Qantas asks staff to take leave to beat coronavirus downturn

written by Adam Thorn | February 20, 2020

Qantas chief executive Alan Joyce will ask staff to take annual leave to alleviate the downturn caused by the coronavirus outbreak.

The news comes after the airline announced it would both reduce capacity and cut flights to Asia that will amount to the equivalent of grounding 18 flights.

He made the off-the-cuff remarks after stating he believes the virus – since renamed COVID-19 by the World Health Organisation – would carve out up to $150 million from its earnings this year.

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Qantas chief executive Alan Joyce at the airline group’s 2019 annual general meeting in Adelaide.

Joyce told reporters, “The way we’ll manage it is to ask across the 30,000 [staff], for people to take annual leave, long-service leave and use their leave balances, which are quite considerable.”

Qantas announced on Wednesday that it would reduce overall capacity to Asia by 15 per cent until at least the end of May, cut international capacity by 16 per cent, and cut Jetstar seats to the region by a further 14 per cent.

Flights between Sydney and Shanghai will remain suspended, Joyce said, while the popular route between Hong Kong and Sydney will be halved from 14 trips a week to just seven.

Meanwhile, flights from Melbourne and Brisbane will be axed, as will Jetstar flights to Japan and Thailand.

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Jetstar flights between Australia and New Zealand will also be reduced by around 5 per cent, and the group’s domestic capacity will go down by 2.3 per cent in the second half of the year.

Joyce said, “Coronavirus resulted in the suspension of flights to mainland China, and we’re now seeing some secondary impacts and weaker demand on Hong Kong, Singapore and to a lesser extent Japan.

“What’s important is that we have flexibility in how we respond to coronavirus and how we maintain our strategic position more broadly.”

He added that the underlying profit from the first half of the financial year was $771 million, down just $4 million from last year, despite higher foreign exchange costs and the impact from unrest in Hong Kong.

Trade Minister Simon Birmingham said the decision to cut capacity was “disappointing but understandable”.

He said, “I welcome the decision by Qantas to keep all of their routes across Asia and within their domestic network open, and that these temporary reductions in capacity will not result in any job losses.”

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