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Qantas restructures, cuts 6,000, jet deferrals, hunts for $2bn capital
Australia’s national carrier Qantas is set to lay off some 6,000 employees amounting to 20 per cent of its entire workforce, including over 200 pilots and more than 1,000 cabin crew, according to a three year recovery plan published on Thursday.
Qantas is restructuring its workforce and looking to raise up to $1.9 billion of equity in order to recover from the coronavirus crisis, which has caused the airline to ground around 100 aircraft for a year and cancel all but a handful of international flights until October.
15,000 employees are being stood down until flights return and the Australian carrier is deferring deliveries on new A321neos and Boeing 787-9s. Qantas is also retiring six 747s six months ahead of schedule as part of the plan, which aims to reduce costs by $15 billion over three years
“We have to position ourselves for several years where revenue will be much lower. And that means becoming a smaller airline in the short term,” said Alan Joyce, Qantas’ CEO.
But Joyce added that he was optimistic in the domestic market, which made up two-thirds of Qantas’ pre-crisis earnings.
“We still have big ambitions for long-haul international flights, which will have even more potential on the other side of this,” he said in reference to the airline’s ultra-long-haul programme, Project Sunrise, which was postponed earlier this year because of coronavirus.
Of the group’s 29,000 people, around 8,000 are expected to have returned to work by the end of July. It is anticipated that this will increase to around 15,000 by the end of 2020, reaching 21,000 active employees by June 2022.
On top of 1,050 cabin crew and 220 pilots, Qantas will make 1,400 non-operational staff redundant, 1,500 ground operations staff and 630 engineers.
Joyce said airlines are currently “in the middle of the biggest crisis the industry has ever faced”.
“We have announced an equity raising for the first time in a decade – which follows a long period of returning significant capital to shareholders. The proceeds from the raising – up to $1.9 billion – will strengthen our balance sheet and accelerate our recovery,” he said.
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