QANTAS has announced that it will ground almost all its international fleet for up to 12 months, as part of a wide-ranging plan announced this morning to help the carrier survive the COVID-19 pandemic.
About 15,000 staff associated with QF’s international operations will continue to be stood down, while the airline will also reduce its overall workforce by about 6,000 compared to pre-coronavirus levels. QF CEO Alan Joyce said.
The plan is expected to save the company $15 billion over three years, in line with reduced flying activity including fuel consumption savings, and deliver $1 billion per annum in ongoing cost savings from FY23 through productivity improvements.
A key action of the plan includes reducing the group’s pre-crisis workforce by at least 6,000 roles across all parts of the business and continuing the stand-down for 15,000 employees, particularly those associated with international operations, until flying returns.
Of the Qantas Group’s 29,000 staff, around 8,000 are expected to have returned to work by the end of July. The company anticipates this will increase to around 15,000 by the end of calendar year 2020 in line with the opening up of domestic flying, and increase further during calendar 2021 and 2022 as the international network returns, reaching 21,000 active employees by June 2022.
Qantas will also retire its six remaining 747s immediately, six months ahead of schedule, as well as grounding up to 100 aircraft for up to 12 months (some for longer), including most of its international fleet.
The company expects the majority to ultimately go back into service, but it warned some leased aircraft “may be returned as they fall due”. Qantas’ A321neo and 787-9 fleet deliveries have been deferred to meet the group’s requirements.
The cost of implementing the plan is estimated at $1 billion, with most of this to be realised during FY21.
Qantas is also launching an equity raising of up to $1.9 billion to accelerate recovery and position for new opportunities.
Subsequent phases of Qantas’ plan focus on the increasing ramp-up of flying and pursuing new opportunities, including its ambition for more non-stop international flights.
There is no doubt that the airline business has unprecedently been hit awfully hard by the Covid-19 global pandemic and it will take a few years before international flying returns to what it was.
Most airlines will have to restructure their business model to survive, resulting in a leaner and more competitive market environment.