Australia's national carrier Qantas announced that it will cut 6,000 jobs and looks to raise 1.9 billion Australian dollars (approx. $1.30billion) as the airline fights to survive the coronavirus pandemic.
The cuts will initially affect the company’s ground staff, corporate staff and its flight staff. The remaining staff will remain on furlough until flying resumes. The cuts will also affect Jetstar, the company’s budget carrier.
These measures are expected to reduce the company’s expense by 15 billion Australian dollars (approx. $10.29 billion) over three years. Besides making personnel changes, the airline is also drafting a broader three-year-plan to help its business recover from the slump.
Most of the carrier's international aircraft—or up to 100 planes—will stay grounded for a year, a CNN report says. Its six Boeing 747 jumbo jets are also being retired six months ahead of schedule. Qantas shares were halted from trading in Sydney as the announcement was made on Thursday. The shares have dropped by 41 per cent this year.
The company’s fundraising plan involves offering shares worth 1.36 billion Australian dollars to institutional investors, at about a 13 per cent discount to the stock's closing price as of Wednesday. The remaining $500 million will be sought through a separate share sale plan offered to current investors.
Virgin Airlines, owned by Richard Branson, Qantas’ rival airline is also battling the economic slump and filed for voluntary administration after failing to receive the government support it asked for. It is also fielding bids from parties to take part in its restructuring and eventual sale.
Qantas’ chief executive Alan Joyce said that the economic setback could last longer than expected.
“We’re having good discussions with the government about possibly extending job keeper, or some other form of support, for those in the aviation industry who will be stood down for an extended period,” Joyce was quoted as saying in a Guardian report.
According to the National Secretary of the Transport Workers’ Union, Michael Kaine, both Qantas and the Australian government headed by Scott Morrison which has repeatedly rebuffed the TWU’s calls for a bailout of the aviation industry, were to blame for the job losses.
This year, senior executives took a pay cut of 15 per cent and no bonuses were paid.
