Qantas has reported a $1.25 billion post-tax profit, which is a 28% drop compared to last year.
👉 Background: Qantas is the third-oldest airline in the whole wide world. But over the past few years, it has consistently been in the news due to mass layoffs, profiting off ghost flights, an ACCC inquiry, and a new CEO brought in.
👉 What happened: Now, Qantas has reported a $1.25 billion post-tax profit, which is a 28% drop compared to last year. This has come after Qantas increased its spending to settle legal cases and rebuild customer relations.
👉 What else: As part of this earnings update, the new CEO made it clear that the past year has been focused on cleaning up the damage caused previously (ahem* previous management).
💡When a new CEO steps in, they often get a free-pass in their first few earnings updates - especially if that new CEO is replacing someone who underperformed.
💡The new CEO can often blame previous management for any poor results in the first earnings update. And a result, they are often given leeway to make bold and even costly decisions as a way to ‘reset’ the company.
💡It’s not just Qantas. Tabcorp’s new CEO has just cut a turnaround strategy that was introduced by previous management, and has written down more than $500 million of assets with the hopes of resetting the business.
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