Qantas Bosses Take Huge Pay Cut, Slash Flights As Coronavirus Infects Travel Industry
Qantas has slashed its flight schedule by 25 percent, with boss Alan Joyce to receive no salary for the next six months, as the airline battles to respond to a "significant" drop in travel due to coronavirus concerns.
"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," airline CEO Joyce said on Tuesday.
The national carrier has announced it will slash the number of flights it operates to Asia, the United States, United Kingdom and New Zealand following a "sudden and significant drop in forward travel demand" due to the coronavirus outbreak.
In a statement to the Australian Stock Exchange, Joyce said Qantas was "a strong business in a challenging environment" but admitted it had suffered a "sharp" drop in travel bookings.
The capacity of flights to Asia will be slashed by 31 percent over the next six months, by 19 percent to the U.S., 17 percent to the U.K., and 10 percent to New Zealand.
Qantas said it would use smaller aircraft and reduce flight frequency, while it would alter some flight routes and delay the start of its new Brisbane to Chicago route from April to September.
The airline's budget carrier, Jetstar, will make "significant" cuts to its overseas routes. Flights to Bangkok will be suspended, and flights to Vietnam and Japan will be halved. This follows last week's suspension of a daily flight from the Gold Coast to Seoul.
"In total, this is the equivalent of grounding 38 Qantas and Jetstar aircraft across the international and domestic network," the airline said.
Joyce -- who was paid $9.9 million last year -- and Qantas chairman Richard Goyder, will take no fees for the rest of the financial year to July, while the airline's management will have their bonuses set to zero. The Qantas board and group executive management will take a 30 percent fee reduction.
Staff are also being encouraged to take paid or unpaid leave.
"We expect lower demand to continue for the next several months, so rather than taking a piecemeal approach we're cutting capacity out to mid-September," Joyce said.
"We're in a good position to ride this out, but we need to take steps to maintain this strength."
"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."
Qantas said passengers who will be affected by the changes will be contacted in coming days. They will "typically" be offered an alternative flight, or be rebooked to another day.
"The latest information will be published on Qantas and Jetstar website," the airline said.