Qantas to freeze pay and bonuses for executives

Qantas Group is to implement a pay freeze and remove bonuses for its executives in 2014 in a bid to accelerate cost reductions across all areas of the business.

Its chief executive officer (CEO) and board will also experience a pay cut.

The Australian airline group expects to report an underlying loss before tax in the range of AUS$300 million (£167 million) for the six months ending 31 December 2013.

The pay freeze and bonus cuts are part of a bid to achieve total cost savings of AUS$2 billion (£1.1 billion) over three years.

According to Qantas Group, the outlook for the second half of 2014 remains volatile and, given the uncertainty in global economic conditions, fuel prices and foreign exchange rates, it is not possible to provide further guidance at this time.

The group will also launch an immediate review to identify structural changes that could potentially unlock sources of capital and value for shareholders. It stated that no options would be excluded from the review.

Alan Joyce, CEO at Qantas, said: “We will do whatever we need to do to secure the Qantas Group’s future.

“The challenges we now face are immense, but we will overcome them and we will continue to build a stronger and better Qantas for Australia.

“Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment, including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas’ high-cost base.

“We will focus relentlessly on cutting costs and improving productivity, while maintaining our competitive advantages as a business.”