Thursday, 19 March 2020 11:59

Qantas, Jetstar to stand down 20,000 workers due to coronavirus, Alan Joyce says national carrier's future is at stake

Qantas and Jetstar have announced that two-thirds of their 30,000 employees will be temporarily stood down from late March until at least the end of May.

The group will also suspend all international flights, after the Federal Government told all Australians to avoid international travel.

"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," Qantas CEO Alan Joyce said.

"This is having a devastating impact on all airlines.

"With the huge drop in revenue we're facing, we have to make difficult decisions to guarantee the future of the national carrier."

Some scheduled international Qantas flights will continue until late March to help people return home to Australia.

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More than 150 aircraft have been temporarily grounded, including all of Qantas's A380s, 747s and B787-9s and Jetstar's B787-8s.

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Discussions are progressing with airports and government about parking for these aircraft, Qantas said.

And essential domestic, regional and freight connections would be maintained where possible.

Senior management executives and the board have given up their salaries until at least the end of this financial year.

They will join the chairman Richard Goyder and Mr Joyce in taking no pay.

The payment of a $201 million shareholder dividend will be deferred until September.

Qantas in a fight for survival, Joyce says
Mr Joyce told reporters that despite the Federal Government's $715 million stimulus aimed at airlines, more aircraft and more people could be stood down.

Despite Government stimulus aimed at airlines, some industry experts want further action including relaxing foreign ownership rules.
Qantas will reassess its position in April.

"This is a fight and survival of the fittest, and we are the fittest," he said.

"I know a lot of airlines will go under — we won't because we're [taking] dramatic, drastic actions … to make sure the national carrier survives."

Mr Joyce said no airline in the world was immune to the impact, with a number of the world's leading carriers making deep cuts to flying schedules and jobs.

"We have one of the healthiest balance sheets out there and we will have plenty of liquidity to last a very, very long time," he said.

Mr Joyce said the airline had never faced such a position.

"This is a terrible day that we have to make these decisions," he said.

"I never thought as CEO I would have to stand down two-thirds of our people, and maybe more if this thing continues.

"These are the worst times we've ever seen in aviation. This is the biggest crisis aviation has ever gone through."

Alan Joyce seated, gesturing his hands, with Qantas logos behind him.

Pilots, cabin crew, baggage handlers, worst hit
Mr Joyce said with aircraft grounded, pilots, cabin crew, baggage handlers and workers within Qantas's lounges would be the staff worst-hit.

"The reality is we'll have 150 aircraft on the ground and sadly there's no work for most of our people," he said.

"This is a very hard set of circumstances for our people, as it is for lots of parts of the community right now."

While aircraft were being grounded, he said Qantas would help with expats wanting to return home and was also in discussions with the Federal Government about bringing freight on empty passenger aircraft.

Mr Joyce said that rather than losing highly skilled employees, the company decided that standing down two-thirds of its workers until at least the end of May was the best option.

All Qantas international lounges will close, and domestically the top-tier chairman's lounges will close, and business lounges will consolidate.

Mr Joyce said Woolworths chief executive Brad Banducci reached out to him and said he would love to connect Qantas customer services staff with jobs, since the retailer was short of staff to stock supermarket shelves that are constantly being stripped in panic buying.

He said any Qantas staff who took temporary work would not be putting their future employment at Qantas in jeopardy.

Mr Joyce has previously argued for changes to foreign ownership rules.

Currently, the Qantas Sale Act 1992 limits aggregate foreign ownership in an Australian international airline (including Qantas) to 49 per cent.

Asked whether he would be in favour of relaxing foreign ownership rules if the crisis worsens Mr Joyce said: "It is what it is.

"One of the things we're working on is making sure we're the last man standing," Mr Joyce said.

Qantas jet taxis through Sydney Airport.

Customers who have already booked flights with Qantas or Jetstar will receive travel credits valid for future use.

Affected customers will be contacted directly from next Monday.

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"Any customers travelling before the end of May who wish to change their booking are also eligible to receive a travel credit instead," Qantas said.

If flights were booked through a travel agency or third-party website, customers will need to contact the agency directly.

The airlines had already announced cuts to 90 per cent of international flights and about 60 per cent of domestic flights on Tuesday.

A middle-aged man talks to microphones with people behind him listening and holding placards.
PHOTO: TWU boss Michael Kaine predicted that Qantas executives would return to massive bonuses on the back of their workers' sacrifice. (AAP: Bianca De Marchi)
And on Wednesday, Virgin Australia said it was grounding its international fleet in response to the COVID-19 pandemic.

Union says Qantas forcing workers to bail it out
Transport Workers Union national secretary Michael Kaine said Qantas was forcing its workforce to bail it out, by standing them down and seizing future leave balances that were yet to be accrued.

"It means when the airline returns to profitability, its share price will soar and executives will return to massive bonuses on the back of workers sacrificing their entitlements," he said.

"The Qantas announcement today amounts to workers bailing out the airline."

Qantas responded to the statement, saying, if airlines kept paying workers when there was no work there would not be any airlines left to employ their members.

"The coronavirus is the biggest crisis to ever face global aviation, and the TWU would rather criticise the company and grandstand than work with us to weather the storm," a Qantas spokeswoman said.

(ABC)

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