 2001 (Cth) requirements for preparation, audit, distribution and
lodgement of Financial Statements and Directors’ Reports:
AAL Aviation Limited
Network Aviation Pty Ltd
Qantas Group Flight Training Pty Limited
Airlink Pty Limited
Network Holding Investments Pty Ltd
Qantas Information Technology Ltd
Australian Air Express Pty Ltd
Network Turbine Solutions Pty Ltd
Qantas Road Express Pty Limited
Australian Airlines Limited
Osnet Jets Pty Ltd
Qantas SAFFA Pty Limited
Australian Regional Airlines Pty. Ltd.
Phone A Flight Pty Ltd
Qantas Ventures Pty Limited
Eastern Australia Airlines Pty. Limited
Q H Tours Ltd
Qantas Wheatbelt Connect Pty Limited
Express Freighters Australia (Operations) Pty Limited Qantas Asia Investment Company Pty Ltd
QF Cabin Crew Australia Pty Limited
Express Freighters Australia Pty Limited
Qantas Courier Limited
Regional Airlines Charter Pty Limited
Impulse Airlines Holdings Proprietary Limited
Qantas Domestic Pty Limited
Sunstate Airlines (Qld) Pty. Limited
Jetstar Airways Pty Limited
Qantas Freight Enterprises Limited
TAD Holdco Pty Ltd
Jetstar Asia Holdings Pty Limited
Qantas Freight Terminals Pty Limited
The Network Holding Trust
Jetstar Group Pty Limited
Qantas Frequent Flyer Limited
The Network Trust
Jetstar Services Pty Limited
Qantas Frequent Flyer Operations Pty Limited
Trip A Deal Holdings Pty Ltd
National Jet Operations Services Pty Ltd
Qantas Ground Services Pty Limited
Trip A Deal Pty Ltd
National Jet Systems Pty Ltd
Qantas Group Accommodation Pty Ltd
Vii Pty Limited
Network Aviation Holdings Pty Ltd
Qantas Group Flight Training (Australia) Pty
Limited
It is a condition of the Instrument that Qantas and each of the controlled entities eligible to obtain relief under the Instrument
enter into a Deed of Cross Guarantee (Deed). Under the Deed, Qantas guarantees to each creditor payment in full of any
debt upon the winding up under certain provisions of the Corporations Act 2001 (Cth) of any of the controlled entities that
are party to the Deed. If the winding up occurs under other provisions of the Corporations Act 2001 (Cth), Qantas will only be
liable if, six months after a resolution or order for the winding up of the controlled entity, any debt of a creditor of that
controlled entity has not been paid in full. Each controlled entity that is party to the Deed has given similar guarantees in the
event that Qantas is wound up.
Qantas and its eligible controlled entities first entered into a Deed on 4 June 2001. Subsequently, additional controlled
entities became party to the Deed by way of Assumption Deeds dated 17 June 2002, 26 June 2006, 29 June 2007, 30 June
2008, 29 June 2009, 16 June 2010, 25 November 2010, 4 April 2011, 13 October 2011, 20 November 2012, 26 November 2015,
26 June 2017, 2 November 2017, 31 July 2020, 14 March 2023, 12 January 2024, 18 April 2024 and 28 June 2024.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
103
30
DEED OF CROSS GUARANTEE (CONTINUED)
The Consolidated Condensed Income Statement and Consolidated Condensed Balance Sheet for Qantas and each of its
controlled entities that are party to the Deed are set out below. The principles of consolidation are:
– Transactions (including dividends), balances and unrealised gains and losses on transactions between entities that are
party to the Deed are eliminated
– Investments in controlled entities that are not party to the Deed are carried at cost less any accumulated impairment
– Dividends received from controlled entities that are not party to the Deed are recognised as income.
(A)
CONSOLIDATED CONDENSED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$M
$M
Revenue and other income
21,303
19,348
Expenditure
(18,922)
(16,614)
Impairment of assets and related costs
(109)
(6)
Statutory profit before income tax expense and net finance costs
2,272
2,728
Finance income
107
130
Finance costs
(304)
(342)
Net finance costs
(197)
(212)
Statutory profit before income tax expense
2,075
2,516
Income tax expense
(632)
(729)
Statutory profit for the year
1,443
1,787
Accumulated losses as at 1 July
(2,297)
(4,087)
Assumption of subsidiary into the Deed and transfer of put option reserve
(201)
–
Shares vested and transferred to employees/Rights unvested and lapsed
(65)
3
Accumulated losses as at 30 June
(1,120)
(2,297)
(B)
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$M
$M
Statutory profit for the year
1,443
1,787
Effective portion of changes in fair value of cash flow hedges, net of tax
84
(79)
Transfer of effective hedging gains from hedge reserve to the Consolidated Condensed
Income Statement, net of tax
(76)
(232)
Net changes in hedge reserve for time value of options, net of tax
60
(111)
Defined benefit actuarial losses, net of tax
(61)
(103)
Foreign currency translation of investments accounted for under the equity method
1
1
Fair value gains/(losses) on investments, net of tax
3
(11)
Total other comprehensive income/(loss) for the year
11
(535)
Total comprehensive income for the year
1,454
1,252
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
104
30
DEED OF CROSS GUARANTEE (CONTINUED)
(C)
CONSOLIDATED CONDENSED BALANCE SHEET AS AT 30 JUNE 2024
2024
2023
$M
$M
CURRENT ASSETS
Cash and cash equivalents
1,634
3,090
Receivables
1,376
1,688
Other financial assets
260
144
Inventories
343
290
Assets classified as held for sale
45
38
Income tax receivables
21
–
Other
451
243
Total current assets
4,130
5,493
NON-CURRENT ASSETS
Receivables
70
87
Other financial assets
192
151
Investments in subsidiaries
7
117
Investments accounted for under the equity method
35
22
Property, plant and equipment
13,536
11,828
Right of use assets
1,285
1,294
Intangible assets
648
527
Deferred tax assets
–
373
Other
784
810
Total non-current assets
16,557
15,209
Total assets
20,687
20,702
CURRENT LIABILITIES
Payables
3,017
3,406
Revenue received in advance
6,670
6,448
Interest-bearing liabilities
228
812
Lease liabilities
389
578
Other financial liabilities
41
51
Provisions
1,383
1,192
Total current liabilities
11,728
12,487
NON-CURRENT LIABILITIES
Revenue received in advance
1,879
1,996
Interest-bearing liabilities
4,837
4,400
Lease liabilities
1,162
976
Other financial liabilities
33
311
Provisions
406
552
Deferred tax liabilities
198
–
Total non-current liabilities
8,515
8,235
Total liabilities
20,243
20,722
Net assets
444
(20)
EQUITY
Issued capital
1,317
2,186
Treasury shares
(62)
(106)
Reserves
309
197
Accumulated losses
(1,120)
(2,297)
Total equity
444
(20)
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
105
31
RELATED PARTIES
(A)
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The aggregate remuneration of the KMP of the Qantas Group is set out below:
2024
2023
$'000
$'000
Short-term employee benefits
12,438
12,798
Post-employment benefits1
894
681
Termination benefits
479
–
Other long-term benefits2
(84)
59
Share-based payments
4,968
15,453
18,695
28,991
1 Post-employment benefits include superannuation and post-employment travel benefits.
2 Other long-term benefits include movements in annual leave and long service leave balances. The accounting value of other long-term benefits may be
negative, for example, where an Executive’s annual leave balance decreases as a result of taking more annual leave than they accrue during the current year.
Further details in relation to the remuneration of KMP are included in the Remuneration Report.
(B)
NON-EXECUTIVE DIRECTOR FEE SACRIFICE SHARE ACQUISITION PLAN
Under the Non-Executive Director Fee Sacrifice Share Acquisition Plan, Non-Executive Directors can elect to sacrifice
a percentage of their Board or Board and Committee fees in return for a grant of Rights to the equivalent value of the same
number of Qantas ordinary shares.
Each Right granted will convert automatically to one fully-paid Qantas ordinary share at the conversion date, which is six
months from the grant date subject to the individual remaining as a Non-Executive Director on the conversion date. The plan
is designed to provide Non-Executive Directors the opportunity to build their shareholding in a tax effective manner and to
further align their interests with the interests of shareholders.
Non-Executive Director Fee Sacrifice Share Acquisition Plan — Rights Reconciliation
2024
2023
Number of
Rights
Number of
Rights
Rights outstanding as at 1 July
23,659
32,505
Rights acquired during the year by fee sacrifice
25,051
52,271
Rights converted to ordinary shares during the year
(48,710)
(61,117)
Rights outstanding as at 30 June
–
23,659
(C)
OTHER RELATED PARTY TRANSACTIONS
No KMP or their related parties held any loans from the Qantas Group during or at the end of the year ended 30 June 2024 or
prior year. A number of KMPs and their related parties have transactions with the Qantas Group. All transactions are
conducted on normal commercial arm’s length terms.
Transactions with associates are conducted on normal terms and conditions. Transactions between the Qantas Group and
associates include:
– The Qantas Group has established a business service agreement with a Jetstar-branded airline in Japan (Jetstar Japan).
As part of the business service agreement, amongst other services, Qantas allows Jetstar Japan’s credit card transactions
to be acquired through the Qantas Group’s contractual arrangements
– The Qantas Group co-guarantees the lease obligations, on a limited liability basis, in respect of two A320 aircraft on behalf
of the Jetstar-branded airline in Japan (Jetstar Japan) to the external lessors in exchange for guarantee fees to the Qantas
Group.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
106
32
PARENT ENTITY DISCLOSURES – QANTAS AIRWAYS LIMITED
(A)
CONDENSED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$M
$M
Revenue and other income1
13,395
13,300
Expenditure
(11,733)
(10,279)
Impairment of assets and related costs2
(118)
(20)
Statutory profit before income tax expense and net finance costs
1,544
3,001
Net finance costs
(162)
(178)
Statutory profit before income tax expense
1,382
2,823
Income tax expense
(310)
(446)
Statutory profit for the year
1,072
2,377
1 Revenue and other income included $440 million of dividend income from wholly-owned subsidiaries of the Qantas Group (2023: $1,300 million).
2 Impairment of assets and related costs includes the impairment of investments in subsidiaries and intercompany loans of $119 million (2023: $7 million).
(B)
CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$M
$M
Statutory profit for the year
1,072
2,377
Effective portion of changes in fair value of cash flow hedges, net of tax
84
(79)
Transfer of effective hedging gains from hedge reserve to the Condensed Income Statement,
net of tax
(76)
(232)
Net changes in hedge reserve for time value of options, net of tax
60
(111)
Defined benefit actuarial losses, net of tax
(61)
(103)
Foreign currency translation of investments accounted for under the equity method
1
1
Fair value gains/(losses) on investments, net of tax
3
(11)
Total other comprehensive income/(loss) for the year
11
(535)
Total comprehensive income for the year
1,083
1,842
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
107
32
PARENT ENTITY DISCLOSURES – QANTAS AIRWAYS LIMITED (CONTINUED)
(C)
CONDENSED BALANCE SHEET AS AT 30 JUNE 2024
2024
2023
$M
$M
CURRENT ASSETS
Cash and cash equivalents
1,414
2,961
Receivables
779
730
Intercompany receivables
7,142
6,870
Other financial assets
212
144
Inventories
198
183
Assets classified as held for sale
17
38
Income tax receivables
21
–
Other
281
217
Total current assets
10,064
11,143
NON-CURRENT ASSETS
Receivables
45
47
Intercompany receivables
11
30
Investments in subsidiaries
636
420
Other financial assets
187
151
Investments accounted for under the equity method
35
22
Property, plant and equipment
12,003
10,440
Right of use assets
1,213
1,217
Intangible assets
288
331
Deferred tax assets
–
262
Other
784
807
Total non-current assets
15,202
13,727
Total assets
25,266
24,870
CURRENT LIABILITIES
Payables
1,968
1,842
Intercompany payables
7,303
7,070
Revenue received in advance
5,200
5,322
Interest-bearing liabilities
175
680
Intercompany interest-bearing liabilities
49
129
Lease liabilities
342
533
Other financial liabilities
41
51
Provisions
1,089
888
Total current liabilities
16,167
16,515
NON-CURRENT LIABILITIES
Revenue received in advance
1,836
1,980
Interest-bearing liabilities
4,758
4,270
Intercompany interest-bearing liabilities
49
98
Lease liabilities
1,123
917
Other financial liabilities
33
31
Provisions
199
254
Deferred tax liabilities
271
–
Total non-current liabilities
8,269
7,550
Total liabilities
24,436
24,065
Net assets
830
805
EQUITY
Issued capital
1,317
2,186
Treasury shares
(62)
(106)
Other reserves
32(D)
309
476
Profit reserves
32(E)
3,449
2,377
Accumulated losses
(4,183)
(4,128)
Total equity
830
805
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
108
32
PARENT ENTITY DISCLOSURES – QANTAS AIRWAYS LIMITED (CONTINUED)
(D)
OTHER RESERVES
2024
2023
$M
$M
Employee compensation reserve
90
259
Hedging reserves
9
(50)
Defined benefit reserve
217
278
Foreign currency translation of investments accounted for under the equity method
—
(1)
Fair value reserve
(7)
(10)
Total other reserves
309
476
(E)
DIVIDENDS AND OTHER SHAREHOLDER DISTRIBUTIONS
During the year ended 30 June 2024, Qantas Airways Limited did not declare or pay any dividends.
