The avalanche of job cuts in the global aviation industry continues as Australian flag carrier Qantas will cut a fifth of its pre-pandemic laborforce as part of its plan to survive.
Earlier today, the Australian airline announced a three-year strategy to guide recovery and return to growth. The company is eyeing a reduction in cost by $15B during a three-year period of lower activity, and $1B in ongoing cost savings per annum from the Fiscal Year 2023.
“Today, we’re announcing a three-year plan to guide our recovery and take us through to better days ahead. It’s a plan I’ve agreed to stay on as Group CEO to see through. The plan has three immediate actions to safeguard the national carrier’s future – and, the majority of jobs it supports,” according to Qantas Group CEO Alan Joyce.
The airline also said that 100 aircraft will be grounded for up to 12 months (even longer for some), and job losses plus extended stand-downs will be made to manage a long period of reduced flying (especially internationally).
“The first is to rightsize our workforce, fleet, and capital spending for a world that has less flying for an extended period. The second is restructuring to deliver ongoing savings across the Group’s operations in a changed market. And the third is recapitalizing through an equity raise that will strengthen our balance sheet and accelerate our recovery,” Joyce added.
The plan is designed to account for the uncertainty associated with the crisis, preserving as many key assets and skills as the airline group can reasonably carry to support the eventual recovery. COVID-19 represents the biggest challenge ever faced by global aviation and the Group’s response to the crisis is scaled accordingly. This unfortunately means a large number of job losses across Qantas and Jetstar.
“As a business, recapitalizing means we can get ready sooner for new opportunities, returning to profit and building long term shareholder value. As the national carrier, we remain committed to supporting tourism, connecting regional communities, and safely flying millions of people every year,” the Group CEO said in closing.