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Qantas: Alan Joyce to forgo bonus and pay rise | Qantas: Alan Joyce to forgo bonus and pay rise |
(40 minutes later) | |
Alan Joyce, chief executive of Qantas, has said he will forgo his bonus and pay rise after a sharp plunge in the airline's profits. | Alan Joyce, chief executive of Qantas, has said he will forgo his bonus and pay rise after a sharp plunge in the airline's profits. |
Qantas has forecast a 90% fall in its profits for the financial year ending 30 June, amid losses at its international operations and high fuel costs. | Qantas has forecast a 90% fall in its profits for the financial year ending 30 June, amid losses at its international operations and high fuel costs. |
The firm has also been hit by a series of strikes and labour disputes. | The firm has also been hit by a series of strikes and labour disputes. |
The troubles have seen its share price drop 35% since April this year. | |
"It's absolutely appropriate that when company returns go down, executive pay should go down as well," Mr Joyce was quoted as saying by the Australian Financial Review. | |
"It has been an extremely tough year for Qantas shareholders and what we want to show is that my pay has to have a huge correlation with the profitability of the company." | "It has been an extremely tough year for Qantas shareholders and what we want to show is that my pay has to have a huge correlation with the profitability of the company." |
When contacted by the BBC, Luke Enright, a spokesman for Qantas, confirmed the comments. | When contacted by the BBC, Luke Enright, a spokesman for Qantas, confirmed the comments. |
The firm is scheduled to announce its earnings for the last financial year on 23 August 2012. | |
Further pain? | |
One of the biggest areas of concern for Qantas has been its international operations. Full year losses at the division are expected to rise to A$450m ($470m; £300m). | |
Amid such losses, the airline has announced various restructuring measures including plans to split its international and domestic operations into separate entities. | |
The carrier has also announced jobs cuts as part of its efforts to cut costs. | |
Analysts say that Mr Joyce's decision to give up his bonus and pay rise, indicate that further cost-cutting measures may shortly be introduced. | |
"This is a clear signal that there will be further attempts to cut labour costs at Qantas' home base," Michael McCarthy, chief market strategist at CMC Markets in Sydney told the BBC. | |
"There will be pain for Qantas workforce within the next 12 months." | |
Mr McCarthy added that Mr Joyce's decision demonstrated "his commitment to revive the business, even if it takes personal sacrifices". |
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