Shareholders back strategy: Qantas CEO
Shareholders back strategy: Qantas CEO

Qantas chief executive Alan Joyce says shareholders are backing his strategy for turning the airline's fortunes around, despite a tumbling share price due in part to hedge fund activity.

Mr Joyce says Qantas's current situation was no different to that of many airlines around the world, also struggling with weak global economies and high fuel prices.

And he is confident that recent and future moves to improve Qantas's financial performance, particularly through bringing its international operations back to profitability, will eventually be reflected in the share price.

"The last thing people want to do is people overreacting to the situation and making wrong decisions," Mr Joyce told reporters on the sidelines of the International Air Transport Association's annual general meeting in Beijing on Monday.

"We are very focused on what we need to do and the vast majority of our shareholders are very supportive of that."

Qantas shocked the market last week when it issued a sharp profit downgrade that sent the Flying Kangaroo's share price tumbling to all-time lows.

After falling 19 per cent on the day of the announcement, Qantas's stock continued to decline over the following days to close the week at 97 cents.

It has fallen 33.5 per cent since January 1, 2012, representing a loss of $1.3 billion from Qantas's market capitalisation.

Qantas said underlying profit before tax for the full 2011/12 year was expected to come in between $50 million and $100 million, down about 90 per cent from the prior corresponding year.

Mr Joyce said some of the reasons for the downgrade, such as the sudden drop in the long-term bond rate and the recent decline in yields, an industry term for average airfares per passenger, could not have been foreshadowed.

And he said hedge funds had also played a role in pushing the stock lower.

"It was a surprise because we didn't expect certainly hedge funds to come in and to play heavy volumes on the stock at the end of the week but that has happened," Mr Joyce said.

"We know and the vast majority of the shareholders know that there is more value in Qantas."

The West Australian

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