During the year, Qantas Airways Limited reported a Statutory Profit After Tax of $1,072 million, which was set aside in a
separate profit reserve.
During the year ended 30 June 2024, Qantas Airways Limited completed on-market share buy-backs totalling $869 million
of the $500 million share buy-back that was announced in August 2023 and an additional $400 million announced in
February 2024. The Group purchased 156 million ordinary shares on issue at the average price of $5.57.
The remaining $31 million of the total $900 million buy-back has been completed in the first half of financial year 2024/25. In
August 2024, the Directors announced a further on-market share buy-back of up to $400 million.
(F)
CAPITAL EXPENDITURE COMMITMENTS
The capital expenditure commitments held by the parent entity are the same as those held by the Group as disclosed in
Note 15(C).
(G)
CONTINGENT LIABILITIES
The contingent liabilities held by the parent entity are primarily the same as those held by the Group as disclosed in Note 33.
(H)
PARENT ENTITY'S RELATIONSHIPS WITH SUBSIDIARIES AND ASSOCIATES
During the reporting period and previous reporting periods, Qantas Airways Limited was the primary purchaser and owner
of aircraft, the primary source of issuance of external debt and equity, advanced loans to, received and repaid loans from,
and provided treasury, accounting, legal, taxation and administrative services to other controlled entities within the Group.
Entities within the Group also exchanged goods and services in sale and purchase transactions.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect
of its subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the Deed are disclosed in
Note 30. The parent entity is also the head entity of the tax consolidated group (wholly-owned Australian resident entities)
and has assumed the current tax liabilities of the members of the tax consolidated group.
The parent entity’s related party transactions with associates and jointly controlled entities, including in respect to the
provision of guarantees, are primarily the same as those held by the Group, which are disclosed in Note 31(C) and Note
33(C).
(I)
INTEREST-BEARING LIABILITIES
The parent entity has total interest-bearing liabilities of $5,031 million (2023: $5,177 million), of which $98 million (2023: $139
million) represents secured loans payable to controlled entities. Of the $4,933 million (2023: $5,038 million) payable to other
parties, $2,864 million (2023: $2,721 million) represents secured bank loans and other secured loans, with the remaining
balance representing unsecured loans.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
109
33
CONTINGENT LIABILITIES AND LEGAL PROVISIONS
Where a legal claim has been made against the Group, it is necessary to determine whether each claim either meets the
recognition requirement of a provision, represents a contingent liability requiring disclosure or does not require recognition
or disclosure in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets (AASB 137). Contingent
liabilities are disclosed in the Consolidated Financial Statements unless the outflow is considered ‘remote’.
AASB 137 distinguishes between:
a.
provisions – which are recognised as liabilities (unless a reliable estimate cannot be made) because they are
present obligations and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligations; and
b.
contingent liabilities – which are not recognised as liabilities because they are either:
i.
possible obligations, as it has yet to be confirmed whether the entity has a present obligation that could
lead to an outflow of resources embodying economic benefits; or
ii.
present obligations that do not meet the recognition criteria (because either it is not probable that an
outflow of resources will be required to settle the obligation, or a sufficiently reliable estimate of the amount
of the obligation cannot be made).
Contingent liabilities may develop over time and in a way different from initial expectations and are therefore assessed
continuously to determine whether any outflow of economic benefits has become probable or a sufficiently reliable estimate
of the amount of the obligation can now be made. If it becomes probable that an outflow of economic benefits will be
required or a sufficiently reliable estimate can be made for an item previously determined to be a contingent liability, a
provision is recognised in the Consolidated Financial Statements in the period in which the change occurs.
Under AASB 137, disclosure of certain information is not required where it may significantly prejudice the subject matter of a
provision or a contingent liability.
(A)
CONTINGENT LIABILITIES
From time to time, Qantas is subject to claims and litigation during the normal course of business. The Directors have given
consideration to such matters, which are or may be subject to litigation at 30 June 2024, and subject to specific provisions
raised, are of the opinion that no material contingent liabilities exists other than the matters listed below.
The following legal proceedings were filed during the period. In line with AASB 137, other than described below, further
information is not disclosed on the grounds that it may significantly prejudice the outcome of the proceedings. For legal
proceedings that were lodged after the balance sheet date, refer to Note 34.
i.
Class Action Proceedings
In August 2023, a class action proceeding was filed in the Federal Court of Australia. The claim relates to flights scheduled
to depart between 1 January 2020 and 1 November 2022, and includes allegations that Qantas breached its contractual
obligations to customers with regard to refunds for cancelled flights, misled customers as to their rights following flight
cancellations and that Qantas was unjustly enriched by holding customer funds.
On 26 October 2023, a further class action proceeding was filed with significant overlap with the original claim.
On 29 January 2024, Justice Murphy made orders that the first proceeding would progress (to be jointly run by the legal
representatives of both claims), with a stay of the second proceedings. A further amended statement of claim was filed by
the applicant on 14 February 2024. On 27 February 2024, Qantas filed its further amended defence, denying the additional
allegations. The parties have been ordered to mediate, which is expected to occur in the first half of the 2024/25 financial
year.
(B)
LEGAL PROVISIONS
The following legal proceedings are continuing. In line with AASB 137, other than described below, further information is not
disclosed on the grounds that it may significantly prejudice the outcome of the proceedings.
i.
Australian Competition and Consumer Commission Proceedings
On 31 August 2023, the Australian Competition and Consumer Commission (ACCC) commenced proceedings in the Federal
Court of Australia alleging breaches of the Australian Consumer Law in respect of flights scheduled to depart between May
and July 2022.
On 6 May 2024, Qantas announced an agreement with the ACCC to resolve the Federal Court proceedings. As part of the
settlement, Qantas has commenced a $20 million remediation program for impacted passengers. Subject to the approval of
the Federal Court of Australia, Qantas will also pay a $100 million civil penalty. A total provision of $128 million (including
legal and other costs of managing the remediation program) was recognised in the Consolidated Income Statement for the
year ended 30 June 2024.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
110
33
CONTINGENT LIABILITIES AND LEGAL PROVISIONS (CONTINUED)
(B)
LEGAL PROVISIONS (CONTINUED)
ii.
Ground Handling Outsourcing
In September 2023, the High Court dismissed an appeal by Qantas against a decision of the Full Federal Court of Australia in
May 2022 that determined that Qantas had contravened the adverse action provisions of the Fair Work Act in outsourcing
the remainder of Qantas’ ground handling function in 2020.
A compensation hearing for three ‘test case' employees was held before Justice Lee of the Federal Court in March 2024, with
closing submissions in late May 2024. The decision from this hearing will set out the formula by which individual
compensation for affected employees will be calculated. The matter will then be assigned to a number of referees
nominated across the affected ports to calculate the appropriate compensation for each employee applying the reasoning
outlined and determined by Justice Lee based on the three test case employees. The decision in relation to the
compensation hearing has not yet been handed down.
A hearing on pecuniary penalties has not yet been held and will be listed at a later date.
A provision is held within the Consolidated Balance Sheet at 30 June 2024 for the best estimate of these remedies with an
increase in the provision of $70 million recognised since the half-year ended 31 December 2023. Given the Federal Court has
significant discretion to consider and attach weight to the matters that affect any award of compensation and/or any
imposition of penalties, both the quantum and timing of economic outflows is uncertain and the final outcome may vary
materially from the amount provided.
(C)
GUARANTEES
The Qantas Group co-guarantees the lease obligations, on a limited liability basis, in respect of two A320 aircraft on behalf
of the Jetstar-branded airline in Japan (Jetstar Japan) to the external lessors in exchange for guarantee fees to the Qantas
Group.
As part of the business service agreements, the Qantas Group has extended support to Jetstar Japan by allowing its credit
card transactions to be acquired through the Qantas Group’s contractual arrangements.
Qantas has also entered into guarantees to secure a Workers’ Compensation self-insurance licence under the Safety,
Rehabilitation and Compensation Act 1988 (Cth), the New South Wales Workers’ Compensation Act, the Victorian Accident
Compensation Act and the Queensland Workers’ Compensation and Rehabilitation Act. Due to specific self-insurance
provisions raised, the Directors are of the opinion that the probability of having to make a payment under these guarantees
is remote. Qantas has also entered into guarantees in the normal course of business to support non-aircraft lease
commitments, and other arrangements entered into with third parties.
34
POST-BALANCE SHEET DATE EVENTS
On 21 August 2024, a class action proceeding was filed in the Federal Court of Australia against Jetstar Airways Pty Limited.
The claim relates to flights scheduled to depart between 1 January 2020 and 1 November 2022 that were cancelled by
Jetstar, and includes allegations that Jetstar breached its contractual obligations to customers with regard to refunds for
cancelled flights, misled customers as to their rights following flight cancellations and that Jetstar was unjustly enriched by
holding customer funds. The next step is for the matter to be listed for a first case management hearing. The Group intends
to file a defence challenging these allegations.
As at the date of this Report, the class action proceeding is a contingent liability that is subject to the uncertain outcome of
the legal proceedings which may, or may not, result in an obligation. The potential financial impact of any possible
obligation, if any, is unable to be reliably measured.
Other than as disclosed above and as noted in Note 10 – Dividends and Other Shareholder Distributions, there has not
arisen, in the interval between 30 June 2024 and the date of this Report, any other event that would have a material impact
on the Consolidated Financial Statements as at 30 June 2024.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
111
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES
(A)
PRINCIPLES OF CONSOLIDATION
i.
Controlled Entities
Controlled entities are entities controlled by the Group. Control exists when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. The financial statements of controlled entities are included in the Consolidated Financial Statements from the date on
which control commences until the date on which control ceases.
The Group has controlled entities (subsidiaries) that are assessed as material to the Group. Materiality has been assessed
based on the expected long-term contribution of statutory profit to the Group. The parent has majority voting rights in
respect of each of the material subsidiaries. The material subsidiaries are wholly-owned Australian entities and are listed as
parties to the Deed of Cross Guarantee in Note 30.
ii.
Non-Controlling Interests
Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the
date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as
transactions with equity owners of the Group. Non-controlling interests are shown separately in the Consolidated Income
Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and
Consolidated Balance Sheet.
iii.
Investments Accounted for Under the Equity Method
Jointly controlled entities are those entities in which the Group has contractually agreed sharing of control, but not control,
over an entity. Joint control exists when decisions about the relevant activities of the entity require unanimous consent of the
Group and the party or parties sharing control. Interests in jointly controlled entities are accounted for under the equity
accounting method when the Group has rights to the net assets of the the jointly controlled entity (joint venture), rather than
rights to its assets and obligations for its liabilities (joint operation).
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial
and operating policies of an entity. Significant influence is evidenced through, but not limited to, the voting power of the
Group, representation on the Board of Directors and participation in policy-making processes. Interests in associates are
accounted for under the equity accounting method.
Investments accounted for under the equity accounting method are initially recognised at cost. Subsequent to initial
recognition, the Consolidated Financial Statements include the Group’s share of profit or loss and other comprehensive
income of equity accounted investees, until the date on which significant influence or joint control ceases. Dividends
received or receivable reduce the carrying amount of the equity accounted investment. When the Group’s share of total
comprehensive losses exceeds the equity accounted carrying value of an associate, the Group’s carrying amount is reduced
to nil and recognition of further losses is discontinued, except to the extent that the Group has incurred legal or constructive
obligations to fund an associate’s operations or has made payments on behalf of an associate or jointly controlled entity,
which are recognised within provisions.
When an associate or jointly controlled entity is disposed of in its entirety or partially such that significant influence or joint
control is lost or classified as an asset held for sale, the cumulative amount in the foreign currency translation reserve
related to that associate or jointly controlled entity is reclassified to the Consolidated Income Statement as part of the gain
or loss on disposal. When the Group disposes of only part of an associate while retaining significant influence, or only part of
a jointly controlled entity while retaining joint control, the relevant proportion of the cumulative amount in the foreign
currency translation reserve related to that associate or jointly controlled entity is reclassified to the Consolidated Income
Statement.
