Qantas Airways Ltd said on Thursday that it is axing at least 20 percent of its workforce and plans to raise up to 1.9 billion Australian dollars ($1.3bn) of equity as part of drastic measures in response to the coronavirus crisis.
The Australian airline also said it would ground 100 aircraft for up to 12 months and some for longer, as well as retire its six remaining Boeing 747 planes immediately, six months ahead of schedule.
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“We have to position ourselves for several years when revenue will be much lower,” Qantas Chief Executive Alan Joyce said in a statement detailing a three-year plan that will cost one billion Australian dollars ($686m) to implement. “And this means becoming a much smaller airline in the short term.”
Along with other airlines around the world, Qantas is battling against a huge drop in demand after countries including Australia, closed their borders attempting to contain the global pandemic.
Australian officials have said the country is unlikely to open to international travellers until next year, although they will consider relaxing entry rules for students and other long-term visitors.
Qantas said it would cut at least 6,000 positions among its 29,000 employees, while another 15,000 staff would remain stood down temporarily, particularly those associated with international operations, until more flying returns.
The airline will take an impairment charge of up to 1.4 billion Australian dollars ($960m) associated mostly with its fleet of 12 Airbus A380 superjumbos given there is significant uncertainty as to when they will fly again.
Joyce has agreed to stay on as chief executive until at least June 2023 as part of the plan, the cost of which will mostly be logged in the year ending June 30, 2021.