Joyce defends eye-watering $24m salary
QANTAS boss Alan Joyce has defended his staggering $24 million annual salary, a day after he was revealed as Australia's top-earning chief executive officer.
Mr Joyce took home $23,876,351 last year, the same year Qantas posted a record profit of $1.6 billion, according to new analysis of CEO pay released yesterday by the Australian Council of Superannuation Investors.
But when pressed about his salary at the National Press Club in Canberra this afternoon, Mr Joyce said it was wasn't actually that high.
"My salary was determined by our shareholders. By the way, that information is now over two years' old. The salary has come down quite significantly since then," Mr Joyce said.
"But that was because the Qantas share price went from $1 to $6. That's because our market capital went from just over $2 billion to $10 billion. And our shareholders did exceptionally well out of it, and every report that Qantas has had, has had a 98 per cent or 99 per cent support.
"The shareholders want the CEO and the management to be incentivised to actually turn the company around. And it was, I think, the biggest turnaround in corporate Australian history. That's why that happened."
Mr Joyce's salary was the first question raised as he and Virgin Australia Group chief executive Paul Scurrah addressed the National Press Club to call for changes to excessive passenger fees charged by Australia's airports.
In a rare show of unity, the rival airline bosses called for intervention on "monopoly airports", which they accused of reaping massive profits at the expense of airlines and passengers.
"It absolutely costs a lot more than it should to land an aircraft at these airports," Mr Joyce said. "For us, the Qantas Group, airport charges are now the highest charges after fuel expenses, aircraft and wages.
"Australia is home to four of the five most profitable airports in the world. Funnily enough, none of these airports rate in the best airports in the world."
Mr Joyce said airport fees in Australia were more than double what airlines paid in the US and 50 per cent more than the fees charged in Europe.
"So, we do have a unique problem here in Australia," he said.
Mr Joyce said airlines wanted airports to drop passenger fees and the Federal Government to impose more regulation to keep the airport monopoly in check.
"Australian airports are literally the only game in town," Mr Joyce said.
"By their name, we have a Sydney Airport, a Brisbane Airport, a Melbourne Airport. We cannot pack up shop and move 15 minutes down the road. They have airlines and passengers over a barrel."
Mr Joyce denied airlines would pocket the profits if airports dropped their passenger fees, and said the savings would be passed onto consumers.
"The difference between Qantas, Virgin, Rex and the airports is that we actually face real competition," he said.
"We compete on the price of every single seat on every single flight, and it's this competition which ultimately sets airfares. So, if there's a cost advantage, a cost benefit, history has shown that the airlines will use it to sharpen fares."
Mr Scurrah warned an unregulated monopoly allowed airports to "increase prices at will".
"How else would it be that you could account for one listed airport's 2018 annual report, proudly noting that revenues from aeronautical services have increased by 52 per cent, whilst in the same period aircraft movements fell by 0.03 per cent? This is staggering to me," the Virgin Australia boss said.
"Another airport also told analysts that it would simply deal with subdued demand by increasing their prices. Wouldn't we love that luxury? We have the proof that, at many of the airports, the story is being replicated."
However, airports have accused the airlines of acting in their own self-interest, rather than looking out for passengers.
"In the last year alone, Qantas made more profit than the four major Australian airports combined," Australian Airports Association chief executive Caroline Wilkie said earlier, AAP reported.
"Qantas and Virgin want to squeeze competition out of the market to entrench the domestic duopoly and they know that's exactly what will happen if they turn the screws on airport investment."
Airlines are also calling for a new arbitration regime to allow disputes with airports to escalate faster, however a Productivity Commission draft report in May warned a change to the arbitration regime "would not consider the broader public interest".
"We think it would profoundly change the way in which contracts are negotiated between airports and airlines, disrupt investment and harm the community," the commission's report said.
Federal Treasurer Josh Frydenberg is expected to release the Productivity Commission report and the Government's response later this year.