Michael Pascoe writes:
Cynical souls might think Qantas’s well-practised mix of blackmail and enticements has done the trick yet again in Canberra by keeping Singapore Airlines off its most profitable route, the Sydney-Los Angeles money machine.
same cynical souls and Roo-knockers might suggest that, given a choice
between the best interests of the Australian tourism industry on one
hand and Qantas shareholders and management on the other, the
government rolled over for Geoff Dixon and Margaret Jackson under the
weight of their threat to ship thousands of Qantas maintenance jobs
But the aforementioned souls should be ashamed of
such base thoughts. As CEO Geoff has told us, Qantas just can’t survive
when its main competitors are paying less for people doing the same
sort of job.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Which is why Crikey is here to help the Qantas
board and management keep the mighty Roo flying. We’ve done
painstaking, in-depth research to discover the area where Qantas
suffers its single biggest comparative cost disadvantage against its
key regional competitors: Qantas can make a massive proportional saving
by out-sourcing the CEO role to Asia. Or perhaps even the UK.
Geoff Dixon picked up $6.1 million from the Roo in 2004. His present contract
has an annual $2 million base salary, up to $1.2 million in short-term
potential bonus payments and more millions in long-term equity
Cathay Pacific’s annual report (and remember what
an expensive town HK can be) shows CEO Philip Chen was paid salary,
bonuses, allowances and retirement benefits totalling just A$1.6
million in 2004. I suspect Chen might well cop another hefty bonus from
Swire as well, but that would still leave him as a much cheaper
alternative than G Dixon.
Singapore Airlines is notoriously
tight-fisted behind the scenes, so it’s a safe bet CEO Chew Choon Seng
is paid less again than his Cathay equivalent. Chew reportedly is a
fella who serves guests instant coffee in paper cups when they visit
With the region’s big two accounted for, you can
forget what the CEOs of the likes of MAS, Thai and Garuda pick up and
we won’t bother with what China’s various airlines might pay.
Then there was this SMH report
last year on Willie Walsh taking over from Rod Eddington running
British Airways: BA said Mr Walsh’s salary would be on a par with Mr
Eddington’s 584,000 pound ($1.4 million) annual package.
strikes me as actually being too cheap – I suspect there are some
bonuses that would flow as well – but Qantas still looks like it’s
being ripped off.
So Qantas could add an immediate $4 million to
the bottom line by outsourcing its CEO. How many maintenance workers
would you have to sack to make the same saving?