The carrying amount of equity accounted investments is tested for impairment in accordance with the policy described in
Note 35(G).
iv.
Transactions Eliminated on Consolidation
Intra-group transactions, balances and unrealised gains and losses on transactions between controlled entities are
eliminated in the Consolidated Financial Statements. Unrealised gains and losses arising from transactions with investments
accounted for under the equity method are eliminated to the extent of the Group’s interest in the associate.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
112
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(A)
PRINCIPLES OF CONSOLIDATION (CONTINUED)
v.
Business Combinations
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets
meets the definition of a business combination and control is transferred to the Group. In determining whether a particular
set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a
minimum, an input and substantive process and whether the acquired set of assets and activities has the ability to produce
outputs.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets
acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognised in profit or
loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The
consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in the profit or loss.
(B)
FOREIGN CURRENCY
i.
Foreign Currency Transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Group’s companies at
average exchange rates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at reporting date exchange rates are
generally recognised in the Consolidated Income Statement.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange
rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are
translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that
are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the
transactions.
ii.
Foreign Operations
The assets and liabilities and the income and expenditure of foreign operations that have a functional currency other than
AUD are translated into AUD as follows:
– Assets and liabilities for each balance sheet presented are translated at the exchange rate at the reporting date
– Income and expenses for each income statement and statement of comprehensive income are translated at average
exchange rates
– All resulting exchange differences are recognised in other comprehensive income and accumulated in the foreign
currency translation reserve, except to the extent that the translation difference is allocated to non-controlling interests.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is
lost or classified as an asset held for sale, the cumulative amount in the foreign currency translation reserve related to that
foreign operation is reclassified to the Consolidated Income Statement as part of the gain or loss on disposal. If the Group
disposes of part of its interests in a subsidiary but retains control, then the relevant proportion of the cumulative amount is
reattributed to non-controlling interests. When the Group disposes of only part of an associate or jointly controlled entity
while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to the
Consolidated Income Statement.
iii.
Exchange Rates
References to exchange rates are based on International Air Transport Association (IATA) Five Day Rates.
(C)
FINANCIAL INSTRUMENTS
Non-Derivative Financial Instruments
i.
Recognition, Measurement and Derecognition of Non-Derivative Financial Assets
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs related to the acquisition of the financial asset. Transaction costs of financial
assets carried at fair value through profit or loss are expensed.
The Group subsequently classifies its financial assets in the following measurement categories:
– Those to be measured subsequently at fair value (either through the Consolidated Income Statement or the Consolidated
Statement of Comprehensive Income)
– Those to be measured at amortised cost.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, are
settled or the Group transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership are transferred.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
113
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(C)
FINANCIAL INSTRUMENTS (CONTINUED)
Non-Derivative Financial Instruments (continued)
ii.
Recognition, Measurement and Derecognition of Non-Derivative Financial Liabilities
At initial recognition, the Group measures a non-derivative financial liability at its fair value, less transaction costs.
The Group subsequently measures non-derivative financial liabilities at amortised cost, with any difference between cost
and redemption value being recognised in the Consolidated Income Statement over the period of the non-derivative
financial liability using the effective interest rate method.
The Group derecognises a non-derivative financial liability when its contractual obligations are discharged, cancelled or
expired. The Group also derecognises a non-derivative financial liability when its terms are modified and the cash flows of
the modified liability are substantially different, in which case a new financial liability based on the modified terms is
recognised at fair value.
On derecognition of a non-derivative financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in the Consolidated
Income Statement.
At initial recognition, the Group measures a non-controlling interest put option financial liability at the present value of the
estimated redemption amount, through equity via the put option reserve. The subsequent remeasurement includes all
changes in the carrying amount of the liability, including the accretion of interest and is recognised in the put option reserve.
On derecognition of the put option financial liability (when the put option is exercised and/or the remaining interest is
acquired), the cumulative amount in the put option reserve and non-controlling interest is reclassified to Retained Earnings.
Derivative Financial Instruments
Derivative financial instruments are recognised at fair value both initially and on an ongoing basis. The accounting for
subsequent changes in fair value depends on whether the derivative is a designated hedging instrument, and if so, the
nature of the item being hedged and the type of hedge relationship designated. The Group designates derivatives as either
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges), or as hedges of a
particular risk associated with the cash flows of recognised assets and liabilities or of highly probable forecast transactions
(cash flow hedges). At the inception of the transactions, the Group documents the economic relationship between hedging
instruments and hedged items, including the risk management objective and strategy for undertaking each transaction.
The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the hedging
instruments that are used in hedge transactions have been and will continue to be highly effective.
From time to time, certain derivative financial instruments do not qualify for hedge accounting, notwithstanding that the
derivatives are held to hedge identified exposures. Any changes in the fair value of a derivative instrument or part of a
derivative instrument that do not qualify for hedge accounting are classified as ineffective and recognised immediately in
the Consolidated Income Statement.
i.
Fair Value Hedges
Changes in the fair value of derivative financial instruments that are designated and qualify as fair value hedges are
recognised in the Consolidated Income Statement, together with any changes in the fair value of the hedged asset or liability
or firm commitment attributable to the hedged risk.
ii.
Cash Flow Hedges
Where a derivative financial instrument is designated and qualifies as a cash flow hedge, the effective portion of changes in
the fair value of the derivative is recognised in the Consolidated Statement of Comprehensive Income and accumulated
within the hedge reserve. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in
the Consolidated Income Statement.
The amount accumulated in equity is retained in the hedge reserve and reclassified to the Consolidated Income Statement
in the same period or periods during which the hedged forecast cash flows affect profit or loss or the hedged item affects
profit or loss. Where the hedged item is capital in nature, the cumulative gain or loss recognised in the hedge reserve is
transferred to the carrying amount of the asset when the asset is recognised.
If the forecast transaction is no longer highly probable, the hedging instrument expires, is sold, terminated or exercised, or
the designation is revoked, then hedge accounting is de-designated prospectively. If the forecast transaction is no longer
highly probable, but still probable, hedge accounting is discontinued and the amounts accumulated in the hedge reserve are
recognised in the Consolidated Income Statement in the period in which the original hedged item transaction ultimately
occurs. If the forecast transaction is no longer probable (or subsequently considered no longer probable), hedge accounting
is de-designated and the amounts accumulated in the hedge reserve are reclassified to the Consolidated Income Statement
immediately.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
114
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(C)
FINANCIAL INSTRUMENTS (CONTINUED)
Derivative Financial Instruments (continued)
iii.
Cost of Hedging
The time value of an option, the forward element of a forward contract and any foreign currency basis spread is excluded
from the designation of a financial instrument and accounted for as a cost of hedging. The fair value changes of these
elements are recognised in other comprehensive income and accumulated within the hedge reserve, and depending on the
nature of the hedged item, will either be transferred to the Consolidated Income Statement in the same period that the
underlying transaction affects the Consolidated Income Statement or capitalised into the initial carrying value of the asset.
iv.
Measurement of Fair Values
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.
The fair value of financial instruments that are not traded in an active market is estimated using valuation techniques
consistent with accepted market practice. The Group uses a variety of valuation techniques and input assumptions that are
based on market conditions existing at the balance sheet date. Fair Values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the
fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.
v.
Financial Guarantee Contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially
measured at fair value and subsequently at the higher of:
– The amount determined in accordance with the expected credit loss model under AASB 9 Financial Instruments, and
– The amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with
the principles of AASB 15 Revenue from Contracts with Customers.
The fair value of financial guarantees is determined based on the present value of the difference in cash flows between the
contractual payments required under the debt instrument and the payments that would be required without the guarantee,
or the estimated amount that would be payable to a third party for assuming the obligations. Where guarantees in relation to
loans or other payables of associates are provided for no compensation, the fair values are accounted for as contributions
and recognised as part of the cost of the investment.
(D)
REVENUE RECOGNITION
i.
Net Passenger and Net Freight Revenue
Net passenger revenue primarily arises within the Qantas Domestic, Qantas International and Jetstar Group segments.
Net freight revenue primarily arises within the Qantas International segment except where belly space is utilised in Qantas
Domestic and the Jetstar Group.
Passenger, freight, capacity hire and air charter revenue are recognised when the travel or service is provided. Revenue
recognised on travel is net of sales discounts, passenger and freight interline/IATA commission and the Goods and Services
Tax. Net freight revenue includes amounts the Group receives as operating lease income in relation to freighters leased to
customers.
At the time of expected travel, revenue is also recognised in respect of tickets that are not expected to be used. Unused
tickets and unredeemed travel credits are recognised as revenue using estimates based on the terms and conditions of the
ticket, experience, historical and expected future trends.
Passenger travel and freight services are generally paid for in advance of travel and are deferred on the balance sheet as
revenue received in advance. Travel credits are classified as revenue received in advance where they are available for future
flights or in certain circumstances for refund, if requested. Where customers have made refund claims these are classified
as payables.
Where the passenger is also a Qantas Frequent Flyer member and earns Qantas Points on travel, the allocation of revenue is
on a proportional basis using relative stand-alone selling prices. The consideration allocated to Qantas Points is deferred as
unrecognised redemption revenue.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
115
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(D)
REVENUE RECOGNITION (CONTINUED)
i.
Net Passenger and Net Freight Revenue (continued)
Consideration received in relation to certain ancillary services regarding passenger travel such as credit card fees and
change fees are not considered to be distinct from the passenger flight. Revenue relating to these ancillary services is
deferred until uplift to align with the related passenger travel. These amounts are included within net passenger revenue.
Passenger recoveries are included in net passenger revenue. Freight fuel surcharge is included in net freight revenue.
ii.
Frequent Flyer Marketing Revenue and Other Qantas Loyalty Businesses
Marketing revenue associated with the issuance of Qantas Points is recognised within the Qantas Loyalty segment as the
service is performed over time (typically, this approximates to the timing of the issuance of Qantas Points). Marketing
revenue is measured as the difference between the stand-alone selling price of a Qantas Point and the consideration
received, using the residual approach. The stand-alone selling price of a Qantas Point is determined using estimation
techniques based on the value of redemption options for which Qantas Points could be redeemed and considers the
proportion of Qantas Points not expected to be redeemed. The consideration for Qantas Points is typically received within
normal credit terms following the issuance of points.
Marketing revenue on inter-segment Qantas Point issuances is eliminated on consolidation.
Revenue from other Qantas Loyalty businesses includes both commission revenue where Qantas Loyalty is acting as agent
and holiday package revenue from the provision of travel services where Qantas Loyalty is acting as a principal. Commission
and holiday package revenue is measured based on its relative stand-alone selling price and recognised on satisfaction of
the performance obligation (typically, the transfer of the underlying good or service to the customer). Revenue is recognised
on a net basis for commission revenue and a gross basis for holiday package revenue. Deposits received from customers to
secure bookings are paid in advance and are deferred on the balance sheet as revenue received in advance.
For the purposes of segment reporting, the Qantas Loyalty segment reports transactions in which it acts as an agent on a
gross basis. Adjustments are made within consolidation eliminations to present these on a net basis at a Group level within
Frequent Flyer marketing revenue and other Qantas Loyalty businesses.
iii.
Frequent Flyer Redemption Revenue
The consideration for issuance of Qantas Points is typically received in advance of redemption and is recognised as deferred
redemption revenue at its relative stand-alone selling price. Redemption revenue is measured based on the weighted
average value of the points redeemed. Redemption revenue is recognised within the Qantas Loyalty segment when Qantas
Points are redeemed.
Redemption revenue in relation to products provided by suppliers outside the Group, such as Qantas Marketplace
redemptions and other carrier redemptions, is recognised in the Consolidated Income Statement net of related costs where
the Group acts as an agent. Obligations for returns or refunds in relation to redemptions from Qantas Marketplace are
recognised where material. For the purposes of segment reporting, the Qantas Loyalty segment reports these redemptions
on a gross basis. Adjustments are made within consolidation eliminations to present these redemptions on a net basis at a
Group level within Qantas Marketplace and other redemption revenue.
For the purposes of segment reporting, the Qantas Loyalty segment reports Qantas Group flight redemptions when Qantas
Points are redeemed. Adjustments are made within the consolidation eliminations to present these redemptions on uplift
and present within net passenger revenue.
Significant changes in the estimate of issued Qantas Points expected to expire unredeemed are recognised within other
revenue and income. The Group uses estimates based on terms and conditions of the Frequent Flyer program, experience,
and historical and expected future trends to determine any amount recognised.
iv.
