Qantas is cutting 6,000 jobs and aims to raise $ 1.3 billion
The reduction announced on Thursday accounts for 20% of Qantas’ total workforce of 29,000 people, the company said in a statement. They will primarily affect the airline’s corporate, ground and flight staff, while another 15,000 workers will remain on the plan “until the flight returns,” it adds. This will also be affected by Jetstar, the company’s budget holder.
The new measures are expected to help the company cut costs by A $ 15 billion ($ 10 billion) over three years. It then targets A billion Australian dollars (approximately $ 686,000) in ongoing savings each year.
Qantas shares, which have fallen 41% this year, stopped trading in Sydney on Thursday when it announced. His fundraising plan will include offering institutional investors an additional $ 1.36 billion (about $ 933,000), with a discount of about 13% 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 a reversal strategy, CEO Alan Joyce also agreed to remain in his role until the end of fiscal year 2023.
“Right now, all airlines are in the middle of the biggest crisis the industry has ever faced,” Joyce said in a statement. “The effect will be felt for a long time to come.”
The Australian union service, however, said on 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 is Qantas’ announcement premature, ”the group said in a statement. “The Australian economy cannot afford a significant reduction in the aviation industry.”
Joyce said during the company’s announcement that “the crisis has left us no choice.”
“The collapse of the billion-dollar revenue leaves 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 position ourselves for a few years where revenue will be significantly lower. And that means we will become a smaller airline in the short term.”
A hit of the tourism sector
There is only one flash of hope: Australia’s domestic travel market is showing signs of life as lock restrictions are gradually increasing across the country. Qantas said it was recording increasing demand for travel to Australia – the domestic number of domestic passengers doubled last week to 64,000 people.
Authorities in Australia are expected to lift the closure of state borders next month, which Qantas expects to further improve local travel.
“Once that happens, we can get more people back to work,” Joyce said.
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