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- The coronavirus scare has shaken global businesses, with Australia’s Qantas Airways (QAN) the latest to announce its plans to save money
- Announced on Thursday, the airline will cut flights to Asia by 15 per cent until at least the end of May
- Qantas Chief Alan Joyce said the plan was a move to save the airline from a business hit that could cost anywhere from $100 million, to $150 million
- Several other routes within Asia will also be slashed, with subsidiary Jetstar to undergo its own growing pains to save cash
- Shares in Qantas Airways on the Australian market gained 5.87 per cent on Thursday — closing at $6.67 per share.
Australia’s Qantas Airways (QAN) will be slashing its volume of flights to Asia: a business move to save hundreds of millions of dollars from the Coronavirus.
According to Qantas on Thursday, the business plan is to soften the blow from the health scare that could cost anywhere from $100 million, to $150 million.
Overall capacity of flights to Asia will be reduced by 15 per cent until at least the end of May this year. Global flights for Qantas will reportedly take a 16 per cent hit as well. Qantas subsidiary Jetstar will expect a 14 per cent cut on flights to Asia.
“Coronavirus resulted in the suspension of our flights to mainland China and we’re now seeing some secondary impacts with weaker demand on Hong Kong, Singapore and to a lesser extent Japan,” Qantas Group Chief Executive Alan Joyce said on Thursday.
“We’ve also seen some domestic demand weakness emerging, so we’re adjusting Qantas and Jetstar’s capacity in the second half [of 2020].”
Qantas flights from Sydney to Shanghai will remain suspended. Flights to Hong Kong from Sydney, a popular route, will be cut in half to just seven flights a week.
Jetstar flights to Thailand, Japan, and several other Asian destinations will also be reduced.
In saving grace for Qantas, lowered fuel prices in recent months will help soften the blow of the Coronavirus on global business.
“What’s important is that we have flexibility in how we respond to Coronavirus and how we maintain our strategic position more broadly,” Alan Joyce continued.
“This is an evolving situation that we’re monitoring closely.”
The reduced flights decision by Qantas is expected to impede work for up to 700 of its full-time staff.
“These past few months have been extraordinarily difficult for the tourism industry and we’ve tried to minimise the impact of our capacity reductions as much as possible,” Alan said.
“To avoid job losses we’ll be using leave balances across our workforce of 30,000 and freezing recruitment to help ride this out.”
Qantas boss Alan Joyce’s Coronavirus response plan was announced today while the company was wrapped up in financial year updates.
The first half of the business period has seen Qantas profits drop 3.9 per cent to $443 million.
Shareholders loyal to Qantas will still receive a dividend of 13.5 cents per share, while the Aussie airline has announced a share buyback scheme worth $150 million.
“We know demand into Asia will rebound. And we’ll be ready to ramp back up when it does,” Alan said.
Shares in Qantas Airways on the Australian market gained 5.87 per cent on Thursday — closing at $6.67 per share.
