Qantas has just revealed a post-coronavirus recovery plan, which will see the airline landing 100 planes for about 12 months (and in some cases even longer), and laying off about 6,000 employees.
Qantas Future Fleet Plans
Given that Australia is expected to remain closed to visitors from most countries throughout 2020 and beyond, Qantas has a bleak outlook on the recovery in travel demand. As a result, Qantas will significantly adjust its fleet. What should we expect?
- Qantas will land up to 100 aircraft for up to 12 months (some longer), including most of the international fleet; Most aircraft are expected to eventually return to service, but some leased aircraft may be returned upon expiration.
- Qantas will recall all six Boeing 747s immediately, six months ahead of schedule
- Deliveries of Airbus A321neo and Boeing 787-9 will be deferred
Even most of the Qantas 787 will be on the ground for quite some time
And then there is the A380 …
Could Qantas A380s never fly again?
Qantas notes that while most long-haul aircraft are expected to constantly return to service over time, there is great uncertainty about when flight levels will support the fleet of 12 Airbus A380s.
These aircraft will be inactive for the foreseeable future, “representing a significant percentage of their remaining useful life.”
The carrying amount of the A380 fleet, replacement engines, and replacement parts will be reduced to fair value, resulting in an estimated non-monetary impairment charge in fiscal year 2020. This represents the majority of the charge. for impairment of assets of AUD 1.25-1.4 billion.
Since Qantas has no plans to return the A380 to service in the coming years, one must wonder if the A380 will ever return to the airline. This is also the only aircraft in Qantas ‘fleet to have first class, so the end of the A380 would also mean the end of Qantas’ first class.
And to think that Qantas just spent tens of millions of dollars reconfiguring A380s with new cabins.
Qantas just outfitted some A380s with new cabins
Qantas is not alone in reconsidering the A380 as a result of the current pandemic. Air France withdrew its entire A380 fleet as a result of the current pandemic, and Lufthansa also does not plan to fly its A380 fleet in the coming years.
Qantas will lay off 6,000 employees
Qantas currently employs around 29,000 people. Of those:
- 8,000 are expected to return to work by the end of July 2020.
- 15,000 are expected to return to work by the end of December 2020
- 21,000 are expected to return to work by June 2022.
Therefore, the company is proposing layoffs for around 6,000 roles, while 15,000 employees will be temporarily managed through a combination of layoffs, annual vacations, and unpaid leave.
Qantas will begin consulting with unions, but the plan is for the layoffs to affect the following areas of Qantas and Jetstar:
- Non-operational: at least 1,450 job losses, mainly in corporate roles, due to less flight activity
- Ground operations: at least 1,500 airport job losses, baggage handling, fleet presentation and ramp operations due to reduced flight activity
- Cabin Crew: At least 1,050 job losses due to 747 early retirement and less flight activity; another 6,900 cabin crew will be on retreat from July 2020 onwards
- Engineering: at least 630 job losses due to 747 retirements, less flight activity (particularly from the wide body fleet) and redistribution of work from the Jetstar base in Newcastle to make better use of existing maintenance capacity in Melbourne
- Pilots: at least 220 job losses, mainly due to the early retirement of the 747; another 2,900 pilots will be in retreat from July 2020 onwards
6,000 Qantas employees will be laid off
Bottom line
Australia has more or less the coronavirus under control, and that is also largely due to disconnection from the outside world. While it’s good that life in Australia can return to normal, closed borders are not ideal for Qantas.
It is not surprising to see Qantas take such drastic measures, since most international travel is unlikely to be allowed any time soon.
Unfortunately, Qantas will lay off about 6,000 employees and also plans to keep 100 planes on the ground for about a year. Not only that, but there are no plans to put A380s back into service in the coming years, which surely makes you wonder if they will ever fly again.
What do you think of this Qantas development?
