Qantas to temporarily stand down majority of staff, ground all international flights

Two-thirds of the Qantas Group’s 30,000 employees are to be temporarily stood down until the end of May.

In a week of major announcements from Australia’s international carriers, Qantas will suspend all scheduled overseas flights until “at least” the end of May as it assists with repatriation efforts for Australians, following the federal government’s new advice against all travel outside of the country.

“The efforts to contain the spread of coronavirus have led to a huge drop in travel demand, the likes of which we have never seen before. This is having a devastating impact on all airlines,” Qantas CEO Alan Joyce said in a statement.

“We’re in a strong financial position right now, but our wages bill is more than $4 billion a year. With the huge drop in revenue we’re facing, we have to make difficult decisions to guarantee the future of the national carrier.”

See more: Virgin Australia to suspend all international flying

Joyce said that rather than lose its highly skilled employees, who will be needed “when this crisis passes”, the Qantas Group would instead stand down the majority of its 30,000 employees until at least the end of May 2020.

“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people,” he said.

“Most of our people will be using various types of paid leave during this time, and we’ll have a number of support options in place. We’re also talking to our partners like Woolworths about temporary job opportunities for our people.

“This is a very hard set of circumstances for our people, as it is for lots of parts of the community right now.”

Qantas said that employees could draw down on annual and long service leave, with additional supports to be introduced, including leave at half pay and early access to long service leave.

Employees with low leave balances at the start of the stand-down will be able to access up to four weeks’ leave in advance of earning it.

However, Qantas acknowledged periods of leave without pay for some employees are “inevitable”.

It comes as it and fellow Australian carriers prepare to receive parts of a $715 million tax payer-funded relief package focused on airlines, and follows Qantas’ comments it is in a strong position to weather the economic impacts of COVID-19.

The carrier last week said it retains low debt levels and a long debt maturity profile, $1.9 billion in cash, a further $1 billion in undrawn facilities and $4.9 billion in unencumbered assets.

See more: TWU hopes Qantas salary cuts “more than window dressing”

“The Qantas announcement today amounts to workers bailing out the airline,” Transport Workers Union (TWU) national secretary Michael Kaine said.

“Qantas has serious questions to answer, including how many workers will be forced to take unpaid leave and whether the airline will credit workers’ their leave back when the crisis abates.”

Travel Weekly has contacted Qantas for comment.

Senior group management executives and the board have increased their salary reductions from 30 per cent to 100 per cent until at least the end of this financial year, joining the chairman and group CEO in taking no pay. Annual management bonuses have also been cancelled.

The payment of a $201 million shareholder dividend has been deferred until September 2020, with Qantas additionally cancelling its previously announced off-market share buyback.

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