Expects over $ 2 billion loss, cabin crew job cuts

Qantas has revealed further job cuts for international cabin crew and wage freezes as the coronavirus pandemic inhibits overseas travel and still hits the airline financially.

In a business update Thursday, Qantas unveiled a new voluntary layoff program for international crew as part of additional cost-cutting measures.

Job cuts are expected to number in the hundreds.

Around 6,000 workers are still made redundant in the group, and the new layoffs are additional job cuts in addition to the 8,500 positions already withdrawn from the company.

The layoffs target cabin crew on Boeing A380s and A330s that have been taken out of service and are not expected to be relaunched in the next few years.

Qantas chief executive Alan Joyce said the cuts were due to a combination of factors, including the delay in international travel from October to December.

He noted that staffing and operations should be flexible for a “phased” reopening of borders once new travel bubbles begin.

“Instead of a big bang, it will be a phased approach,” Joyce said.

“It could go in any direction and we just need flexibility.”

Singapore, Taiwan and Korea were seen as new travel routes; however, an increase in the number of cases in all three countries has dampened expectations of future thefts.

Mr Joyce said the situation is constantly evolving and travel to the UK and US may return sooner than expected given the drop in cases in both countries, but will depend on the rollout of vaccines in Australia.

“Australians have done an incredible job keeping the lid on COVID. Imagine if we put the same emphasis on vaccine deployment, ”he said.

“It feels like it’s slower than it should be, and we have to get the same effort we got with controlling the virus.”

The layoffs coincide with Qantas anticipating its The massive debt bill will go down, but it still expects to record a huge statutory loss for fiscal 2021 of over $ 2 billion.

Qantas estimates that since the start of the pandemic, it has lost more than $ 16 billion in revenue, with losses in previous and current years exceeding $ 4.7 billion.

Despite the difficult financial situation in the red, Joyce said the company has turned a corner and cash revenues from domestic and freight operations are settling the debt crisis.

“The fact that we are making inroads into the debt that we needed to get through this crisis shows that the business is now on a more sustainable basis,” Joyce said.

“The main driver is the rebound in domestic travel, which now appears larger than it was before COVID, at least until international borders reopen.”

Qantas’ underlying earnings before interest, taxes, depreciation and amortization are expected to reach $ 400 million to $ 450 million for FY21.

Net debt levels peaked in February at $ 6.4 billion, with Qantas estimating debt will decline by year-end.

Qantas also announced that travel agent commissions on international ticket bookings will drop from 5% to 1% as of July 2022.

The Federation of Australian Travel Agents (AFTA) has expressed disappointment with Qantas’ decision to cut commissions, saying it was a blow to an industry still held back by the pandemic.

“The reality is that the continued paralysis of international travel to and from Australia has hit travel agencies and businesses extremely hard, and this is another unwelcome blow,” AFTA said in a statement. .

Qantas has a liquidity position of $ 4 billion; however, the total loss of revenue from COVID-19 is expected to be $ 16 billion.

“We have adjusted our expectations as to when international borders will begin to open based on the new government schedule, but our basic assumption remains the same – that once the national vaccine rollout is actually over, Australia can and must open, ”Joyce said. .

“This is why we have aligned the date of the serious restart of international flights with a successful vaccination program.”

All domestic jets are now back in service, with Qantas and Jetstar expecting to reach an average capacity of 107 and 120 percent respectively above pre-pandemic levels over the next fiscal year.

In the past 12 months, the airline has added 38 new domestic routes.

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