Airline Boss Takes $250K Pay Cut As Flights Fall Over Coronavirus Outbreak
Air New Zealand's CEO Greg Foran has announced he will cut his pay by 15 per cent and implement cost-saving measures after the company said it was facing mounting uncertainty brought on by COVID-19.
Foran has proposed his AUD$1.58 million wage pay be cut by AUD$239,000, as the airline implements a hiring freeze for all non-critical roles.
The chief executive has also offered staff to take unpaid leave and extended a salary freeze for its executive team that has been in place since May.
The airline said on Monday it will not be releasing its annual earnings to the market after the uncertainty caused by the global rise in coronavirus cases.
Air NZ cut back its total capacity on flights by 10 percent across its network, reducing Asian flights by 26 percent through June.
Foran said coronavirus has created an "unprecedented situation", making it difficult to predict future demand patterns.
“We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of COVID-19 to most countries on our network as well as here in New Zealand,” Foran said.
“Air New Zealand is a strong and resilient business operated by a world-class team with deep experience having navigated prior shocks to our business and industry," he said.
"While we have already made swift adjustments to our operations, we are prepared to take further actions to address the ongoing demand impact of COVID-19."
The airline said it was pursuing a range of measures in response to the swift decline of demand, including delaying spending and activity where it is not urgently needed.
According to a preliminary estimate from an industry body released last month, airlines in the Asia-Pacific region stand to lose AUD$42.1 billion of revenue this year due to a drop in demand as a result of the coronavirus.
The news comes after Air NZ confirmed a passenger onboard one of its planes on February 25 had tested positive for coronavirus.
The passenger had travelled from Singapore to Auckland before flying to Palmerston North on March 2 and then returning to Auckland on the same day.
Air New Zealand Chief Medical Officer Doctor Ben Johnston said on Wednesday the airline had "anticipated and planned for this scenario".
"The health and safety of passengers and crew is Air New Zealand's top priority and our aircraft already undergo a thorough cleaning process, which includes cleaning surfaces such as tray tables and in-flight entertainment screens with a disinfectant that kills viruses," Dr Johnston said.
"We also remove all headsets, headrest covers, pillow covers, and blankets after every international flight. Domestic and regional services surfaces and bathrooms are wiped with disinfectant spray. The three aircraft this customer flew on will now also undergo a deep clean."