Recruiting in China

China Southern Airlines Co., the nation's largest carrier, will cut the pay of Chairman Liu Shaoyong and other executives by 10 percent from this month to help offset jet-fuel costs that have almost doubled in a year.

The move is part of a plan to save 1.3 billion yuan ($191 million) this year by cutting operating costs and infrastructure investments, the Guangzhou-based carrier said in an e-mailed statement last night.

China Southern, Air China Ltd. and China Eastern Airlines Corp. have raised surcharges and trimmed capacity to cope with rising fuel prices and slower travel growth. Higher fuel costs will boost China Southern's operating costs by 1.9 billion yuan this year, it said.

``The salary cuts are a symbolic move to show the management's efforts to reduce costs,'' said Yu Jianjun, an analyst at Huatai Securities Co. ``The carriers will do everything they can as jet-fuel prices have run out of control.''

Liu was paid 751,000 yuan ($110,000) last year, including pension contributions, according to the company's annual report. Tony Tyler, chief executive officer of Cathay Pacific Airways Ltd., got a total of HK$11 million ($1.4 million), including benefits and bonuses.

Qantas Airways Ltd. CEO Geoffrey Dixon said today Australia's largest airline will freeze executive pay and cut about 20 percent of management and head office support jobs to curb expenses. Qantas also said it will cut 1,500 jobs.

``It's rare for Chinese company officials to cut their own pay,'' Yu said. ``It's a clear gesture saying they're trying their best to cut costs.''

Surcharges

China Southern rose 8.7 percent to 8.16 yuan in Shanghai and fell 1.9 percent to HK$3.18 in Hong Kong. Both stocks have plunged more than 68 percent this year, amid concerns that rising fuel prices may damp earnings.

Jet fuel last year accounted for 35 percent of operating costs at China Southern and China Eastern. Fuel was 36 percent of Air China's costs.

China Southern raised surcharges on domestic flights as much as 50 percent on July 1 to help cover higher fuel prices. It also increased its levies on flights to Southeast Asia and other short-haul overseas destinations.

The Chinese government raised fuel prices 25 percent last month as part of a wider plan aimed at cutting energy consumption and cooling the nation's economy. Chinese carriers buy fuel for domestic services at a subsidized rate. They pay international market prices for overseas routes.

Jet kerosene traded at $166.15 a barrel in Singapore yesterday, down from a record $181.85 a barrel on July 3.