Qantas CEO, Alan Joyce, has said that the airline will cut 6,000 jobs as it struggles to recover in a post-COVID aviation sector.
In addition, 15,000 Qantas employees will be stood down from the company without pay, with those employed in its international operations. With international air travel at all but a standstill, Qantas has been left with few other options.
Of that initial 6,000 count, it’s reported that 1,450 of these will be office roles, 1,500 ground operations staff – which includes baggage handlers – 1,050 cabin crew, 630 engineers and 220 pilots.
The announcement was made to the Australian Stock Exchange this morning, with Joyce adding that Qantas will ground 100 of its wide body passenger aircraft for a minimum of twelve months.
“Right now,” Joyce said, “all airlines are in the middle of the biggest crisis our industry has ever faced.”
“Airline revenues have collapsed, entire fleets have been grounded. And the world’s biggest carriers are taking extreme action just to survive.” Joyce added that the pandemic has hit Qantas “very hard,” and that “the impact will be felt for a long time.”
A fleet of 12 Airbus A380s will be grounded in the Mojave desert in the U.S. for three years.
In addition, Qantas will retire its Boeing 747 fleet six months ahead of their official retirement, and has postponed delivery of a number of Airbus A321neo and Boeing 787-9 jets.
Joyce, who has forgone his salary added that Qantas executives will not receive a bonus this year, and has asked them to take a 15% pay cut.
Qantas is aiming at reducing its operating costs by a remarkable $15 billion over the next three-years, and $1 billion each year thereafter. The airline is also hoping to raise $1.9 billion from investors, marking Qantas’ first equity raising offering in more than 10 years.
“Once we have recovered, this capital will help us take advantage of opportunities that emerge,” Joyce said.
Qantas has a 58.6% share of the domestic travel industry in Australia, and a 30.6% share of Australia’s international air travel market.
IBISWorld’s senior industry analyst, Tom Youl has told the ABC that Qantas is currently burning as much as $40 million per week, with its fleet grounded and no international travel market.
“Revenue for international airlines is expected to decline by a further 31.5 per cent in 2020-21, as international borders remain closed until a COVID-19 vaccine becomes widely available.”
Youl added that the domestic air travel market is set to shrink by 15% through 2019-20, and passenger numbers between major capital cities are set to drop 27.7% in 2019-20 and an additional 2.6% in 2020-21.