Qantas Airways Ltd. was hit with its first sell rating in a year, reflecting investor concern about the cost of repairing the airline’s bruised reputation.
CLSA’s Justin Barratt cut his recommendation on Qantas shares to reduce from accumulate, becoming the sole analyst with a sell rating on the airline among 17 tracked by Bloomberg. Qantas is Asia’s worst-performing airline stock in September, with the shares down 11.5%.
Qantas said Monday it will spend an extra A$80 million ($51 million) on passenger improvements in the year ending June 2024, in addition to the A$150 million previously allocated in an attempt to soothe passengers disgruntled by cancellations and long call wait times.
Compounding the pressure on Qantas, the Australian & International Pilots Association called on Chairman Richard Goyder to resign, an unprecedented move by the airline’s union. “The reform and change that Qantas so desperately needs cannot come under this chairman,” AIPA President Tony Lucas said in a statement.
Goyder “has overseen what may well be one of the most damaging periods in Qantas’ history,” Lucas said.
Australia’s top court this month ruled that the airline illegally sacked almost 1,700 ground workers during the pandemic, opening it up to compensation payments. In August, the country’s competition watchdog sued Qantas for allegedly taking payment for seats on flights that were already canceled. It wants a record fine to be imposed.
