Qantas (QAN.AX) will ground all international flights and stand down the majority of its 30,000 employees until the end of May at the earliest as the carrier battles Covid-19’s devastating effects.
Two-thirds of the company’s employees will be temporarily stood down and take paid or unpaid leave, with the company saying the move is to try to preserve as many jobs as possible.
The airline is cutting all international flights from late March, after it recently announced 90 per cent of international flights would be suspended.
Jetstar Asia will also suspend all flights from 23 March to at least 15 April, while Jetstar Japan has suspended international flights and Jetstar Pacific has suspended international flights.
Qantas will reduce domestic flights by 60 per cent.
All up, 150 planes will be temporarily grounded.
20,000 stood down: Here’s what they’re entitled to
Around 20,000 stood-down employees will be able to access annual leave, leave at half-pay, and will also be able to draw down on long service leave early.
Staff with low leave balances will have access to up to four weeks of annual leave before earning it. However, Qantas said unpaid leave is also inevitable for some employees.
“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people. Rather than lose these highly skilled employees who we’ll need when this crisis passes, we are instead standing down two-thirds of our 30,000 employees until at least the end of May,” CEO Alan Joyce said.
“Most of our people will be using various types of paid leave during this time, and we’ll have a number of support options in place. We’re also talking to our partners like Woolworths about temporary job opportunities for our people.”
Senior management won’t be paid
Senior group management executives and the board will not receive a salary until at least the end of the financial year, after CEO Alan Joyce and the Qantas chairman announced they would not take a salary.
Management bonuses have also been canned.
International traffic at a near-standstill
As Covid-19 spreads throughout the globe, countries are closing borders. Australia’s Department of Foreign Affairs and Trade has advised all Australian travellers return home as soon as possible and has also increased the travel warning to the highest level its ever been, warning against all international travel.
Now, both Virgin Australia and Qantas have suspended all international travel.
The Centre for Aviation (CAPA) earlier this week warned most world airlines could be bankrupt by the end of May unless governments take drastic measures to protect them.
“As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants,” CAPA said.
“Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full.”
CAPA said governments around the world need to cooperate to save the aviation industry.
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