Alan Joyce, CEO of Australia's struggling flag carrier, told CNBC he believes his job is safe, a day after Qantas announced a hefty pre-tax loss and plans to slash 5,000 jobs.

"I think what's important for the board [and] for the management is to have a plan to turn things around, be proactive and have the courage to implement that plan. I have the confidence of the board, I have the confidence of the shareholders - we are getting on with our plan," said Alan Joyce, CEO of Qantas on Friday.

(Read more: Australia's flying kangaroo slashes 5,000 jobs )

Shares tanked 9 percent on Thursday, are down near 40 percent since April and worth only half of what they were when Joyce took the helm in late 2008, while the airline's credit rating is now junk across the board.

As Qantas' losses stack up the pressure has increased on Joyce to resign. But Joyce defended his competence for the job to CNBC, and blamed recent struggles on the challenging environment.

"I've been CEO of the airline for 10 years. Nine out of 10 years I've reported profits. I think that's unique. Most airline CEOs don't have the luxury of doing that. This is tough year, but our competitors are losing a lot of money domestically. The environment with capacity and fuel prices is pretty bad," he added.

Qantas, which is Australia's largest airline, hit the headlines on Thursday after it announced a first-half underlying loss before tax of A$252 million ($224 million). It also unveiled a drastic cost-cutting regime, involving job losses, the sale of older aircraft and cuts in capital spending amidst growing competition.

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Joyce, who told CNBC the environment the airline was facing was the "most challenging it's ever faced," confirmed that he would be taking a pay cut himself this year.

"The board and myself are taking a pay cut... my salary this year will be 38 percent lower than last year, so everybody in the company is in same boat. Everybody in the company will take a pay freeze and will not be paid bonuses, and that will continue until the company makes money again," he added.

Qantas' dialogue with the Australian government has been in focus recently, after the airline asked Canberra for a debt guarantee.

Qantas has complained that rival airline Virgin has access to foreign funding, through its shareholders Gulf carrier Etihad, Singapore Airlines and Air New Zealand, putting the Australian flag carrier at a disadvantage. The Qantas Sales Act essentially prohibits foreign ownership of the airline and a state-backed loan.

The government is reluctant to hand cash out to struggling corporates and at the same time it faces opposition in parliament to making any changes to the Qantas Sales Act.

Joyce told CNBC that the Australian government understands their challenges and talks were ongoing.

(Read more: Who will fly to the help of Qantas? )

"We are in dialogue with the government about how we restore balance to domestic market and restore what we regard as a level playing field," said Joyce.

"They say our competitor has an unfair advantage [and] Qantas has a ball and chain and we have to fix it. So it's great, as the Prime Minister, the Deputy Prime Minister and Treasurer have said it," he added.

Joyce said he did not expect any union action in response to the job cuts this time round, in reference to the disputes seen in 2011, when Joyce grounded its entire fleet and locked out its staff in response to unions' industrial action over pay, conditions and the outsourcing of jobs overseas, ABC reported.

(Read more: Has the tide turned for corporate Australia? )

"I think the employees recognize Qantas is in the most significant challenging environment that it's ever faced... I firmly believe we're not going to get any issues with the employee groups, they know we have to take tough decisions. It's tough for everybody at Qantas at the moment," he said.

Qantas Airways recovered from a 9 percent slump to claw back 0.4 percent early Friday. Competitor Virgin Australia fell 1.5 percent, as a bruising price war with rival Qantas and its budget offshoot Jetstar took a toll on the company's earnings and it reported a $83.7 million first-half loss.

- By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie

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