Mike Hosking on coronavirus: Why are Air NZ and Qantas bosses taking pay cuts - the outbreak isn't their fault

New Air New Zealand chief executive Greg Foran.

COMMENT:

Oh dear, is Greg Foran feeling bad this morning?

Foran, who's been running Air New Zealand for about five minutes (and as far as I can work out has spent the opening days cleaning planes and taking a pay cut) must be wondering if his luck has turned.

There he was at Walmart living the American dream when the chance to run a smallish airline back home came up. So he takes a massive pay cut, arrives, watches Covid-19 arrive on the next flight, and next thing you know he's coughed up quarter of a million dollars in salary to, well what actually is that designed to do?

Whatever it is Alan Joyce, who runs a slightly larger airline called Qantas across the Tasman, clearly saw the gesture and has upped it. He's given up his salary for the rest of the financial year, and he's on millions, and many of them.

Back to the question: just what does a boss giving up income do?

The virus is no one's fault. It's certainly not Air New Zealand's. Nor is it the fault of Qantas. So in a world where CEOs are held to account not only socially, morally, legally, but also financially, why are they penalising themselves for something beyond their control?

Obviously it's a gesture, a team building exercise. Maybe it's to negate that time-honoured obsession some have towards those who earn large pay packets? That if it really hits the fan, is it right the top person earns millions while a bunch at the bottom get laid off?

There is no doubt airlines are at the sharp end of the virus, they face the harshest of realities. One, it's perfectly safe to fly, yet lots don't believe it. Two, even if you do believe it, you're limited in where you can go.

But, given we are all in this together, it is the practical stuff that will get us through. The likes of being realistic about the disease and the chances of getting it, realising panic buying is for idiots, and realising that Asian restaurants can still be eaten at.

Giving up a chunk of your wage strikes me as impractical. It doesn't solve anything, it doesn't pay for anything, and it's not like Alan Joyce can keep an extra Sydney to Hong Kong flight on because he's not getting paid.

And the last person in doesn't get to hold their job for the rest of the year because Greg Foran took a pay cut. Unless they know that everyone is taking a 15 per cent cut and they're just not saying yet.

Which brings up another point as we wait for the Government to actually detail the rescue package. Air New Zealand, along with most NZ corporates, should be able to weather this thing without any real drama. They are profitable, have had at least a decade of rare success, and if you tip up over one bad year, you've not been running your business properly.

This is why the Government won't be helping them, and nor should they.

Yes, these are tough days, but they're not fatal days or anywhere close - so maybe less of the dramatic gesture?