Qantas is cutting 6,000 jobs and aims to raise $ 1.3 billion

Qantas is cutting 6,000 jobs and aims to raise $ 1.3 billion

The reduction announced on Thursday accounts for 20% of Qantas’ total workforce of 29,000 people, the company said in a statement. They will primarily affect the airline’s corporate, ground and flight staff, while another 15,000 workers will remain on the plan “until the flight returns,” it adds. This will also be affected by Jetstar, the company’s budget holder.

The airline is also introducing drastic changes to its fleet as part of a broader three-year plan to help its business recover from the historic decline in global travel. Most international carrier aircraft – or up to 100 planes – will remain grounded for a year, the company said. His six Boeing (BA) 747 jumbo aircraft are also retired six months ahead of schedule.

The new measures are expected to help the company cut costs by A $ 15 billion ($ 10 billion) over three years. It then targets A billion Australian dollars (approximately $ 686,000) in ongoing savings each year.

Qantas shares, which have fallen 41% this year, stopped trading in Sydney on Thursday when it announced. His fundraising plan will include offering institutional investors an additional $ 1.36 billion (about $ 933,000), with a discount of about 13% on the stock closing price on Wednesday.

The remaining $ 500 million will be sought through a separate share sale plan offered to existing investors.

To lead a reversal strategy, CEO Alan Joyce also agreed to remain in his role until the end of fiscal year 2023.

“Right now, all airlines are in the middle of the biggest crisis the industry has ever faced,” Joyce said in a statement. “The effect will be felt for a long time to come.”

See also  'The Greatest Game': Finland and the Dream 'In Your Hands'

The Australian union service, however, said on Thursday that it was “too early” for Qantas to cut jobs – and called on both the airline and the federal government to protect workers’ wages.

“This is Qantas’ announcement premature, ”the group said in a statement. “The Australian economy cannot afford a significant reduction in the aviation industry.”

Joyce said during the company’s announcement that “the crisis has left us no choice.”

“The collapse of the billion-dollar revenue leaves us with little choice if we want to save as many jobs as possible in the long run,” he said in a statement. “We have to position ourselves for a few years where revenue will be significantly lower. And that means we will become a smaller airline in the short term.”

A hit of the tourism sector

Qantas had already severely reduced its flight capacity as the pandemic lifted demand for travel. And last week, the airline canceled most of its international flights until October.
Qantasa’s main local competitor, Virgin Australia, is also fighting for its life. In April, airline Richard Branson applied for voluntary administration after failing to receive the government support it sought. It is now making bids from the parties to participate in its restructuring and eventual sale.
The news that Qantas is based on so many fleets indicates its eclipse, even if Australia is considered a potential destination for several proposed “travel bubbles”. The main Australian carrier said it has scheduled flights “in the coming months” to accommodate the new arrangement by which passengers will travel between Australia and New Zealand.
The Fiji government also announced earlier this week that it plans to create a travel bubble with Australia and New Zealand.
But “it is clear that international travel is likely to linger for a long time,” Joyce said Thursday. He quoted the prediction International Air Transport Agency, which estimated it could take more than three years for global travel to return to pre – crisis levels.

There is only one flash of hope: Australia’s domestic travel market is showing signs of life as lock restrictions are gradually increasing across the country. Qantas said it was recording increasing demand for travel to Australia – the domestic number of domestic passengers doubled last week to 64,000 people.

See also  India and Australia are strengthening military ties as tensions escalate in the South China Sea

Authorities in Australia are expected to lift the closure of state borders next month, which Qantas expects to further improve local travel.

“Once that happens, we can get more people back to work,” Joyce said.

Leave a Reply

Your email address will not be published. Required fields are marked *