28 Aug 2009

$1.2m bonus payment for Air NZ boss

4:33 pm on 28 August 2009

Air New Zealand chief executive Rob Fyfe's bonus payment for the year is set to rise despite the company's profit plummeting.

The company announced earlier this week its net after-tax profit has fallen 90% from $218 million to $21 million, reflecting a decline in passenger numbers and volatile fuel prices.

Underlying profit fell 19% to $118 million as the airline cut prices, and slashed costs and flights to cope with an 8% decline in passenger demand.

Though Mr Fyfe's salary is capped at $1.2 million, which is what it was in 2007, his performance incentive payment will rise to $1.2 million. He received a bonus of $287,000 last year.

Earlier this year, Mr Fyfe took a 20% pay cut as global markets deteriorated

He says the board's decision to pay performance incentives is based on how the company performed - no matter what the market conditions have been.