(TAN): Qantas Group has outlined the customer and employee impact of a huge drop in travel demand triggered by the public health response to the Coronavirus crisis.
Earlier this week, cuts to 90 per cent of international flying and about 60 per cent of domestic flying were announced by Qantas and Jetstar. With the Federal Government now recommending against all overseas travel from Australia, regularly scheduled international flights will continue until late March to assist with repatriation and will then be suspended until at least the end of May 2020. As the national carrier, Qantas is in ongoing discussions with the Federal Government about continuation of some strategic links.
More than 150 aircraft will be temporarily grounded, including all of Qantas’ A380s, 747s and B787-9s and Jetstar’s B787-8s. Discussions are progressing with airports and government about parking for these aircraft.
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“The efforts to contain the spread of Coronavirus have led to a huge drop in travel demand, the likes of which we have never seen before. This is having a devastating impact on all airlines,” said Qantas Group CEO Alan Joyce. “With the huge drop in revenue we’re facing, we have to make difficult decisions to guarantee the future of the national carrier.”
Essential domestic, regional and freight connections will be maintained as much as possible.
Qantas’ fleet of freighters will continue to be fully utilised. Some domestic passenger aircraft will also be used for freight-only flights to replace lost capacity from regular scheduled services.
All regularly scheduled Qantas and Jetstar international flights from Australia will be suspended from end March until at least end May 2020. Some flights may continue in order to maintain key links, based on ongoing discussions with the Federal Government.
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Jetstar Asia (Singapore) will suspend all flights from 23 March to at least 15 April 2020. Jetstar Japan has suspended international flights and cut domestic flying. Jetstar Pacific (Vietnam) has suspended international flights and will significantly cut domestic flying.
The Group will maintain connectivity to almost all Australian domestic and regional destinations that Qantas, QantasLink and Jetstar currently operate to. The 60 per cent reduction in capacity will come mostly from a significant reduction in flight frequency, but also route suspensions and postponing a number of new route launches.
In order to preserve as many jobs as possible longer term, Qantas and Jetstar will stand down the majority of their 30,000 employees until at least the end of May 2020. During the stand down, employees will be able to draw down on annual and long service leave and additional support mechanisms will be introduced, including leave at half pay and early access to long service leave.
Senior Group Management Executives and the Board have increased their salary reductions from 30 per cent to 100 per cent until at least the end of this financial year, joining the Chairman and Group CEO in taking no pay.
“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people. Rather than lose these highly skilled employees who we’ll need when this crisis passes, we are instead standing down two-thirds of our 30,000 employees until at least the end of May,” Joyce added.
To avoid further inconvenience, Qantas Group is converting all bookings on cancelled flights to a travel credit, which can be used anywhere on the network. Affected customers will be contacted directly. Any customer travelling before the end of May who wish to change their booking are also eligible to receive a travel credit instead.