Other Carrier Commissions and Commissions from Third Parties (Within Third-party services revenue)
The Group considers whether it is a principal or agent in relation to services by considering whether it has a performance
obligation to provide services to the customer or whether the obligation is to arrange for services to be provided by another
party, such as another carrier or a third party. Other carrier commission revenue is generally recognised on uplift by the
other carrier, and consideration is received within normal credit terms through IATA. Commissions from third parties are
generally recognised when the underlying good or service has been transferred to the end customer.
v.
Freight Terminal Fees (Within Third-party services revenue)
Revenue from freight terminal fees is measured based on its stand-alone selling price and recognised on satisfaction of the
performance obligation, which is typically the transfer of the underlying service to the customer. Consideration is received
according to contractual terms.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
116
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(D)
REVENUE RECOGNITION (CONTINUED)
vi.
Qantas Club Membership
Qantas Club Membership revenue is measured based on its stand-alone selling price and is recognised within other revenue
and income on satisfaction of the performance obligation, which is typically recognised on a straight-line basis over the
membership period. Consideration is received in advance and deferred on the balance sheet as other revenue received in
advance.
vii.
Incremental Costs of Obtaining a Contract
The incremental cost of obtaining a contract is capitalised and amortised over the expected period of benefit to the Group
and in line with the pattern of those benefits. The Group recognises the incremental costs of obtaining a contract as an
expense when incurred where the amortisation period of the asset that would have been recognised is one year or less.
(E)
GOVERNMENT GRANTS
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group expects to comply with the conditions. Depending on the grant conditions, grants received may be
deferred and recognised over time on a straight-line basis. Grants received to support capital expenditure are deferred and
recognised in the Consolidated Income Statement over the useful life of the related asset. Grants that compensate the
Group for expenses incurred are recognised in the Consolidated Income Statement in the periods in which the expenses are
recognised.
(F)
TAXES
i.
Tax Compliance
The Group is committed to embedding risk management practices to support the achievement of compliance objectives
and fulfil corporate governance obligations. Tax risk management is governed by both the Qantas Group Risk Management
Policy and the Qantas Group Tax Risk Management Policy, ensuring corporate governance obligations with respect to tax
risks are met. The Group has paid all taxes that it owes and all tax compliance obligations are up to date. The Australian
Taxation Office (ATO) also acknowledged Qantas’ continued commitment to engage cooperatively and transparently to
mitigate tax risks, including obtaining tax certainty on key transactions through the use of binding Private Rulings and
entering into a multi-tax Annual Compliance Arrangement (ACA).
Tax treaties
Due to the operation of income tax treaties and specific rules dealing with airlines, the Group appropriately reports the
majority of its income in Australia, with only a small component being reported in foreign jurisdictions (for the purpose of
determining liability to company tax).
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Consolidated Income
Statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.
Current income tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year, and any adjustment
to tax payable or receivable with respect to previous years. It is measured using tax rates enacted or substantially enacted at
the balance sheet date where the Group and its subsidiaries operate and generate taxable income or loss.
Current tax assets and liabilities are offset only if the Group has legally enforceable rights to set off the assets and liabilities.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
– Temporary differences arising from the initial recognition of assets or liabilities that affect neither accounting nor taxable
profit or loss
– Temporary differences arising from the initial recognition of assets or liabilities that do not give rise to equal taxable and
deductible temporary differences
– Temporary differences relating to investments in controlled entities, associates and jointly controlled entities to the extent
that the Group is able to control the timing of the reversal of the temporary differences and it is probable they will not
reverse in the foreseeable future
– Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences only to
the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised. Such reductions are reversed when the probability of future taxable profits improves. Deferred tax is
measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates
enacted or substantially enacted at the reporting date. The Group provides for income tax in both Australia and overseas
jurisdictions where a liability exists.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
117
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(F)
TAXES (CONTINUED)
ii.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances, GST is recognised as part of the cost of acquisition of the
asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of
GST recoverable from, or payable to, the taxation authority is included as a current asset or liability in the Consolidated
Balance Sheet. The GST components of cash flows arising from investing and financing activities which are recoverable
from, or payable to, the taxation authority are classified as operating cash flows.
iii.
Tax Consolidation
The Group and its Australian wholly-owned controlled entities, trusts and partnerships are part of a tax consolidated group.
As a consequence, all members of the tax consolidated group are taxed as a single entity.
(G)
IMPAIRMENT
i.
Non-Financial Assets
The carrying amounts of non-financial assets such as equity accounted investments, property, plant and equipment, right of
use assets, goodwill, intangible assets and other assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. For the purpose
of assessing impairment, goodwill and indefinite lived intangible assets are grouped at the lowest levels for which there are
separately identifiable cash flows (Cash Generating Units (CGU)). Other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill arising from a business
combination is allocated to CGUs or group of CGUs that are expected to benefit from the synergies of the combination.
Assets which primarily generate cash flows as a group, such as aircraft, are typically assessed on a CGU basis, inclusive of
related infrastructure and intangible assets and compared to net cash inflows for the CGU. Where assets are no longer
expected to contribute to the cash flows of a CGU, they are tested for impairment separately.
Identification of an asset’s CGUs requires significant judgement, as it requires identification of the lowest aggregation of
assets that generate largely independent cash inflows from other assets or CGUs. Management has identified the lowest
aggregation of assets which give rise to CGUs as defined by AASB 136 Impairment of Assets in Note 24(A)i.
Estimated net cash flows used in determining recoverable amounts are discounted to their net present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the assets or
CGU.
An impairment loss is recognised for the amount by which the asset’s or CGU’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and value in use.
Impairment loss is recognised in the Consolidated Income Statement. If any goodwill is allocated to a CGU, impairment
losses are allocated first to reduce the carrying amount of any goodwill, and then to reduce the carrying amounts of the
other assets in the CGU on a pro-rata basis. Carrying amounts of assets are reduced to the higher of its fair value less costs
of disposal, its fair value in use and zero.
Non-financial assets, other than goodwill, that have been previously impaired are reviewed for possible reversal of the
impairment at the end of each reporting period. The maximum amount of any impairment reversal is the lower of:
– The amount necessary to bring the carrying amount of the asset to its recoverable amount (if it is determinable), and
– The amount necessary to restore the assets of the CGU to their pre-impairment carrying amounts less subsequent
depreciation or amortisation that would have been recognised.
Impairment losses in respect of goodwill are not reversed.
ii.
Non-Derivative Financial Assets
The carrying value of financial assets is assessed at each reporting date to determine whether there is any objective
evidence that it is impaired. Where necessary, the Group recognises provisions for Expected Credit Loss (ECL) at amortised
cost, based on 12-month or lifetime losses depending on whether there has been a significant increase in credit risk,
including risk of default occurring, since initial recognition. Loss allowances are recognised against the carrying amount of
the respective financial assets.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
118
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(G)
IMPAIRMENT (CONTINUED)
ii.
Non-Derivative Financial Assets (continued)
For significant customers, the Group allocates each exposure to a credit risk grade based on data that is determined to be
predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management
accounts, cash flow projections and available press information about customers) and applying experienced credit
judgement. For other customers, ECL is assessed based on credit risk characteristics and the days past due. It is then
measured based on actual historical credit loss experienced over the past years, along with other factors, to reflect
differences between the economic conditions during the period over which the historical data has been collected, current
conditions and the Group's view of macroeconomic conditions over the expected lives of the receivables. The Group
considers a financial asset to be in default when the counterparty is unlikely to pay its credit obligations in full.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical
experience and informed credit assessment, including forward-looking information. A financial asset is written off when
there is no reasonable expectation of recovery, such as the debtor failing to engage in a repayment plan with the Group.
(H)
PROPERTY, PLANT AND EQUIPMENT
i.
Recognition and Measurement
Items of property, plant and equipment are recognised at cost less accumulated depreciation and impairment losses. Items
of property, plant and equipment are initially recorded at cost, being the fair value of the consideration provided plus
incidental costs directly attributable to the acquisition.
Costs to dismantle and remove assets
The cost of property, plant an equipment includes the initial estimate of costs of dismantling and removing the items and
restoring the site on which they are located.
Changes in the measurement of existing liabilities resulting from changes in foreign exchange rates, timing or expected
outflow of resources required to settle the obligation, or from changes in the discount rate are recognised as an adjustment
to the asset. The unwinding of the discount is treated as a finance expense in the Consolidated Income Statement.
Gains or losses on cash flow hedges of the purchase of assets
The cost also may include transfers from the hedge reserve of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of property, plant and equipment in accordance with Note 35(C).
Capitalisation of interest
Interest attributed to progress payments made on account of aircraft and other qualifying assets under construction are
capitalised and added to the cost of the asset. All other borrowing costs are recognised in the Consolidated Income
Statement in the year in which they are incurred.
Gains or losses on disposal
Any gain or loss on disposal of property, plant and equipment is recognised in the Consolidated Income Statement.
ii.
Subsequent Expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the
expenditure will flow to the Group.
iii.
Depreciation
Depreciation is provided on a straight-line basis on all items of property, plant and equipment except for freehold land,
which is not depreciated. The depreciation rates of owned assets are calculated to allocate the cost or valuation of an asset,
less any estimated residual value, over the asset’s estimated useful life to the Group. Assets are depreciated from the date of
acquisition or, with respect to internally constructed assets, from the time an asset is available for use. The costs of
improvements to assets are depreciated over the shorter of the remaining useful life of the asset or the estimated useful life
of the improvement.
The general asset depreciation periods and estimated residual value percentages applied where material are:
Years
Residual Value (%)
Buildings and leasehold improvements
5 – 40
0
Plant and equipment
2 – 20
0
Passenger aircraft and engines
2 – 25
0 – 10
Freighter aircraft and engines
2 – 30
0 – 10
Aircraft spare parts
2 – 20
0 – 10
Useful lives and residual values are reviewed annually and adjusted where appropriate, having regard to commercial and
technological developments, the estimated useful life of assets to the Group and the long-term fleet plan.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
119
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(H)
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
iv.
Maintenance and Overhaul Costs
Embedded maintenance
An element of the cost of an acquired aircraft is attributed to its service potential, reflecting the maintenance condition of its
engines and airframe. This cost is depreciated over the shorter of the period to the next major inspection event, the
remaining life of the asset or the remaining lease term.
Subsequent maintenance expenditure
The costs of subsequent major cyclical maintenance checks for owned and leased aircraft are recognised as an asset and
depreciated over the shorter of the scheduled usage periods to the next major inspection event, the remaining life of the
aircraft or lease term (as appropriate to their estimated residual value). Maintenance checks which are covered by third-
party maintenance agreements where there is a transfer of risk and legal obligation to the third party, are expensed on the
basis of hours flown. All other maintenance costs are expensed as incurred.
Modifications
Modifications that enhance the operating performance or extend the useful lives of aircraft are capitalised and depreciated
over the remaining estimated useful life of the asset or remaining lease term (as appropriate to their estimated residual
value).
v.
Manufacturers’ Credits
The Group receives credits from manufacturers in connection with the acquisition of certain aircraft and engines. These
credits are recorded as a reduction to the cost of the related aircraft and engines, when the credits are utilised by the Group.
(I)
LEASES
The Group leases passenger aircraft and engines, freighter aircraft, domestic and international properties, and equipment.
Lease contracts are typically entered into for fixed periods but may have extension options.
Leases are contracts which convey the right to control the use of an identified asset for a period of time in exchange for
consideration. Control is conveyed where the Group has both the right to direct the use of the identified asset and to obtain
substantially all the economic benefits from the use of the asset throughout the period of use.
i.
Initial Recognition
Leases (other than the exemptions described below) are recognised as a lease liability with a corresponding right of use
asset at the date at which the leased asset is available for use by the Group.
The Group has elected not to recognise right of use assets and lease liabilities for leases of low-value assets and short-term
leases. The Group recognises lease payments associated with these leases as an expense in the Consolidated Income
Statement as incurred.
For material contracts that include lease components and non-lease components, these components are separated based
on their relative stand-alone selling prices. The lease component is recognised as a lease and the non-lease component is
recognised as an expense in the Consolidated Income Statement as incurred. This includes, for example, certain capacity
hire arrangements where a third party provides aircraft (lease component) to the Group, together with other services such
as crew and maintenance (non-lease components), which are recognised within capacity hire expense.
Lease liability
At the lease commencement date, lease liabilities are initially measured at the present value of lease payments over the
lease term.
Lease payments include fixed payments (less any lease incentives receivable), variable payments that are based on an index
or a rate (initially measured using the index or rate as at the commencement date), amounts expected to be payable under a
residual value guarantee and, where relevant, the exercise price of a purchase option (where it is reasonably certain that
option will be exercised).
