The Qantas Group this morning announced it would suspend two-thirds of its 30,000 staff and cancel all international flights from late March.
The unprecedented announcement is the most dramatic in the airline’s 100-year history, and follows the Prime Minister’s advice on Wednesday discouraging all international travel for all Australians.
Read more below and click the links to see our in-depth coverage:
- Chief executive Alan Joyce tells suspended workers they might be able to work at Woolworths.
- The Transport and Workers Union accused Qantas of asking its employees to bail out the airline by facing a choice between taking leave balances or going without pay.
- In-full: every route and flight suspension and reduction revealed across Qantas mainline and regional network, plus Jetstar domestic and New Zealand.
- Shares in Qantas slumped to just $2.26 – a five-year low.
Early on Thursday, the airline announced Qantas and Jetstar would suspend two-thirds of its 30,000 employees until “at least” the end of May.
During what the business is terming a “stand down”, employees will be able to:
- Drawdown annual and long-service leave;
- Take leave at half pay;
- Have early access to long-service leave;
- If their leave balances are low, they can have access to four weeks leave in advance of accruing it; and
- Access ‘additional support mechanisms’.
With the federal government raising travel advice to level 4, advising no Australians to leave the country, Qantas has decided to suspend all international travel.
Flights will continue until late March to assist with “repatriation” and will then be suspended until at least the end of May 2020.
More than 150 aircraft will be temporarily grounded, including all of Qantas’ Airbus A380s, Boeing 747s and 787-9s, and Jetstar’s Boeing 787-8s.
The airline is currently in discussions with airports about parking the aircraft. Domestic, regional and freight connections will be maintained “as much as possible”, with some passengers planes used for freight, too.
The network changes are outlined in full by Australian Aviation here. However, in brief:
- All regularly scheduled Qantas and Jetstar international flights from Australia will be suspended from the end of March until at least the end of May 2020. Some flights may continue to maintain key links, based on ongoing discussions with the federal government;
- Jetstar Asia (Singapore) will suspend all flights from 23 March to at least 15 April 2020;
- Jetstar Japan has suspended international flights and cut domestic flying; and
- Jetstar Pacific (Vietnam) has suspended international flights and will significantly cut domestic flying.
Qantas has pledged it will maintain routes to almost all Australian domestic and regional destinations that Qantas, Jetstar and QantasLink operate to. The 60 per cent reduction in capacity will predominately come from a reduction in flight frequency, rather than cancellations of routes outright, the business said.
Senior management executives and the whole board have joined Joyce in going without pay until the end of the financial year. All management bonuses have been cancelled.
Payments of the shareholder dividend announced on 20 February will be delayed from 9 April to 1 September, in addition to the cancellation of the off-market buyback.
At midday on Thursday, shares were trading at $2.26 – a five-year low. Shares were trading at $7.32 in December 2019.
Joyce released a sombre statement announcing the news.
He said, “The efforts to contain the spread of coronavirus have led to a huge drop in travel demand, the likes of which we have never seen before. This is having a devastating impact on all airlines.
“We’re in a strong financial position right now, but our wages bill is more than $4 billion a year. With the huge drop in revenue we’re facing, we have to make difficult decisions to guarantee the future of the national carrier.
“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people. Rather than lose these highly skilled employees who we’ll need when this crisis passes, we are instead standing down two-thirds of our 30,000 employees until at least the end of May.
“Most of our people will be using various types of paid leave during this time, and we’ll have a number of support options in place. We’re also talking to our partners like Woolworths about temporary job opportunities for our people.
“This is a very hard set of circumstances for our people, as it is for lots of parts of the community right now.
“No airline in the world is immune to this, with the world’s leading carriers making deep cuts to flying schedules and jobs. Our strong balance sheet means we’ve entered this crisis in better shape than most and we’re taking action to make sure we can ride this out.
“Since this crisis started, there has been overwhelming support from our customers. That gives me even more confidence that we’ll get through this.”