So Qantas shareholders had no dividend in the 2011 financial year, they have watched the share price fall 16% so far this calendar year, and now they will be told, if they can understand it, that CEO Alan Joyce received a 71% pay rise to $5 million.

And the airline's profit doubled in 2011 from the 2010 financial year to $249 million, but much of that was due not to a dramatic improvement from its airline business, but from its frequent flyers division which is now a major profit centre.

(It earned an "underlying" profit before tax of $342 million in the year out of a total underlying profit before tax for the entire airline of $552 million.)

So this is an airline that has pleaded poor mouth with its international business, which lost a claimed $200 million, wants to cut 1,000 jobs, and is fighting with its unions (in many cases with complete justification).

The Qantas annual report released yesterday reveals Mr Joyce earned a total of $5 million for the year to June 30, compared with $2.9 million a year earlier.

Mr Joyce's latest package includes $2.04 million in fixed pay and $2.2 million in short-term benefits.

The report reveals that all the management group received a boost to their total pay in the year.

Jetstar's chief executive Bruce Buchanan received a total package of $1.4 million, compared with $1.1 million a year earlier, while Qantas's operations chief Lyell Strambi saw his pay rise from $1.2 million to $1.7 million.

The second-highest paid executive was Rob Kella, Qantas's former chief risk officer who officially left the airline on July 1 ''as a mutually agreed termination''.

The report shows that his pay package for the year totalled almost $1.8 million, compared with $1.26 million in 2009-10. Mr Kella did not receive a termination payment or a payment in lieu of notice.

The pay of the airline's ten non-executive directors rose to $2.535 million from $2.462 million.

Chairman Leigh Clifford wasn't upbeat about the outlook for the company and airlines.

"The general operating environment is challenging and extremely volatile.

"Capacity and yield are expected to increase in the first half of 2011/2012, but fuel costs will also grow.

"Fuel surcharges, fare increases and hedging are unlikely to fully offset this cost increase.

"With considerable uncertainty in global economic conditions, fuel prices, foreign exchange rates and the industrial relations environment, it is vital that the Group continues to manage capital effectively.

"The Group is embarking on a strategic renewal program that is essential to ongoing growth and success, and must allocate capital to business areas that deliver sustainable returns in order to maintain earnings and profitability."

The chairman of the airline's remuneration committee James Strong (a former CEO) said in the annual report that the board had achieved ''what we believe is an appropriate mix of fair reward, retention of key executives and alignment with the interests of the shareholders of Qantas''.

''This has been a year where company performance has been good relative to the challenges faced, and where a strong performance by management has produced what is, in the circumstances, a satisfactory profit outcome,'' he said.

But while there was joy for management, nothing for shareholders, the chairman repeating comments from the profit report last month:

"The Board considered it prudent not to pay an interim or final dividend in 2010/2011, and will review the potential for future dividends against the Group's funding requirements, the need to maintain an investment-grade credit rating and overall operating conditions."

The airline's share price rose 3c to $1.59 yesterday.

Copyright Australasian Investment Review.
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