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Qantas spends A$90m on bonus for 28,000 after wage freeze
[SYDNEY] Qantas Airways, which froze all employee wages for 18 months as part of a A$2 billion (S$2.06 billion) cost-cutting plan, will pay a A$90 million bonus to its staff amid a profit recovery.
As many as 28,000 employees will receive a one-off payment equal to five percent of their annual base salary shortly after the company releases annual results Aug 20, Australia's largest carrier said in a regulatory statement Friday. About A$875 million of the planned savings had been made by its financial year-end of June 30, Sydney-based Qantas said.
Qantas grounded its global fleet for two days in 2011 in a bid to break labor union strikes over pay and job security, leading to the company's first net loss since its 1995 listing. Cost reductions, weaker competition and the falling price of jet fuel have since made Qantas the best-performing stock on the S&P/ASX 200 index over the past 12 months.
"Our ability to make these bonus payments reflects a bright future," Alan Joyce, chief executive officer, said in the statement. "The rapid turnaround of the Qantas Group has only been made possible through the dedication and hard work of all our people." Joyce cut his own base pay and missed a performance bonus in the fiscal year ending June 30, 2014 as the company fell to a A$2.84 billion loss. The reduction in his compensation was enough to prevent the company's operating and capital costs exceeding its cash income in the year.
The A$90 million payment is equivalent to about 8.6 per cent of the A$1.04 billion average of eight analyst estimates for the airline's net profit in the 2016 fiscal year, according to data compiled by Bloomberg. Staff on Qantas's management bonus program won't be eligible for the new bonus, the company said in its statement.