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- Australia’s biggest airline will now slash international flights by 90 per cent
- Qantas Airways (QAN) made the call to cut flights in the wake of faltering demand triggered by the Covid-19 pandemic
- The Qantas Group says the cut will remain in play until at least the end of May
- The announcement follows Qantas’ pledge last week to reduce international flights by 23 per cent up until the end of FY20
- Today’s news also saw the group can 60 per cent of its domestic flights
- Roughly 150 aircraft will be grounded, and the group says the effects will be felt “across its entire workforce” of 30,000 people
- Additionally, the group says cuts already implemented are likely to increase through to mid-September
- The new reductions will come into effect from the end of March
- On the market today, Qantas is down 4.3 per cent and is trading at $2.89 apiece
Australia’s biggest airline, Qantas Airways (QAN), will cut international flights by 90 per cent in lieu of the Covid-19 pandemic.
The announcement follows a 23 per cent reduction in international flights until the end of FY20, announced last week. Qantas says this decision demonstrates the impact of severe quarantine requirements on people’s ability to travel overseas.
The Group’s domestic branches are set to cut domestic flights as well. Interstate flights will now be slashed by 60 per cent — a major increase from the 5 per cent reduction announced for the fourth quarter of the 2020 financial year.
These reductions represent the grounding of 150 aircraft, including almost all of its wide-body fleet.
Qantas is expecting these reductions to remain in place until May 2020. Cuts are also in play from the end of May through to mid-September and are likely to be increased.
“The route-by-route detail of these changes across Qantas and Jetstar is currently being worked through and will be announced in coming days,” the company told the market.
The decline in flights means that the Qantas Group is confronted with a significant labour surplus across its operations.
Travel demand is unlikely to rebound for months and the impact will be felt across Qanta’s 30,000-strong workforce.
“The Qantas Group is working to manage this impact as much as possible, including through the use of paid and unpaid leave,” the Group said.
In addition, the CEO and Chairman will sacrifice up to three months pay to help save the business. There have also been significant pay cuts for the Group Executive Management and Board members, as well as cancelling annual bonuses and an off-market buyback.
In this pandemic, Qantas has understood that travel plans will be suspended and has put in place a wide-ranging booking waiver for its customers.
On the market today, Qantas is down 4.30 per cent and is trading at $2.89 apiece at 11:31 am AEDT.
