Qantas’ Alan Joyce has joined the growing list of airline chiefs taking pay cuts to tackle the coronavirus crisis.
For the rest of the financial year (FY) ending 30 June 2020, Joyce will take no salary while the group executive management team will take a 30% pay cut.
Likewise, the chairman of the board will waive all fees and board members will reduce fees by 30%.
The company has committed to zero bonuses for FY 2020 and is freezing all non-essential recruitment and consultancy work. All Qantas and Jetstar employees have also been asked to take paid or unpaid leave, in light of its reduced flying capacity.
“When revenue falls you need to cut costs, and reducing the amount of flying we do is the best way for us to do that,” says Joyce.
“Less flying means less work for our people, but we know coronavirus will pass and we want to avoid job losses wherever possible.”
He adds: “It’s hard to predict how long this situation will last, which is why we’re moving now to make sure we remain well positioned. But we know it will pass, and we’ll be well positioned to take advantage of opportunities when it does.”
According to Qantas’ last annual report, key executives’ base salaries amounted to A$6.7 million ($4.4 million) in FY 2019 alongside A$2.8 million in cash bonuses. This includes Joyce’s A$2.1 million base pay and A$1.2 million cash bonus.
In the same period, the non-executive board received A$2.5 million in fees, including $457,000 remuneration to chairman Richard Goyder, who took up the role from 26 October 2018.
Meanwhile, the carrier expects to reap the benefits of lower crude benchmarks and now expects a A$3.74 billion fuel bill for the year, compared to its last estimate of A$3.85 billion as at 20 February.
“A material drop in fuel price has provided a significant cost benefit in addition to the saving from lower consumption,” it says.
Last month, Qantas reported that underlying profit before tax for the six months ended 31 December 2019 came in flat at A$771 million, while statutory net profit declined by 4% to A$445 million.
Other Asia-Pacific carriers who have also announced executive pay cuts include Air New Zealand, Singapore Airlines, Malaysia Airlines, Indonesia’s Malindo Air, Taiwan’s China Airlines, and South Korea’s Asiana Airlines.