The lease term includes the non-cancellable period for which the Group has contracted to lease the asset, together with any
option terms to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate
the lease, if it is reasonably certain not to be exercised. When determining the lease term for cancellable leases or renewable
leases, the Group considers both the broader economics of the contract (and not only contractual termination payments)
and whether each of the parties has the right to terminate the lease without permission from the other party with no more
than an insignificant penalty. Such leases include, for example, leases which have expired and are legally cancellable by both
the lessor and lessee and/or leases which contain holdover arrangements which allow the lessee to continue to occupy the
property beyond the lease end date until the arrangement is cancelled by either the lessee or the lessor.
Lease payments are discounted using the Group's incremental borrowing rate where the implicit interest rate in the lease is
not readily determined. The Group's incremental borrowing rate is the rate that the Group would have to pay to borrow the
funds necessary to obtain an asset of similar value or the right to use an asset in an economic environment with similar
terms and conditions.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
120
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(I)
LEASES (CONTINUED)
i.
Initial Recognition (continued)
Right of use asset
At the lease commencement date, right of use assets are initially measured at cost at an amount equal to the initial
measurement of the lease liability (adjusted for any lease payments made at or before the commencement date), and an
initial estimate of the present value of restoration or return costs that arise at lease commencement (with the corresponding
amount recognised as a provision) less any lease incentives received.
ii.
Subsequent Measurement
Lease liability
Lease payments are allocated between principal and interest payments. The interest expense is recognised in the
Consolidated Income Statement over the lease term to produce a constant periodic rate of interest on the remaining balance
of the liability for each period.
Lease liabilities denominated in currencies other than the Group's functional currency are translated to AUD at each
reporting date. However, the right of use asset is recognised at the foreign exchange rate at initial recognition.
In accordance with the Group's Treasury Risk Management Policy, certain foreign currency lease liabilities (for example,
aircraft leases denominated in USD) have been designated as a hedging instrument of future corresponding foreign
currency revenues (for example, US revenues) in a cash flow hedge relationship. The effective portion of the foreign
exchange revaluation of the lease liability is recognised in other comprehensive income and is recycled to the Consolidated
Income Statement within net passenger revenue when the hedged item is realised.
The lease liability is remeasured where there is a change in future lease payments arising from a change in index or rate, if
there is a change in the Group's estimate of amounts expected to be payable under a residual value guarantee, or if there is a
change in the lease term, including the Group’s assessment of whether it will exercise a purchase, extension or termination
option within the lease contract (reassessed where there is a significant event or change in circumstances that is within the
Group's control and affects the ability to exercise, or not to exercise, an option). Where the lease liability is remeasured in
this way, a corresponding adjustment is recognised to the right of use asset or is recorded in the Consolidated Income
Statement if the carrying amount of the right of use asset has been reduced to zero.
Right of use asset
Right of use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis. The right of use asset is adjusted for certain changes in the lease liability, impairment losses (in accordance with Note
35(G)i.) and for changes in the measurement of the restoration provision recognised for return costs that arise at lease
commencement.
iii.
Lease Revenue
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks
and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease. If not, then it
is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the
major part of the economic life of the asset.
Where the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to the right of use asset arising from the head lease, not with
reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described
above, then it classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the Group allocates the consideration in the contract to the
components based on their relative stand-alone selling prices.
The Group applies the derecognition and impairment requirements to finance lease receivables (in accordance with Note
35(G)ii.).
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease
term within net freight revenue and other revenue and income.
iv.
Sale and Leaseback
A sale and leaseback transaction is one where the Group sells an asset in accordance with AASB 15 Revenue from Contracts
with Customers, and simultaneously reacquires the use of the asset by entering into a lease with the buyer.
The Group measures the right of use asset arising from the leaseback at the portion of the previous carrying amount that is
retained by the Group, with any difference between the right of use asset and the lease liability reflected in the gain on sale.
Accordingly, any residual gain from the disposal of assets is representative of the rights transferred to the buyer and is
recognised in the Consolidated Income Statement.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
121
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(J)
INTANGIBLE ASSETS
i.
Recognition and Measurement
Goodwill
Goodwill has an indefinite useful life and is recognised at cost less any accumulated impairment
losses. With respect to investments accounted for under the equity method, the carrying amount of
goodwill is included in the carrying amount of the investment.
Airport landing slots Airport landing slots which are recognised as intangible assets have an indefinite useful life. Airport
landing slots are not amortised and recognised at cost less any accumulated impairment losses.
Brand names and
trademarks
Brand names and trademarks have an indefinite useful life and are recognised at cost less any
accumulated impairment losses.
Software
Software is recognised at cost less accumulated amortisation and impairment losses. Software
development expenditure, including the cost of materials, direct labour and other direct costs, is only
recognised as an asset when the Group controls the future economic benefits as a result of the costs
incurred, it is probable that those future economic benefits will eventuate and the costs can be
measured reliably.
Cloud computing arrangements involve service contracts providing the Group with the right to
access the cloud provider’s application software over the contract period. Fees for use of the
underlying software are recognised as an expense as the service is provided over the contract
period. Where the Group does not receive a software intangible asset at the contract commencement
date, costs incurred for the customisation and configuration are generally recognised as an expense
when the work is performed.
Customer
contracts/
relationships
Customer contracts/relationships are recognised at their fair value at the date of acquisition less
accumulated amortisation and impairment losses. Amortisation commences when the asset is ready
for use.
Contract intangible
assets
Contract intangible assets are recognised at cost less accumulated amortisation. Amortisation
commences when the asset is ready for use.
The Group considers that there are no individual intangible assets that are material for additional disclosure within the
financial statements.
ii.
Subsequent Expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure on internally-generated goodwill and brands, is recognised in
the Consolidated Income Statement as incurred.
iii.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line
method over their estimated useful lives and is recognised in the Consolidated Income Statement. Goodwill, brand names
and trademarks, and airport landing slots are indefinite lived intangible assets and not amortised but tested annually for
impairment as part of the relevant CGUs the assets are allocated to.
The general amortisation periods and estimated residual value percentages applied where material are:
Years
Residual Value %
Software
2 – 10 years
0%
Customer contracts/relationships
11 years
0%
Contract intangible assets
40 years
0%
(K)
INVENTORIES
Inventories are valued at the lower of cost and net realisable value. The cost is determined by the weighted average cost
method. Inventories mainly include engineering expendables, consumable stores, carbon offsets and work in progress.
(L)
ASSETS HELD FOR SALE
Non-current assets, or disposal groups comprising asset and liabilities, are classified as held for sale if it is highly probable
that they will be recovered primarily through sale rather than through continued use and the asset is available for immediate
sale in its present condition.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
122
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(L)
ASSETS HELD FOR SALE (CONTINUED)
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less cost to sell.
Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a
pro-rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets,
which continue to be measured in accordance with the Group’s other accounting policies. Impairment loss on initial
classification as held for sale and subsequent gains and losses on remeasurement are recognised in the Consolidated
Income Statement.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated
and any equity-accounted investees are no longer equity accounted.
(M)
PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are usually paid within 30-60 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised
initially at their fair value and subsequently measured at amortised cost using the effective interest method, if the effect of
discounting is material.
Payables also include customer refund liabilities.
(N)
REVENUE RECEIVED IN ADVANCE
i.
Unavailed Passenger Revenue
Passenger travel and freight services are generally paid for in advance of travel and are deferred on the balance sheet as
revenue received in advance. Travel credits are classified as revenue received in advance where they are available for future
flights or in certain circumstances for refund, if requested. Where customers have made refund claims these are classified
as payables.
Tickets generally expire either within 12 months after the planned travel date if they are not used within that time period, or
on the date of planned travel, depending on the terms and conditions.
Notwithstanding that travel credits may not be utilised in the next 12 months, unavailed passenger revenue is classified as
current on the basis that the Group does not have an unconditional right to defer usage of the ticket for at least 12 months.
ii.
Unredeemed Frequent Flyer Revenue
Unredeemed Frequent Flyer revenue relates to performance obligations associated with Qantas Points which have been
issued but not redeemed. Qantas Points are issued by the Group as part of the Qantas Frequent Flyer program or are sold to
third parties such as credit card providers, who issue them as part of their loyalty programs. Unredeemed Frequent Flyer
revenue is classified as either current or non-current based on the Group’s expectation of redemption patterns by members
within the next 12 months. The non-current amount of Unredeemed Frequent Flyer revenue will be materially recognised as
revenue over three years. Significant changes in Qantas Points expected to expire unredeemed are recognised within other
revenue and income using estimates based on the terms and conditions of the Frequent Flyer program, experience,
historical and expected future trends.
iii.
Other Revenue Received in Advance
Other revenue received in advance primarily relates to prepaid Qantas Club and Club Jetstar membership fees, revenue
received in advance for travel packages, points redemptions on other airlines, unavailed cargo revenue and grants or
supplier incentives the Group has received but which are recognised over time. Other revenue received in advance is
classified as current where it is expected to be recognised or transferred to another carrier within the next 12 months.
(O)
PROVISIONS
A provision is recognised if, as a result of a past event, there is a present legal or constructive obligation that can be
measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are not recognised for future operating losses.
If the effect is material, a provision is determined by discounting the best estimate of the expected future cash flows
required to settle the obligation at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The unwinding of the discount is recognised as a finance expense in the Consolidated
Income Statement.
Provisions are presented as current liabilities in the balance sheet if the Group does not have an unconditional right to defer
settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
123
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(O)
PROVISIONS (CONTINUED)
Wages, salaries and
annual leave
Liabilities for wages, salaries and annual leave vesting to employees are recognised in respect of
employees’ services up to the end of the reporting period. These liabilities are measured at the
amounts expected to be paid when they are settled and include related on-costs, such as workers’
compensation insurance, superannuation and payroll tax. The annual leave provision is discounted
using corporate bond rates which most closely match the expected settlement dates of the
provision. The unwinding of the discount is treated as a finance expense in the Consolidated Income
Statement. Remeasurements as a result of experience adjustments and changes in assumptions are
recognised in the Consolidated Income Statement.
Long service leave
The liability for long service leave is recognised as a provision for employee benefits and measured
at the present value of estimated future payments to be made in respect of services provided by
employees up to the end of the reporting period. The provision is calculated using expected future
increases in wage and salary rates, including related on-costs and expected settlement dates based
on expected employee usage. The provision is discounted using corporate bond rates which most
closely match the expected settlement dates of the provision. The unwinding of the discount is
treated as a finance expense in the Consolidated Income Statement. Remeasurements as a result of
experience adjustments and changes in assumptions are recognised in the Consolidated Income
Statement.
Redundancies and
other employee
benefits
Redundancy provisions are recognised at the earlier of when the Group can no longer withdraw the
offer of those benefits and when the Group recognises costs for a restructuring. These benefits are
expected to be settled wholly within 12 months of the end of the reporting period.
Other employee benefits such as discretionary bonus amounts to Non-Executive employees are
recognised as a provision where the Group has a legal or constructive obligation to make the
payment to Non-Executive employees and the amount can be reliably measured.
Onerous contracts
An onerous contract is a contract in which the unavoidable cost of meeting the obligations under the
contract exceeds the economic benefit expected to be received.
A provision for onerous contracts is measured at the present value of the lower of the expected cost
of terminating the contract and the expected net cost of continuing with the contract, which is
determined based on the incremental costs of fulfilling the obligation under the contract and an
allocation of other costs directly related to fulfilling the contract. Before a provision is established,
the Group recognises any impairment loss on the assets associated with that contract.
Make good on
leased assets
Aircraft: An initial estimate of the present value of restoration or return costs that arise at lease
commencement are recognised as a provision, with a corresponding amount recognised as part of
the initial recognition of the right of use asset and depreciated over the lease term. Changes in this
provision (other than discount unwind, which is recognised as a finance expense in the Consolidated
Income Statement) are recognised as an adjustment to the right of use asset.
Provisions for the cost of return obligations within the lease that occur over the lease term through
usage or the passage of time are recognised as an expense when they occur. The determination of
these costs requires significant judgement and is estimated in USD based on the forecast costs
expected to be incurred in relation to lease obligations when the aircraft is returned to or purchased
from the lessor, calculated using expected future increases in costs and discounted to present value
using the Group’s incremental borrowing rate. The expense is recognised pro-rata over the period to
an expected lease return date. Movements in the provision due to changes in foreign exchange rates
and discount rates as well as changes in estimates of forecast return costs expected to be incurred
or expected lease return dates are recognised in the Consolidated Income Statement.
Property: An initial estimate of the present value of restoration costs that arise at lease
commencement are recognised as a provision with a corresponding amount recognised as part of
the initial recognition of the right of use asset and depreciated over the lease term. Changes in this
provision (other than discount unwind, which is recognised as a finance expense in the Consolidated
Income Statement) are recognised as an adjustment to the right of use asset.
