Qantas poised to reveal further cost cutting

Qantas appears poised to announce a new round of cost-cutting after chief executive Alan Joyce said he would forgo a pay rise and bonus because of plunging profits.

The Australian carrier is due to report its results for the year to the end of June on Thursday (August 23) when the Qantas boss is expected to reveal increased losses from the airline’s international operation.

Losses at the division are forecast to have risen to A$450 million (£300 million).

The carrier has already announced substantial job cuts and is restructuring, with plans to separate its international and domestic operations.

Joyce’s action in refusing a bonus and pay rise mirrors that of former British Airways boss Willie Walsh, now head of BA parent IAG.

BA and Qantas are partners in the Oneworld alliance and IAG has previously shown interest in taking a stake in Qantas.

Joyce told the Australian Financial Review: “It’s appropriate that when company returns go down, executive pay should go down as well.

“It has been an extremely tough year and … my pay has to have a correlation with the profitability of the company.”

A leading Sydney aviation analyst said: “There will be pain for the Qantas workforce in the next 12 months.”

The carrier already aims to make savings of A$300 million (£200 million) and has announced 2,800 full-time jobs will go out of the 26,000 employed at Qantas and subsidiary Jetstar.

Earlier this month Joyce promised “an underlying profit but a statutory loss”. He said this would “reflect the cost of the industrial dispute [last year], the high fuel price and the size and pace of the transformation of Qantas.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.