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

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

The cuts announced on Thursday accounted for 20% of Qantas’ total workforce of 29,000, according to the company. They will mainly affect the company staff, the ground and flight personnel, while another 15,000 employees will remain at a distance until the flights return, “he added. Jetstar, the company’s budget carrier, will also be affected.

The airline is also making drastic changes to its fleet as part of a broader, three-year plan to help its business recover from the historic recession in global travel. Most of the carrier’s international aircraft – or up to 100 aircraft – will remain grounded for a year, the company said. The six Boeing (NE) 747 jumbo aircraft are also withdrawn from the program six months earlier.

The new measures are expected to help the company cut costs by $ 15 billion in Australia ($ 10 billion) in three years. After that, it targets $ 1 billion (about $ 686,000) in repeated savings each year.

Shares of Qantas, down 41% this year, stopped trading in Sydney on Thursday as it made the announcement. The fundraising plan will include offering additional 1.36 billion Australian shares (about $ 933,000) to institutional investors, with a 13% discount 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 the recovery strategy, CEO Alan Joyce also agreed to remain in office until the end of the 2023 financial period.

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

The Australian Association of Services, however, claimed 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 announcement by Qantas is premature,” the group said in a statement. “The Australian economy cannot withstand a significant contraction in the aviation industry.”

Joyce said in a statement that “the crisis has left us with no choice.”

“Billions of dollars in revenue are leaving 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 be in place for several years, and the revenue will be much lower. And that means becoming a smaller airline in the short term. “

The travel sector has been hit

Qantas had already severely reduced its ability to fly as the pandemic eliminated demand for travel. And last week, the airline canceled most of its international flights until October.
Qantas’ main local competitor, Virgin Australia, is also fighting for its life. In April, the airline, backed by Richard Branson, filed for voluntary administration after failing to receive the government support it requested. He is now submitting offers from contracting parties to participate in the restructuring and possible sale.
The news that Qantas is landing heavily from its fleet shows its dark prospects, even when Australia is hailed as a possible destination for several proposed “travel bubbles”. The Australian flagship said it had scheduled flights “in the coming months” to accommodate a new arrangement that would allow passengers to travel between Australia and New Zealand.
The Fiji government also announced earlier this week that it intends to create a travel bubble with Australia and New Zealand.
But “it’s clear that international travel is likely to stop for a long time,” Joyce said on Thursday. He mentioned a prediction from International Air Transport Authority, which estimates it will take more than three years for global travel to return to pre-crisis levels.

There is a glimmer of hope: Australia’s domestic travel market is showing signs of life as locking restrictions are gradually lifting across the country. Qantas said it sees growing demand for travel to Australia – the number of domestic passengers in the country doubled to 64,000 last week.

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

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

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