Environment: Where the usage of property or land gives rise to an obligation for rehabilitation, the
Group recognises a provision for the costs associated with restoration with a corresponding amount
recognised in the Consolidated Income Statement. Changes in this provision are recognised in the
Consolidated Income Statement.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
124
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(O)
PROVISIONS (CONTINUED)
Insurance, legal
and other
Insurance: The Group self-insures for risks associated with workers’ compensation in certain
jurisdictions. Qantas has made a provision for all notified and assessed workers’ compensation
liabilities, together with an estimate of liabilities incurred but not reported, based on an independent
actuarial assessment. The provision is discounted using pre-tax rates that reflect current market
assessments of the time value of money and the risks specific to the liabilities and which have
maturity dates approximating the terms of Qantas’ obligations. Workers’ compensation for all
remaining employees is commercially insured.
Legal and other provisions: Provisions are recognised where they are incurred as a result of a past
event, there is a legal or constructive obligation that can be measured reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
(P)
OTHER EMPLOYEE BENEFITS
i.
Employee Share Plans
The grant date fair value of equity-settled share-based payment awards granted to employees is recognised as an expense,
with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which related service and non-market performance conditions are expected to
be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and
non-market performance conditions at the vesting date. For share-based payment awards with market performance
conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-
up for differences between expected and actual outcomes. Where forfeiture occurs after the vesting date, for example
during a period of holding lock or trading restriction, this is a non-vesting condition and the expense for services received is
not reversed.
ii.
Defined Contribution Superannuation Plans
The Group contributes to employee defined contribution superannuation plans. Contributions to these plans are recognised
as an expense in the Consolidated Income Statement as incurred.
iii.
Defined Benefit Superannuation Plans
The Group’s net obligation with respect to defined benefit superannuation plans is calculated separately for each plan.
The Qantas Superannuation Plan has been split based on the divisions which relate to accumulation members and defined
benefit members. Only defined benefit members are included in the Qantas Group’s net obligation calculations. The
calculation estimates the amount of future benefit that employees have earned in return for their service in the current and
prior periods, which is discounted to determine its present value, and the fair value of any plan assets is then deducted.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the
plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding
requirements.
Remeasurements of the net defined benefit liability or asset, which comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset ceiling, are recognised immediately in other comprehensive income.
The Group determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by
applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then
net defined benefit liability/(asset), taking into account any changes in the net defined benefit liability/(asset) during the
period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit
plans are recognised in the Consolidated Income Statement.
The discount rate used is the corporate bond rate which has a maturity date that approximates the expected terms
of Qantas’ obligations. Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in the Consolidated Income Statement as past service costs. The Group
recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
125
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(Q)
NET FINANCE COSTS
Net finance costs comprise interest payable on borrowings calculated using the effective interest method, unwinding of the
discount rate on lease liabilities, provisions and receivables, interest receivable on funds invested and prepaid, and gains
and losses on mark-to-market movements in fair value hedges, reduced by capitalised interest on aircraft predelivery
payments.
Interest income or expense is recognised in the Consolidated Income Statement using the effective interest method.
Finance costs are recognised in the Consolidated Income Statement as incurred, except where interest costs relate to
qualifying assets, in which case they are capitalised to the cost of the assets. Qualifying assets are assets that necessarily
take a substantial period of time to be made ready for intended use. Where funds are borrowed generally, borrowing costs
are capitalised using the average interest rate applicable to the Group’s debt facilities.
(R)
CAPITAL AND RESERVES
i.
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary shares are recognised as
a deduction from equity, net of tax.
ii.
Repurchase of Share Capital (Share Buy-Backs)
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs, is recognised as a deduction from issued capital.
iii.
Treasury Shares
Shares purchased and held by the Qantas-sponsored Employee Share Plan Trust are recognised as treasury shares at their
purchase price and deducted from equity on the purchase date.
iv.
Employee Compensation Reserve
The fair value of equity plans granted is recognised in the employee compensation reserve over the vesting period. This
reserve will be reversed against treasury shares when the underlying shares vest and transfer to the employee at the fair
value. The difference between the fair value at grant date and the cost of treasury shares used is recognised in retained
earnings (net of tax).
v.
Hedge Reserve
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments and the cumulative change in fair value arising from the time value of options related to future forecast
transactions. Gains or losses relating to ineffective portions are recognised immediately in the Consolidated Income
Statement. The hedge reserve also includes the cost of hedging (hedging premiums), which reflects gains or losses on the
portion excluded from the designated hedging instrument that relates to the time value of an option, the forward element of
a forward contract and any foreign currency basis spread. It is initially recognised in other comprehensive income and
accounted for in the same manner as other gains and losses in the hedge reserve. Cash flow hedges and cost of hedging are
further described in Note 35(C).
vi.
Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the
Financial Statements of foreign controlled entities and investments accounted for under the equity method.
vii.
Other Reserves
Other reserves includes the following:
– The defined benefit reserve, comprising the remeasurements of the net defined benefit asset/(liability), which
is recognised in other comprehensive income
– The fair value reserve, comprising the fair value gains/(losses) on investments measured at fair value through other
comprehensive income
– The put option reserve, comprising the recognition and remeasurements of a put option liability over relevant non-
controlling interests, which is recognised in equity.
viii.
Dividends
A provision is made for the amount of any dividend authorised for payment by the Directors and no longer at the discretion
of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period. Where the
Directors have revoked a decision to pay a dividend, before payment date, it is no longer recognised as a provision.
(S)
COMPARATIVES
Where applicable, comparative balances have been reclassified to align with current year presentation.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
126
35
SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(T)
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision-Making bodies (CODM), being the Chief Executive Officer, Group Management Committee and the Board of
Directors.
Underlying EBIT is the primary reporting measure used by the CODM for the purpose of assessing the performance of the
operating segments, with the exception of the Corporate segment which is assessed using Underlying PBT. Underlying EBIT
of the Group’s operating segments is prepared and presented on the basis that it reflects the revenue earned and the
expenses incurred by each operating segment. The significant accounting policies applied in implementing this basis of
preparation are set out below. These accounting policies have been consistently applied to all periods presented in the
Consolidated Financial Statements.
Segment Performance
Measure
Basis of Preparation
External segment
revenue
External segment revenue is reported by operating segments as follows:
– Net passenger revenue is reported by the operating segment that operated the relevant flight
or provided the relevant service. For Qantas Airlines, where a multi-sector ticket covering
international and domestic travel is sold, the revenue is reported by Qantas International and
Qantas Domestic on a pro-rata basis using an industry standard allocation process
– Other revenue is reported by the operating segment that earned the revenue.
Inter-segment
revenue
Inter-segment revenue for Qantas Domestic, Qantas International and Jetstar Group operating
segments primarily represents:
– Net passenger revenue arising from the redemption of Frequent Flyer points for Qantas Group
flights by Qantas Loyalty
– Net freight revenue from the utilisation of Qantas Group’s aircraft belly space.
Inter-segment revenue for Qantas Loyalty primarily represents marketing revenue arising from
the issuance of Frequent Flyer points to Qantas Domestic, Qantas International and Jetstar
Group. Inter-segment revenue transactions, which are eliminated on consolidation, occur in the
ordinary course of business at prices that approximate market prices. The inter-segment
arrangements with Qantas Loyalty are not designed to derive a net profit from inter-segment
Frequent Flyer point issuances and redemptions.
Share of net profit/
(loss) of investments
accounted for under
the equity method
Share of net profit/(loss) of investments accounted for under the equity method is reported by the
operating segment that is accountable for the management of the investment. The share of net
profit/(loss) of investments accounted for under the equity method for Qantas Airlines’
investments has been equally shared between Qantas Domestic and Qantas International.
Underlying EBITDA
The significant expenses impacting Underlying EBITDA are as follows:
– Salaries, wages and other benefits are reported by the operating segment that utilises the
salaries, wages and other benefits. Where personnel support both Qantas Domestic and
Qantas International, costs are reported by using an appropriate allocation methodology
– Fuel expenditure is reported by the segment that consumes the fuel in its operations
– Aircraft operating variable costs are reported by the segment that incurs these costs
– All other expenditure is reported by the operating segment to which it is directly attributable
or, in the case of Qantas Airlines, between Qantas Domestic and Qantas International using an
appropriate allocation methodology.
To apply this accounting policy, where necessary, expenditure is recharged between operating
segments as a cost recovery.
The impact of discount rate changes on provisions is not allocated to operating segments.
Changes in presentation of income/expenses where the determination of whether the Group is
acting as principal or agent is made on consolidation.
Depreciation and
amortisation
Qantas Domestic, Qantas International and Jetstar Group report depreciation expenses for
passenger and freight aircraft owned or leased by the Qantas Group and flown by the segment.
Other depreciation and amortisation is reported by the segment that uses the related asset.
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
127
36
NEW STANDARDS AND INTERPRETATIONS ADOPTED BY THE GROUP
(A)
MATERIAL ACCOUNTING POLICY INFORMATION
The Group has adopted Disclosure of Accounting Policies (Amendments to AASB 7, 101, 108 and AASB Practice Statement
2) from 1 July 2023.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also
provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful,
entity-specific accounting policy information that users need to understand other information in the financial statements.
Management reviewed the accounting policies disclosed in Note 35 Summary of Material Accounting Policies (2023:
Summary of Significant Accounting Policies) and concluded the amendments did not result in any changes to the
accounting policies themselves or the accounting policy information disclosed in the Group’s Consolidated Financial
Statements.
(B)
PILLAR TWO MINIMUM EFFECTIVE TAX RATE REFORM
The Group has adopted International Tax Reform - Pillar Two Model Rules (Amendments to AASB 112). The amendments
provide a temporary mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately,
and require new disclosures about the Pillar Two exposure.
The Group has applied the relief from deferred tax accounting for Pillar Two top-up taxes and provided new disclosures
about its exposure to these taxes in Note 9 Income Tax.
37
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED BY THE GROUP
A number of new accounting amendments and interpretations have been issued that are not yet effective and not yet
adopted by the Group for the financial year ended 30 June 2024. If applicable, the Group intends to adopt the new or
amended standards and interpretations when they become effective.
AASB 18 Presentation and Disclosure in Financial Statements (AASB 18) was issued in June 2024 and will be applicable to
the Group for the financial year ending 30 June 2028 (including the half-year ending 31 December 2027). AASB 18 will
replace AASB 101 Presentation of Financial Statements and changes key presentation and disclosure requirements,
particularly in relation to the information about financial performance in the statement of profit or loss. AASB 18 also makes
consequential amendments to other AASB pronouncements.
The following other new accounting amendments are not expected to have a significant impact on the Consolidated
Financial Statements of the Group:
– Amendments to AASB 101 Classification of Liabilities as Current or Non-current
– Amendments to AASB 107, AASB 7 Disclosure of Supplier Finance Arrangements
– Amendments to AASB 16 Lease Liability in a Sale and Leaseback
– Amendments to AASB 10 and 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
– Amendments to AASB 121 Lack of Exchangeability
Qantas Annual Report 2024
Notes to the Financial Statements continued
For the year ended 30 June 2024
128
The following consolidated entities are 100 per cent owned body corporates that have been incorporated and have tax
residency in Australia as at 30 June 2024:
AAL Aviation Limited
Q H Tours Ltd
QF BOC 2008-1 Pty Limited
Airlink Pty Limited
Qantas Airways Domestic Pty Limited
QF BOC 2008-2 Pty Limited
Australian Air Express Pty Ltd
Qantas Airways Limited
QF Cabin Crew Australia Pty Limited
Australian Airlines Limited
Qantas Asia Investment Company Pty Ltd
QF Dash 8 Leasing No. 4 Pty Limited
Australian Regional Airlines Pty. Ltd.
