News National Junked: Qantas bosses should quit, says senator

Junked: Qantas bosses should quit, says senator

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Independent senator Nick Xenophon says now that Qantas’ credit rating is at junk status, its shareholders should “junk” its chief executive and board.

Ratings agency Standard and Poor’s has downgraded the airline’s credit rating, increasing the cost of financing and restricting access to investors that do not invest in lower-rated companies.

Trading in Qantas shares was temporarily halted pending the decision after the company announced it would cut 1000 jobs and flagged an underlying half-year loss of up to $300 million.

Senator Xenophon said shareholders should call an extraordinary general meeting to sack the board.

“Alan Joyce would be to Qantas what Captain Francesco Schettino was to the Costa Concordia,” the South Australian senator told reporters in Canberra on Friday.

“Because Qantas has now gone to junk status, one way of fixing the problem is to junk Alan Joyce and the board.

“Enough is enough. The shareholders need to rise up … because otherwise we will end up trashing a great airline.”

He said allowing Qantas to become foreign owned was not in the national interest, nor was allowing the airline’s assets to be stripped by “private equity buccaneers”.

PM open to foreign investment

Prime Minister Tony Abbott might consider allowing a greater foreign stake in Qantas, suggesting he would prefer that to the “bottomless pit” of taxpayer support.

The national carrier has forecast a six-month loss of up to $300 million, which it blames on the strong Australian dollar, high fuel costs and Virgin Australia “distorting” the market.

It says “government action” will be key in enabling it to keep competing effectively.

But Mr Abbott has no time for the idea of taxpayer subsidies.

“Qantas has to get its house in order, that’s what has to happen,” he told Fairfax Radio on Friday.

“If we subsidise Qantas, why not subsidise everyone?

“And if we subsidise everyone, that’s just a bottomless pit into which we will descend.”

Shares fall again

Earlier, Qantas shares were placed in a trading halt ahead of an announcement from ratings agency Standard and Poor’s on its credit rating.

Standard and Poors announced it had downgraded the airline’s shares to junk status, a rating below investment grade. The company’s rating slipped to a “BB+/B” rating.

Qantas requested the trading halt on Friday, pending the receipt of information from Standard and Poor’s in relation to its credit rating.

In late trade on Friday, the shares had slipped to $1.035, down from $1.07 on Thursday.