Qantas airways has slashed the pay of its chief executive by more than 80 per cent and sold tickets for a flight to nowhere as part of efforts to survive the coronavirus pandemic.
The australian airline said alan joyce, one of the worlds highest paid airline executives in recent years, would not take any salary in the final three months of the 2020 financial year. he has deferred a long-term incentive payment of almost 350,000 shares until next year, pending board approval. overall, mr joyces pay plunged 83 per cent to a$1.7m (us$1.2m) in the year to june.
Total executive remuneration at qantas fell to a$6.9m in the 2020 financial year, down from a$22.4m in the prior year, according to the companys annual report, published on friday.
The pay cuts come as qantas has implemented sweeping measures to stay afloat as the covid-19 crisis has brought air travel to a halt. they include shedding 6,000 staff, furloughing a further 20,000 and grounding its international fleet. australia has closed its international borders, restricted internal air travel and introduced strict quarantine procedures.
Management and the board showed important leadership by taking no salary for several months and then a reduced salary for months after that, said richard goyder, chairman of qantas. this is obviously not the same as those stood down or facing redundancy, but it comes at a time when demands on management are greater than ever.
Qantas has turned to other avenues to generate revenue with much of its flight grounded. the airline said on friday that tickets for a seven-hour scenic tour of australia which takes in landmarks including uluru, byron bay and the great barrier reef sold out within 10 minutes. tickets for the flight to nowhere cost between a$787 and a$3,787.
Last month, the airline began selling luxury pyjamas usually provided to business class passengers for a$25 a pair.
Trade unions said the fact that qantas executives were still being given multimillion-dollar payments was sickening and criticised mr joyce for deferring, rather than sacrificing, his long-term bonus.
It shows just how arrogant and out of touch this management is when they believe that stalling their million-dollar salaries and share options for a few months will make it look like they are sharing the burden, said michael kaine, national secretary of the transport workers union.
Investors have begun to question executive pay awards in the struggling airline sector. last week, a fifth of voting shareholders voted against the remuneration report of international airlines group, owner of british airways, which included a bonus of 883,000 for departing chief executive willie walsh for his work in 2019, as part of a total package worth just under 3.2m.
Mr joyce was paid a bumper a$24.5m in 2017, mainly due to a sharp jump in qantass share price following a restructuring at the airline. oscar munoz, chief executive of united airlines, received $18.7m in the same year, while doug parker, head of american airlines, received $11.1m.