Qantas Courier Limited
QF Dash 8 Leasing No. 5 Pty Limited
Eastern Australia Airlines Pty. Limited
Qantas Domestic Pty Limited
QF Dash 8 Leasing No. 6 Pty Limited
Express Freighters Australia (Operations) Pty
Limited
Qantas Freight Enterprises Limited
QF ECA 2008-1 Pty Limited
Express Freighters Australia Pty Limited
Qantas Freight Terminals Pty Limited
QF ECA 2008-2 Pty Limited
Impulse Airlines Holdings Proprietary Limited
Qantas Frequent Flyer Limited
QF ECA A380 2010 No.1 Pty Limited
Jetstar Airways Pty Limited
Qantas Frequent Flyer Operations Pty Limited
QF ECA A380 2010 No.2 Pty Limited
Jetstar Asia Holdings Pty Limited
Qantas Ground Services Pty Limited
QF ECA A380 2010 No.3 Pty Limited
Jetstar Group Pty Limited
Qantas Group Accommodation Pty Ltd
QF ECA A380 2010 No.4 Pty Limited
Jetstar International Group Australia Pty. Limited
Qantas Group Flight Training (Australia) Pty
Limited
QF ECA A380 2011 No.1 Pty Limited
Jetstar Services Pty Limited
Qantas Group Flight Training Pty Limited
QF ECA A380 2011 No.2 Pty Limited
National Jet Operations Services Pty Ltd
Qantas Information Technology Ltd
QF EXIM B787 No. 1 Pty Limited
National Jet Systems Pty Ltd
Qantas Road Express Pty Limited
QF EXIM B787 No. 2 Pty Limited
Network Aviation Holdings Pty Ltd
Qantas SAFFA Pty Limited
Regional Airlines Charter Pty Limited
Network Aviation Pty Ltd
Qantas Superannuation Limited
Sunstate Airlines (Qld) Pty. Limited
Network Holding Investments Pty Ltd
Qantas Ventures Pty Limited
TAD Holdco Pty Ltd
Network Turbine Solutions Pty Ltd
Qantas Wheatbelt Connect Pty Limited
Trip A Deal Holdings Pty Ltd
Osnet Jets Pty Ltd
QF A332 Leasing 1 Pty Limited
Trip A Deal Pty Ltd
Phone A Flight Pty Ltd
QF A332 Leasing 2 Pty Limited
VII Pty Limited
Other consolidated entities within the Group are:
Consolidated Entities
Country of
Incorporation
Entity Type
Tax Residency
Qantas Group
Ownership Interest
30 June 2024
%
Taylor Fry Holdings Pty Limited
Australia
Body corporate
Australia
51
Taylor Fry Pty Limited
Australia
Body corporate
Australia
51
Hangda Ticket Agent (Shanghai) Co. Ltd
China
Body corporate
China
75
Jetabout Japan, Inc.
Japan
Body corporate
Japan
100
Jetstar Holidays Co. Ltd.
Japan
Body corporate
Japan
100
Jetstar International Group Japan Co., Ltd
Japan
Body corporate
Japan
100
QH International Co. Limited.
Japan
Body corporate
Japan
100
Holiday Tours & Travel (Korea) Limited
Korea
Body corporate
Korea
56.25
H Travel Sdn Bhd
Malaysia
Body corporate
Malaysia
75
Jetconnect Limited
New Zealand
Body corporate
New Zealand
100
Jetstar Airways Limited
New Zealand
Body corporate
New Zealand
100
Jetstar NZ Regional Limited
New Zealand
Body corporate
New Zealand
100
Trip A Deal (NZ) Ltd
New Zealand
Body corporate
Australia & New Zealand
100
Holiday Tours & Travel (Singapore) Pte. Ltd.
Singapore
Body corporate
Singapore
75
Holiday Tours & Travel Pte. Ltd.
Singapore
Body corporate
Singapore
75
Qantas Annual Report 2024
Consolidated Entity Disclosure Statement
For the year ended 30 June 2024
129
Consolidated Entities
Country of
Incorporation
Entity Type
Tax Residency
Qantas Group
Ownership Interest
30 June 2024
%
Jetstar Asia Airways Pte. Ltd.1
Singapore
Body corporate
Singapore
49
Jetstar Regional Services Pte. Ltd.
Singapore
Body corporate
Singapore
100
Newstar Investment Holdings Pte. Ltd.1
Singapore
Body corporate
Singapore
49
Orangestar Investment Holdings Pte. Ltd.1
Singapore
Body corporate
Singapore
49
Southern Cross Insurances Pte Limited
Singapore
Body corporate
Singapore
100
Valuair Limited1
Singapore
Body corporate
Singapore
49
Holiday Tours & Travel Ltd
Taiwan
Body corporate
Taiwan
75
Qantas Cabin Crew (UK) Limited
United Kingdom
Body corporate
United Kingdom
100
HTT Travel Vietnam Limited Liability Company
Vietnam
Body corporate
Vietnam
75
The Network Holding Trust
n/a
Trust
n/a
100
The Network Trust
n/a
Trust
n/a
100
1 In accordance with the Air Navigation Act (Singapore 2009), Newstar Investment Holdings Pte. Ltd. and its Singapore-based airline subsidiaries are
substantially owned and effectively controlled by Singapore nationals. Notwithstanding this, the Qantas Group is required to consolidate Newstar Investment
Holdings Pte. Ltd. and its controlled entities into the Qantas Group Financial Statements.
Qantas Annual Report 2024
Consolidated Entity Disclosure Statement continued
For the year ended 30 June 2024
130
1
STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
(A)
KEY ASSUMPTIONS AND JUDGEMENTS
i.
Determination of Tax Residency
Section 295 (3A) of the Corporations Act 2001 (Cth) requires that the tax residency of each entity which is included in the
Consolidated Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident,
‘Australian resident’ has the meaning provided in the Income Tax Assessment Act 1997 (Cth). The determination of tax
residency involves judgement as the determination of tax residency is highly fact dependent and there are currently several
different interpretations that could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the Group has applied the following interpretations:
(a) Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the
Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5.
(b) Foreign tax residency
The consolidated entity has applied current legislation and, where available, judicial precedent in the
determination of foreign tax residency. In addition, the foreign tax authorities have accepted the tax residency
status disclosed above.
(c) Partnership and trusts
Australian tax law does not contain specific residency tests for partnership and trusts. Generally, these entities
are taxed on a flow-through basis so there is no need for a general residence test. There are some provisions
which treat trusts as residents for certain purposes, but this does not mean the trust itself is an entity that is
subject to tax.
ii.
Branches (Permanent Establishments)
Foreign branches of Australian companies are not separate legal entities and therefore do not have a separate residency for
Australian tax purposes. Generally, the Australian company that the branch is a part of will be the relevant tax resident,
rather than the branch operations.
In addition, any foreign branches of a consolidated entity that carries on airline activities (that fly international routes to
foreign countries) are subject to corporate income tax in the legal entity’s country of tax residency, due to the operation of
the various international Double Tax Treaties that exist around the world. The exception to this is any foreign branch
undertaking domestic airline operations in a foreign jurisdiction, which is subject to tax in that foreign jurisdiction.
2
APPLICATION TO THE QANTAS GROUP
(A)
AIRLINE BRANCHES (PERMANENT ESTABLISHMENTS)
Qantas Airways Limited and its subsidiary airlines may operate international flights between their country of incorporation
and other countries, which results in a foreign branch arising in those jurisdictions, but not a separate legal entity. Such
foreign branches have been excluded from this CEDS as they are not separate body corporates. Had such foreign branches
been included in this CEDS, they would be tax resident of the same jurisdiction as the legal entity, as they do not have a
separate Board of Directors and do not make separate management decisions from the legal entity.
(B)
ACQUISITION OF A NON-CONTROLLING INTEREST OF A CONTROLLED ENTITY
The remaining 49 per cent of Trip A Deal NZ Ltd was acquired in June 2024 as part of the acquisition of the remaining 49 per
cent of the Trip A Deal Group of companies. Trip A Deal (NZ) Ltd is tax resident of both New Zealand and Australia, i.e. dual
tax resident, due to being incorporated in New Zealand and having its central management and control located in Australia.
Trip A Deal (NZ) Ltd is currently dormant and it is intended to be wound-up in the near future.
(C)
JOINT VENTURE PARTICIPANTS
Qantas Wheatbelt Connect Pty Limited is a participant in a joint venture within the consolidated entity. As a joint venture
participant, Qantas Wheatbelt Connect Pty Limited has an obligation to pay its share of any tax relating to its involvement in
the joint venture.
Qantas Annual Report 2024
Notes to Consolidated Entity Disclosure Statement
For the year ended 30 June 2024
131
1. In the opinion of the Directors of Qantas Airways Limited (Qantas):
a. The Consolidated Financial Statements and Notes are in accordance with the Corporations Act 2001 (Cth), including:
i. Giving a true and fair view of the financial position of the Qantas Group as at 30 June 2024 and of its
performance for the financial year ended on that date
ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001
b. The Consolidated Entity Disclosure Statement as at 30 June 2024 set out on pages 129 and 131 is true and correct and;
c. There are reasonable grounds to believe that Qantas will be able to pay its debts as and when they become due and
payable.
2. There are reasonable grounds to believe that Qantas and the controlled entities will be able to meet any obligations or
liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between Qantas and those
controlled entities pursuant to ASIC Corporations (Wholly-owned companies) Instrument 2016/785 (Instrument).
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth) from the
Chief Executive Officer and the Chief Financial Officer for the year ended 30 June 2024.
4. The Directors draw attention to Note 1(A) which includes a statement of compliance with International Financial
Reporting Standards.
Signed in accordance with a Resolution of the Directors:
Richard Goyder
Chair
12 September 2024
Vanessa Hudson
Chief Executive Officer
12 September 2024
Qantas Annual Report 2024
Directors’ Declaration
For the year ended 30 June 2024
132
To the Shareholders of Qantas Airways Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the Financial Report of Qantas Airways
Limited (the Company).
– In our opinion, the accompanying Financial Report of
the Company gives a true and fair view, including of the
Group’s financial position as at 30 June 2024 and of its
financial performance for the year then ended, in
accordance with the Corporations Act 2001 (Cth), in
compliance with Australian Accounting Standards and
the Corporations Regulations 2001.
The Financial Report comprises the:
– Consolidated Balance Sheet as at 30 June 2024
– Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity, and Consolidated Cash
Flow Statement for the year then ended
– Consolidated Entity Disclosure Statement and
accompanying basis of preparation as at 30 June 2024
– Notes including a summary of material accounting
policies
– Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end and from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 (Cth) and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our
other ethical responsibilities in accordance with these requirements.
Key Audit Matters
The Key Audit Matters we identified are:
– Passenger revenue recognition
– Frequent Flyer revenue recognition
– Derivative financial instrument accounting
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in our
audit of the Financial Report of the current period.
These matters were addressed in the context of our audit
of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
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Qantas Annual Report 2024
Independent Auditor’s Report
For the year ended 30 June 2024
133
Passenger revenue recognition
Refer to Note 4(A) and 35(D)i. to the Financial Report
THE KEY AUDIT MATTER
Recognition of passenger revenue is a key audit matter
due to:
– its financial significance to the Group;
– the high volume of relatively low value passenger
tickets;
– judgement within the estimate for the proportion of
unused tickets and travel credits which are expected
to expire (breakage); and
– audit effort arising from a variety of ticket conditions
and points of sale.
Historical trend information is used to estimate
breakage and has been supplemented by forward-
looking estimation with regard to current conditions
and changes to conditions of carriage to determine
breakage at 30 June 2024. Estimations, particularly as
they relate to predicting customer behaviours are prone
to a range of possible outcomes for us to consider.
Passenger revenue and ticketing is dependent on IT
systems and controls, therefore we involved our IT
specialists in addressing this key audit matter.
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Our procedures included:
– for key passenger revenue streams, we assessed the
Group’s identification of performance obligations and
revenue recognised by comparing to the relevant features
of the underlying contracts.
– with the assistance of our IT specialists, we analysed the
end to end flow of ticket information through multiple
passenger revenue IT systems and interfaces to evaluate
the recognition of revenue against accounting standards.
– with the assistance of our IT specialists, we tested the key
controls restricting access to authorised users and
preventing unauthorised changes to the relevant IT
systems for financial reporting. We tested key controls
within the system relating to ticket validation and the
recognition of revenue at flight date.
– testing key controls related to the Group’s review and
approval of manual changes to revenue accounting
records, where tickets have been identified as exceptions
to automated validation.
– using data analytics and sampling techniques, checking
passenger revenue transactions to underlying records
including evidence of payment and flight records, to assess
the accuracy and existence of the revenue recognised.
– using data analytics and sampling techniques, checking
passenger revenue received in advance to underlying
records, to assess the completeness of revenue
recognised.
– evaluating the Group’s accounting policy for estimation of
passenger revenue from unused tickets and unredeemed
travel credits, assessing the methodology applied,
checking the calculation and IT system reports used and
challenging the key assumptions. We evaluated the
Group’s related key assumptions against historical trends,
adjusting for the forecast customer behaviour, and
assessed for indicators of bias, using our industry
knowledge and assessed the Group’s ability to reliably
estimate amounts by comparing previous estimates to
actual outcomes.
– we inquired specifically regarding the Group’s actions with
respect to unredeemed travel credit holders impacted by
the COVID-19 pandemic; we read the Group’s external
announcements and communications to customers as
corroboration of our sources.
