Australia’s flag carrier, including Jetstar, has been hit hard by domestic and international flight shutdowns and said it will ground at least 100 aircraft for up to 12 months and cut $15 billion in costs over the next three years.
“We have to position ourselves for several years where revenue will be much lower. And that means becoming a smaller airline in the short term,” Qantas Group CEO Alan Joyce said.
“Most airlines will have to restructure in order to survive, which also means they’ll come through this leaner and more competitive. For all these reasons, we have to take action now.”
Qantas has been operating around domestic capacity at just five per cent of pre-coronavirus levels and is set to scale this up to 15 per cent following an easing in coronavirus-related social and travel restrictions.
It has cancelled all international flights, except for services to New Zealand, until late October.
The airline in March stood down two-thirds of its workforce.
On Thursday, it said around 8,000 of the group’s 29,000 staff are expected to return to work by the end of July.
This will likely increase to around 15,000 by the end of 2020 in line with the opening up of domestic flying, and increase further during calendar 2021 and 2022 as the international network returns to reach 21,000 active employees by June 2022.
Redundancies will be made to manage a surplus of around 6,000 roles, with the temporary surplus of around 15,000 managed through a mix of stand down, annual leave and leave without pay.
Staff will return to work as travel restrictions lift and flying resumes, Qantas said.
This will allow the group to preserve as many jobs as possible for the longer term and respond faster if recovery timelines improve.
Joyce confirmed he had discussed support measures with Prime Minister Scott Morrison and Treasurer Josh Frydenberg ahead of JobKeeper wage subsidies ending in September.
“It does help for them to know the size of the Qantas issue, what we think is going to happen to inform them on the decision they’re making on JobKeeper and alternatives,” he said.
He defended the decision to sack workers while JobKeeper is under review, saying employees needed clarity.
“The prime minister and treasurer have said there are some industries that are more affected than others,” Joyce said.
He had been talking to state governments about reopening borders for domestic travel and was hopeful the border with New Zealand can open before July next year, but understood it would depend on health advice.
“We are very keen for the borders to be open… we will continue to talk to the states,” he said.
Qantas said it expected to axe 220 pilots and 1050 cabin crew, as well as 1,450 jobs non-operational roles, mainly corporate, along with 1,500 in ground operations, such as baggage handling and ramp operations, and 630 in engineering operations.
The airline will ground around 100 aircraft for up to 12 months or longer and retire its six remaining Boeing 747s, six months ahead of schedule.
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