This morning, we found out that at least 6,000 jobs would be permanently lost from Qantas as a result of the financial crisis brought about by the coronavirus pandemic.
Which staff are targeted for redundancies?
Jobs are being lost across the company, including:
- Ground operations, including baggage handlers (1,500)
- Office roles (1,450)
- Cabin crew (1,050)
- Engineering (630)
- Pilots (220)
The company said there would be a voluntary redundancy process before it moved to compulsory redundancies.
In addition, 15,000 employees will remain stood down from their roles.
What percentage of Qantas staff is affected?
There were around 30,000 employees at last count, meaning about 20 percent of them will be made redundant.
When you consider that the 6,000 redundancies are on top of 15,000 employees who remain stood down, the majority of workers at Qantas are affected.
Many of the stood down employees face a long wait until the airline has work for them again (particularly with regards to international travel).
Will the stood down staff get their jobs back eventually?
Yes, chief executive Alan Joyce says that’s the plan.
At a press conference today, he gave this rough timeline for getting employees back to work:
Mr. Joyce said he hoped to have 21,000 employees back at work by mid-2022.
As for the 6,000 redundancies, Mr. Joyce explained that they referred to jobs that Qantas didn’t see being needed “for a long time”, which is why he said they were being cut.
Will flights/routes be canceled? When will international flights start?
Given the impact COVID-19 has had on the airline industry, for most of Qantas’s flights, the question isn’t if they’ll be canceled but when they’ll return.
Mr. Joyce says he’s optimistic about domestic flights and hopes to have them back at 40 percent of where they were pre-crisis from next month.
He says the market will then get back to 70 percent of pre-COVID levels in the next year, before reaching 100 percent the following year.
But for international travel, it’s another story, with Mr. Joyce saying it will “take a long time”.
In fact, he said he wasn’t expecting services to resume before July next year, with the possible exception of a “trans-Tasman” bubble with New Zealand.
Once the recovery for international travel begins, it’s expected to be a long road back, with Qantas expecting international flights to remain at two-thirds of where they were pre-coronavirus in the financial year 2022-23.
Will flight credit be honored, or should I beg for a refund?
Don’t worry, there haven’t been any changes to Qantas flight credit today.
But having said that, just last week the ACCC was reminding people that refunds are a right (not something they need to beg for).
The ACCC said Qantas had not been upfront enough about this.
So, the choice is yours there. If you do opt for flight credit, Qantas has this information about when you need to use it:
Is Joyce taking a pay cut?
He is. The Qantas chief executive said he would continue not taking a salary, while the airline’s executives would miss out on bonuses this year.
As well, Mr Joyce said executive staff had been asked to take a 15 percent pay cut.
Prime Minister Scott Morrison put the basic problem facing Qantas pretty simply at a press conference earlier:
Mr Joyce said the restructuring of Qantas announced today would cost up to $1 billion, but was necessary.
However, the Transport Workers’ Union slammed his announcement, saying Qantas should hold off on job cuts until after a Federal Government review of JobKeeper, set to be conducted at the end of this month.
Which aircraft are being retired?
Qantas’s six remaining 747s will be retired immediately (that was always going to happen, but not for another six months).
Up to 100 more aircraft will be grounded for 12 months or longer.
That includes Qantas’s A380s, which Mr Joyce said would be out of operation for at least three years. The 12 of them will be sent to the Mojave Desert in the United States.
Why send aircraft to a desert in America rather than keep them here?
It’s a better environment for the aircraft to stay idle, as the dry conditions minimise corrosion.
Will Qantas survive?
Mr Joyce said the announcement today of Qantas’s first equity raising in a decade, which is expected to reach up to $1.9 billion, will get the company “well through into ’22, into ’23”.
What does this mean for Qantas’s share price?
We don’t know yet, I’m afraid, because Qantas shares went into a trading halt ahead of today’s announcement. And as for the long-term impact, you’d need a crystal ball to know that.