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Coronavirus: Qantas to axe 6,000 jobs due to pandemic

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Australia’s national carrier says it has been hit “very hard” by the virus

Qantas will axe 6,000 jobs as part of its plans to survive the coronavirus pandemic, the airline says.

The cuts equate to about a fifth of the airline’s workforce prior to the Covid-19 crisis. In March, it furloughed more than 80% of its staff.

Australia’s national carrier said the collapse in global air travel had devastated revenues.

Last week, the Australian government said its border would most likely remain closed into next year.

It prompted Qantas to cancel all international flights until late October, except for those to New Zealand.

On Thursday, chief executive Alan Joyce said the airline expected smaller revenues in the next three years, forcing it to become a smaller operation to survive.

“The actions we must take will have a huge impact on thousands of our people,” he said in a statement.

“But the collapse in billions of dollars in revenue leaves us little choice if we are to save as many jobs as possible, long term.”

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Media captionCoronavirus: How to fly during a pandemic

Mr Joyce added that Qantas, and its budget subsidiary Jetstar, would continue to extend a furlough for about 15,000 workers “as we wait for the recovery we know is coming”.

Australia has flattened its virus curve faster than other nations, meaning demand for domestic flights has returned and is expected to fully recover by 2022.

But international demand at that time is forecast to be half of what it was, Qantas said.

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The airline also plans to raise A$1.9bn (£1.05bn; $1.3bn) in equity – its first such move in 10 years – to bring in new funds and help “accelerate” its recovery.

Other short-term savings will be found by grounding up to 100 planes, including its A380 fleet, and deferring the purchase of new planes, it said.

Greg Waldron, Asia managing editor of FlightGlobal, told the BBC that the measures should help support the airline as it deals with the fallout from the pandemic.

“Qantas’s mix of job cuts, fleet reductions, and capital raising are designed to reduce costs during a demand crisis for the industry, and retain a solid core for the eventual rebound. In the short to medium term, Australia’s strong domestic market should help Qantas’s revenue partially revive.”

Decisions offer insight on Australia border question

Simon Atkinson, BBC News in Sydney

Australia’s borders remain pretty much shut in and out – apart from returning citizens or for passengers with exceptional circumstances. And the comments by Qantas today are telling.

By grounding most of its international fleet “for at least the next year”, the airline is clearly not expecting international borders to open up in a meaningful way until at least June 2021.

Should the much talked-about trans-Tasman bubble between Australia and New Zealand open up, Qantas will doubtless be part of that.

But for non-Australians hoping to visit family abroad – or for Aussies eyeing a holiday to Bali – there’s no need to pack the passport for a while yet.

Of course today the biggest thoughts go to the 6,000 or so Qantas staff who are losing their jobs, and the 15,000 employees who remain stood down.

Mr Joyce is hopeful about half of that latter group will be back helping the airline run domestic routes by the end of the year on the back of ramped-up demand to fly around this vast country. That hinges on Australia’s states opening borders to allow free travel.

And that depends on Australia keeping Covid-19 well under control – so outbreaks like the one we’re seeing right now in Melbourne do not become the norm.

The airline said its massive loyalty programme – which has 13 million members or around half Australia’s population – would be its best hope of recovery while borders remain closed.

Australia’s other large carrier, Virgin Australia, slumped into voluntary administration in April and is currently undergoing a sale process.

The International Air Transport Association (IATA) – the peak body for airlines – has warned that global airline revenue has seen a 55% decline on 2019 levels. IATA says it will take more than three years for global travel to return to 2019 levels.

Aviation industry analyst Shukor Yusof from Endau Analytics warned that worse is still to come for the world’s airlines as they deal with the fallout from the pandemic.

“The crisis is deeper and wider than what many think it is, and it will have a debilitating effect on the industry. We are seeing just the beginning of what is going to be at least 12 to 18 months of pain and suffering before airlines slowly recover.”

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