Joyce Says Qantas Board Supports Him After Aid Rejected
Qantas Airways Ltd. (QAN) Chief Executive Officer Alan Joyce said he’s still backed by the airline’s board after the government rejected his plea for debt support following a A$235 million ($210 million) loss.
“No management team here or anywhere in the world is perfect. Of course people have made mistakes,” Joyce said at a lunch event in Sydney today. “I talk to the chairman quite a lot. He’s very supportive, the board’s very supportive, and our shareholders are very supportive.”
Australian Prime Minister Tony Abbott ruled out guaranteeing the debt of Australia’s largest carrier March 3, and will instead try to change a law capping foreign investment in Qantas. The 93-year-old airline, which has announced steps including job cuts and sale of some planes as it fights for market share with Virgin Australia Holdings Ltd. (VAH), says the legal change has little chance of passing Australia’s Senate.
“Under good management, there is no reason why Qantas cannot be very profitable,” Abbott said in an interview with Channel Seven television yesterday. The former state-owned carrier wanted the government to “play favorites” between itself and Virgin, he told a media conference March 3.
Qantas rose 0.4 percent to A$1.14 at the close in Sydney trading. The shares have slumped 28 percent in the past year, compared with a 7.3 percent gain in the S&P/ASX 200 index.
Last week Qantas announced 5,000 job cuts, the delay or sale of 50 aircraft, and a companywide pay freeze.
Irish-born Joyce, 47, took over as CEO in the midst of the global financial crisis in November 2008. His base salary last year was the highest of any airline chief executive globally.
He’s promised to cut his take-home pay 36 percent as part of the changes announced last week, which are intended to save about A$2 billion from the carrier’s costs.
The cost of insuring against non-payment of Qantas’s debt using credit-default swaps climbed 6 basis points to 272 basis points yesterday, its highest level in three weeks.
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