Qantas to slash 6000 jobs in response to COVID pandemic

Taking off for overseas? Better get a COVID jab first, Alan Joyce says.

Taking off for overseas? Better get a COVID jab first, Alan Joyce says.

Qantas is to sack at least 6000 workers across all parts of the business and extend the stand down for a further 15,000 employees.

Australia’s flag carrier said it will also ground at least 100 aircraft for up to 12 months and reduce $15 billion in costs in the next three years.

Prime Minister Scott Morrison raised the prospect of ongoing targeted support for aviation after the cuts were announced.

The ailing airline’s boss Alan Joyce has been in discussions with the Mr Morrison and Treasurer Josh Frydenberg over further support packages.

The airline group revealed the moves in an announcement to the ASX on Thursday, along with notice of an intention to raise $1.9 billion to strengthen its balance sheet.

“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,” Mr 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.”

Mr Morrison said aviation was a sector that would need continued support with JobKeeper wage subsidies and other coronavirus support measures to end in September.

“We are just working through the best way to target and deliver that support,” he said on Thursday.

He said “JobKeeper or other measures” could be used to help the sector in the future.

Mr Morrison praised Qantas for navigating the crisis despite the latest job losses.

The company has been hit hard by the closure of international travel and state border restrictions.

Many of the 6000 people who will lose their jobs have spent decades with the airline and its budget carrier, Jetstar.

“It’s not unusual to have several members of the one family working at Qantas and Jetstar,” Mr Joyce said.

“What makes this even harder, is that right before the crisis hit, we were actively recruiting. We were … getting ready to buy planes. Now we’re facing a sudden reversal of fortunes that is no one’s fault but is very hard to accept.”

Mr Joyce confirmed he had discussed support measures with Mr Morrison and Mr Frydenberg.

“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 told reporters on Thursday.

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,” Mr Joyce said.

The redundancies, which will initially be voluntary, will come from all areas of the group – head office, ground and cabin crew. Workers in Qantas’ international business are expected to be hardest hit.

Qantas stood down 20,000 of its 29,000 workers in the early days of the coronavirus pandemic. On Thursday, it said about 8000 staff were expected to return to work by the end of July.

“Around half of those stood down will be back flying domestically, we think, by the end of the year,” Mr Joyce said.

“The remainder – mostly those supporting international flying – will return more slowly.”

Qantas is talking with the federal government about extending JobKeeper support for the workers who will be stood down for longest. Mr Joyce said the COVID wages subsidy had been a vital support for the company.

Since the coronavirus pandemic hit, the airline has operated at just 5 per cent of the capacity of its previous levels. It has also cancelled all international flights, except for services to New Zealand, until late October.

Three weeks ago, Qantas said it would boost its domestic capacity up to 40 per cent of pre-COVID levels by the end of July.

It said capacity on its domestic and regional routes, and those of budget carrier Jetstar, would rise to 15 per cent of pre-coronavirus levels – a jump of more than 300 return flights a week – by the end of June. Further increases will depend on state government border decisions.

Qantas said about 100 of its aircraft would be grounded for up to 12 months, with some for longer.

The airline will permanently retire its remaining six Boeing 747 aircraft six months early, and defer deliveries of new Airbuses and Boeings.

The majority of the world’s airlines have been hit hard by travel restrictions and mass groundings due to COVID. Mr Joyce said the industry was used to shocks, but had never seen anything like the pandemic.

“Right now all airlines are in the middle of the biggest crisis our industry has ever faced,” he said.

“Airline revenues have collapsed, entire fleets have been grounded. And the world’s biggest carriers are taking extreme action just to survive.”

Qantas also said on Thursday it would raise $1.9 billion through a share sale.

This will comprise a $1.4 billion institutional placement and another $500 million to be raised through a share purchase plan for retail investors.

Qantas shares have been placed in a trading halt ahead of the share sale.

Topics: Qantas
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