Qantas Annual Report 2024
Independent Auditor’s Report continued
For the year ended 30 June 2024
134
Frequent Flyer revenue recognition
Refer to Note 4(B), Note 35(D)ii. and Note 35(D)iii. to the Financial Report
THE KEY AUDIT MATTER
Recognition of Frequent Flyer revenue is a key audit
matter due to the high level of audit effort and
judgement required by us in assessing the Group’s
assumptions underpinning the amount deferred as
Unredeemed Frequent Flyer revenue.
We focused on the Group’s assumptions used in their
estimation of the:
– stand-alone selling price of the Qantas Points: the
Group bases this on their estimated price of
available rewards at the time of redemption
weighted in proportion to the expected
redemptions, based on historical experience and
assumptions of future behaviour; and
– proportion of Qantas Points not expected to be
redeemed by members in the future (breakage): the
Group uses actuarial experts to estimate proportion
of Qantas Points not expected to be redeemed by
members in the future.
Given the complex judgements, we involved our
actuarial specialists to supplement our senior team
members in addressing this key audit matter.
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Our procedures included:
– assessing the Group’s methodology used to estimate the
stand-alone selling price of the Qantas Points against the
requirements of AASB 15 Revenue from Contracts with
Customers and the Group’s accounting policy.
– we tested the integrity of the calculation used to estimate
the stand-alone selling price of Qantas Points, including the
accuracy of the underlying calculation.
– we assessed the key inputs of the various redemption
channels used to estimate the stand-alone selling price of
expected future redemptions. We did this by comparing a
sample of available rewards to observable market values,
such as comparable market air fares. We compared the
weighting used in the calculation to historic redemption
patterns, taking into consideration changes in the Frequent
Flyer program.
– involving our actuarial specialists, we assessed key
breakage assumptions against historical experience, recent
trends and the estimated future volume of Qantas Points
redeemed based on the Board approved Forecast and our
understanding of changes in the Frequent Flyer program.
– involving our actuarial specialists, we assessed the
appropriateness of the Group’s breakage methodology
used against accounting standard requirements and the
Frequent Flyer program. We independently recalculated
the breakage using the Group’s inputs and compared to the
Group’s recorded breakage at year end.
– we checked the accuracy of points activity data used in the
calculation of the breakage assumption to source data in
Qantas’ Points system.
Qantas Annual Report 2024
Independent Auditor’s Report continued
For the year ended 30 June 2024
135
Derivative financial instrument accounting
Refer to Note 26 and Note 35(C) to the Financial Report
THE KEY AUDIT MATTER
Cash flow hedge accounting and valuation of financial
instruments is a key audit matter due to:
– the complexity inherent in the Group’s estimation of
the fair value of derivative financial instruments. The
Group’s approach is to use market standard
valuation techniques to determine the fair value of
options, swaps and cross-currency swaps not traded
in active markets;
– the impact of changes in the underlying market price
of fuel and foreign exchange rates which are key
inputs to the derivative valuations;
– the complexity in the Group’s cash flow hedge
accounting relationships driven by an active
financial risk management strategy, including the
restructuring of specific exposures over time;
– the volume of transactions and counterparties;
– the hedging of a high proportion of forecast future
cash flows; and
– the significance of the Group’s financial risk
management program on the financial results.
In assessing this key audit matter, we involved our
valuation specialists to supplement our senior team
members, who understand methods, inputs and
assumptions relevant to the Group’s derivative
portfolio.
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Our procedures included:
– we assessed the appropriateness of the Group’s
accounting policies against the requirements of the
accounting standards.
– testing the Group’s key internal controls. These included
the Group’s controls associated with:
– assessment and approval of the details of trades to
counterparty confirmations;
– assessment of hedge accounting designation;
– assessment of the volume of hedged exposures
compared to total exposures.
– we compared financial instrument fair values in the Group’s
accounting records to the records in the treasury risk
management system.
– with the assistance of our valuation specialists, we
independently estimated the fair values of the Group’s
financial instruments as at 30 June 2024 using recognised
market valuation methodologies and inputs. We adjusted
these fair values for our experience of the range of
acceptable market valuation techniques in estimating fair
values of instruments not traded in active markets. We
compared the Group's valuations recorded in the general
ledger to these fair value ranges.
– we tested a sample of cash flow hedge accounting
designations against the requirements of the accounting
standard. This included a sample of the restructured
positions involving multiple derivatives.
– we compared the Group’s forecast fuel consumption
against the Board approved Forecast and assessed
consistency with other key forward looking assumptions.
– we evaluated the appropriateness of the classification and
presentation of derivative financial instruments and related
financial risk management disclosures against accounting
standard requirements.
Qantas Annual Report 2024
Independent Auditor’s Report continued
For the year ended 30 June 2024
136
Other Information
Other Information is financial and non-financial information in Qantas Airways Limited’s annual reporting which is provided
in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit
opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related
assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we
consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the
work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have
nothing to report.
Responsibilities of Directors for the Financial Report
The Directors are responsible for:
– preparing the Financial Report in accordance with the Corporations Act 2001 (Cth), including giving a true and fair view
of the financial position and performance of the Group, and in compliance with Australian Accounting Standards and the
Corporations Regulations 2001 (Cth)
– implementing necessary internal control to enable the preparation of a Financial Report in accordance with the
Corporations Act 2001 (Cth), including giving a true and fair view of the financial position and performance of the Group,
and that is free from material misstatement, whether due to fraud or error
– assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern
basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
– to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement,
whether due to fraud or error; and
– to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report.
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms
part of our Auditor’s Report.
Qantas Annual Report 2024
Independent Auditor’s Report continued
For the year ended 30 June 2024
137
REPORT ON THE REMUNERATION REPORT
Opinion
In our opinion, the Remuneration Report of Qantas Airways
Limited for the year ended 30 June 2024, complies with
Section 300A of the Corporations Act 2001 (Cth).
DIRECTORS’ RESPONSIBILITIES
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report
in accordance with Section 300A of the Corporations Act
2001 (Cth).
OUR RESPONSIBILITIES
We have audited the Remuneration Report included in
pages 34 to 62 of the Directors’ report for the year ended
30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Julian McPherson
Partner
Sydney
12 September 2024
Qantas Annual Report 2024
Independent Auditor’s Report continued
For the year ended 30 June 2024
138
The shareholder information set out below was applicable as at 12 August 2024.
TWENTY LARGEST SHAREHOLDERS
Shareholders
Ordinary Shares Held
% of Issued Shares
HSBC Custody Nominees (Australia) Limited
550,766,175
35.12
Citicorp Nominees Pty Limited
227,702,682
14.52
J P Morgan Nominees Australia Pty Limited
221,338,893
14.11
National Nominees Limited
48,929,381
3.12
Pacific Custodians Pty Limited (Emp Share Plan Trust)
29,497,828
1.88
Pacific Custodians Pty Limited (QAN Plans Ctrl)
21,081,852
1.34
BNP Paribas Noms Pty Ltd (DRP)
15,524,771
0.99
HSBC Custody Nominees (Australia) Limited – GSCO ECA
14,317,307
0.91
HSBC Custody Nominees (Australia) Limited – A/C 2
12,736,313
0.81
BNP Paribas Nominees Pty Ltd (Agency Lending A/C)
12,730,427
0.81
HSBC Custody Nominees (Australia) Limited (NT – Commonwealth Super Corp A/C)
11,880,351
0.76
Maxfill Australia Pty Ltd
10,350,000
0.66
UBS Nominees Pty Ltd
6,720,616
0.43
HSBC Custody Nominees (Australia) Limited – GSI EDA
5,872,878
0.37
Citicorp Nominees Pty Limited (Colonial First State Inv A/C)
5,335,044
0.34
HSBC Custody Nominees (Australia) Limited
3,344,317
0.21
Netwealth Investments Limited (Wrap Services A/C)
3,201,751
0.20
BNP Paribas Nominees Pty Ltd (Hub24 Custodial Serv Ltd)
2,536,809
0.16
BNP Paribas Nominees Pty Ltd (IB AU Noms Retail Client)
2,108,390
0.13
HSBC Custody Nominees (Australia) Limited (GSCO Customers A/C)
2,083,534
0.13
Total
1,208,059,319
77.00
DISTRIBUTION OF ORDINARY SHARES
Analysis of ordinary shareholders by size of shareholding:
Number of Shares
Ordinary Shares Held
Number of Shareholders
% of Issued Shares
1-1,0001
40,491,375
102,528
2.58
1,001-5,000
129,242,309
54,294
8.24
5,001-10,000
55,455,233
7,805
3.54
10,001-100,000
94,395,440
4,521
6.02
100,001 and over
1,248,676,039
168
79.62
Total
1,568,260,396
169,316
100.00
1 2,939 shareholders hold less than a marketable parcel of shares in Qantas, as at 12 August 2024.
ON-MARKET SHARE BUY-BACK
On 29 August 2024, Qantas announced its intention to undertake an on-market share buy-back of up to $400 million. This is
in addition to the amount carried over under the $400 million buy-back announced in February 2024.
SUBSTANTIAL SHAREHOLDERS
The following organisations have disclosed a substantial shareholding notice to ASX as at 12 August 2024:
Shareholders
Ordinary Shares Held
% of Issued Shares
L1 Capital Pty Ltd and L1 Capital Strategic Equity Management Pty Ltd1
90,798,912
5.27
Perpetual Limited and its related bodies corporate2
105,529,663
6.48
State Street Corporation and subsidiaries3
85,810,623
5.27
1 Substantial shareholding as at 14 March 2024, as per notice dated 18 March 2024.
2 Substantial shareholding as at 18 April 2024, as per notice dated 22 April 2024.
3 Substantial shareholding as at 6 May 2024, as per notice dated 8 May 2024
Qantas Annual Report 2024
Shareholder Information
For the year ended 30 June 2024
139
2024
2025
22 February
Half-year results announcement
27 February
Half-year results announcement
30 June
Year end
12 March
Record date for interim dividend*
29 August
Preliminary final results announcement
16 April
Interim dividend payable*
25 October
Annual General Meeting
30 June
Year end
28 August
Preliminary final results announcement
17 September
Record date for final dividend*
15 October
Final dividend payable*
24 October
Annual General Meeting
*Subject to a dividend being authorised by the Board.
2024 ANNUAL GENERAL MEETING
The 2024 AGM of Qantas Airways Limited will be held in a
hybrid format at 11am AEDT on Friday 25 October 2024.
Further details are available in the Annual General Meeting
section on the Qantas Investor website at:
investor.qantas.com/home/
COMPANY PUBLICATIONS
In addition to the Annual Report, the following publications
can be accessed from www.qantas.com/au/en/qantas-
group/acting-responsibly/our-reporting-approach.html
– Qantas Sustainability Report
– Qantas Group Code of Conduct and Ethics
– Qantas Group Corporate Governance Statement
– Qantas Group Inclusion and Diversity Policy
– Qantas Group Modern Slavery and Human Trafficking
Statement
– Qantas Group Human Rights Policy Statement
– Workplace Gender Equality Reports
– Qantas Shareholder Communications Policy.
REGISTERED OFFICE
Qantas Airways Limited ABN 16 009 661 901
10 Bourke Road, Mascot NSW 2020 Australia
Telephone +61 2 9691 3636 www.qantas.com
QANTAS SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street, Sydney NSW 2000 Australia, or
Locked Bag A14, Sydney South NSW 1235 Australia
Telephone 1800 177 747 (toll free within Australia)
International +61 2 8280 7390
Facsimile +61 2 9287 0309
Email registry@qantas.com
SECURITIES EXCHANGE
Australian Securities Exchange
Exchange Centre, 20 Bridge Street Sydney NSW 2000
Australia
ADDITIONAL SHAREHOLDER INFORMATION
Using your Shareholder Reference Number (SRN) or Holder
Identification Number (HIN) and postcode of your registered
address, you are able to view your holding online through
Qantas’ share registry, Link Market Services. Log on at:
www.linkmarketservices.com.au, where you will have the
option to:
– View your holding balance
– Retrieve holding statements
– Review your dividend payment history
– Access shareholder forms.
The Investor Centre also allows you to update or add details
to your shareholding, including the following:
– Change or amend your address if you are registered with
an SRN
– Nominate or amend your direct credit payment
instructions
– Set up or amend your DRP instructions
– Sign up for electronic communications
– Add/change TFN/ABN details.
COMPANY SECRETARIES
Andrew Finch
Benjamin Elliott
Benjamin Jones
An electronic copy of this Annual Report is available in the
Annual Report section on the Qantas Investor website at:
investor.qantas.com/home/
Further information about the Qantas Group can be found on
our corporate site at: www.qantas.com/qantas-group
Qantas Annual Report 2024
Financial Calendar and Additional Information
For the year ended 30 June 2024
140
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Qantas Airways Limited
ABN 16 009 661 901