The cuts announced Thursday represent 20% of Qantas’ total workforce of 29,000 people, according to the company. They will primarily affect the airline’s corporate, ground and flight personnel, while another 15,000 workers will remain without permission “until the flight returns,” he added. Jetstar, the company’s budget carrier, will also be affected.
The new measures are expected to help the company cut costs by A $ 15 billion ($ 10 billion) over three years. After that, it points to one billion Australian dollars (approximately $ 686,000) in recurring savings each year.
Qantas shares, which have fallen 41% this year, were suspended from trading in Sydney on Thursday when making the announcement. His fundraising plan will involve offering additional shares worth A $ 1.36 billion (about $ 933,000) to institutional investors, at a 13% discount on the closing share price on Wednesday.
The remaining $ 500 million will be sought through a separate stock sale plan offered to existing investors.
To lead the change strategy, CEO Alan Joyce also agreed to remain in office until the end of fiscal year 2023.
“Right now, all airlines are in the midst of the biggest crisis our industry has ever faced,” Joyce said in a statement. “The impact will be felt for a long time.”
However, the Australian Services Union argued on Thursday that it was “too early” for Qantas to cut jobs, and called on the airline and the federal government to protect workers’ wages.
“This Qantas announcement is premature,” the group said in a statement. “The Australian economy cannot afford a significant contraction in the aviation industry.”
Joyce said during the company announcement that “the crisis has left us with no other choice.”
“The collapse of billions of dollars in revenue leaves us little choice if we want to save as many jobs as possible, in the long term,” he said in his statement. “We have to position ourselves for several years where revenues will be much lower. And that means becoming a smaller airline in the short term.”
Blow of the travel sector
There’s a ray of hope: Australia’s domestic travel market is showing signs of life as closure restrictions are gradually lifted across the country. Qantas has said it is seeing a growing demand for travel within Australia: The company’s number of domestic passengers in the country doubled last week to 64,000 people.
Authorities in Australia are also expected to lift the closure of state borders next month, which Qantas hopes will help further boost local travel.
“Once that happens, we can get more of our people back to work,” said Joyce.