Qantas chief gives up pay, bonuses as international flights slashed
Qantas chief Alan Joyce will go without pay for three months and give up bonuses, as the airline asks its workforce to volunteer to take unpaid leave to save jobs.
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Qantas Airways chief executive Alan Joyce will go without a salary for three months and give up bonuses potentially worth more than $4 million as the coronavirus outbreak up-ends the industry.
The airline has made another deep round of capacity reductions on international routes and will start asking its workforce to volunteer to take unpaid leave as it works to slash costs without job losses.
The spread of Covid-19 has also hit the Flying Kangaroo’s plan to fly non-stop to London and New York — and the airline has pushed Airbus for an extension to a March 31 deadline to order planes suitable for the ultra long-haul journeys.
“We haven’t heard from Airbus yet but we’re hopeful we can get an extension,” Mr Joyce said on Tuesday.
Qantas and Jetstar will reduce flights on routes to Asia, the US, Britain and New Zealand until mid-September.
The latest reductions follow cuts announced late last month and mean the group has cut international capacity by 23 per cent compared with the same time last year. Flight capacity to Asia is down by 31 per cent, while capacity is down by 19 per cent to the US, 17 per cent to Britain and 10 per cent to New Zealand.
Qantas said that rather than stop flying routes altogether, it would use smaller aircraft and reduce the frequency of flights to maintain overall connectivity.
This would mean eight of the group’s biggest aircraft, the Airbus A380, would be grounded until midway through September.
Two other A380s are undergoing scheduled heavy maintenance and cabin upgrades, leaving just two A380s flying.
The planned launch of a Brisbane to Chicago route will be delayed from April 15 to September and the airline has also cancelled a $150 million share buyback scheme.
Mr Joyce said there had been a “sudden and significant” drop in flight bookings over the past two weeks as Covid-19 spread globally.
“We’re in a good position to ride this out but we need to take steps to maintain this strength,” he said.
“Less flying means less work for our people but we know coronavirus will pass and we want to avoid job losses wherever possible.”
As part of cost savings measures, Mr Joyce will not collect his base pay for the rest of the financial year.
His base pay is worth $2.17 million a year, meaning he will give up about $668,000.
Mr Joyce has also had his short-term bonus for 2019-20 cut to zero.
That is potentially worth a maximum of $4.34 million, although Mr Joyce collected $2.38 million in 2018-19.
Qantas chair Richard Goyder will also not take any fees for the rest of the financial year.
Qantas said the capacity cuts would affect about 2000 jobs although the airline had not laid off any workers.
Instead it had asked staff to take annual and long-service leave, as well as unpaid leave.
Ratings agency Moody’s said while coronavirus was “clearly credit negative for the airline industry”, Qantas had a strong “balance sheet and good liquidity” to navigate it.
Shares in Qantas rose 7.3 per cent on Tuesday to close at $4.45.