Curb on executive pay and bonuses would be fair, says head of global aviation body as airlines seek billions in bailouts amid coronavirus shutdown

Alexandre de Juniac, the International Air Transport Association chief, admits governments are right to rein in bonuses, buy-backs and executive pay

But he warns help is needed urgently, saying: ‘We are running out of cash. Every day we are bleeding.’

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American Airlines passenger planes crowd a runway where they are parked due to flight reductions to slow the spread of Covid-19, at Tulsa International Airport in Tulsa, Oklahoma, US. Photo: Reuters

Published: 2:30pm, 24 Mar 2020Updated: 12:02am, 6 Apr 2020

A leading figure in the global aviation industry has said any curbs on executive pay and bonuses imposed as part government bailouts would be fair, and admitted the billions of dollars airlines had previously spent on share buy-backs “doesn’t look appropriate”.

The acknowledgement came as carriers were warned to expect a much bigger hit to passenger revenue due to the coronavirus outbreak than was predicted just two weeks ago, underscoring the market chaos the industry now faced.

For years, some airlines have focused on spending profits rather than building up cash war chests, a practice that can leave them exposed to a sudden interruption in business. Many are now desperate for government help to remain afloat, underlining the need to get state-aid to companies urgently.

Commenting on the common practices within the industry, Alexandre de Juniac, the head of the International Air Transport Association (IATA), said he was not surprised governments might ask conditions be placed on any rescue packages.

“We are not surprised that governments and parliaments may ask for ... conditions [that] are not totally unrealistic or out of control,” said de Juniac, in an exclusive interview with the Post.

Alexandre de Juniac, the head of the International Air Transport Association. Photo: Reuters

“Looking at past share buy-backs, it doesn’t look appropriate. When you think about refraining from lay-offs or reducing bonuses, that is something you can understand.”

The association’s chief economist warned on Tuesday that airlines would see passenger revenue fall US$252 billion due to the outbreak, leaving the industry down 44 per cent on last year’s total. The prognosis two weeks ago was for carriers to prepare for a US$113 billion hit.