Qantas will stand down about 2500 workers for two months as it takes a hit from the extended COVID lockdown in NSW and knock-on border closures across Australia.
Chief executive Alan Joyce said it was a difficult decision that reflected the reality confronting many businesses operating in NSW.
“This is clearly the last thing we want to do, but we’re now faced with an extended period of reduced flying and that means no work for a number of our people,” he said on Tuesday.
The move will hit domestic pilots, cabin crew and airport workers across Qantas and budget arm Jetstar. Most are based in NSW.
No job losses are expected.
Qantas said workers would get two weeks’ notice of the stand down, with pay continuing until mid-August.
It expects government disaster payments to help eligible employees during the stand downs, including an extra $100 million in support for the struggling aviation industry unveiled by the federal government on Monday.
Deputy Prime Minister Barnaby Joyce announced the latest aviation support, which will allow Australian airlines to claim $750 a week for half of their pilots and flight attendants to ward off further job losses.
They can claim for 50 per cent of their air crew workforce if they can show a 30 per cent downturn since Sydney became a national COVID-19 hotspot.
Subsidies are likely to cover a greater proportion of air crew if Sydney’s lockdown drags on.
“We believed it was pretty imminent that a lot of staff we’re going to get put off and we had to step in there very quickly to make sure we keep these planes in the air,” the Deputy PM said.
Airlines cannot claim payments for ground crew and won’t be able to retrench workers if they want to be part of the scheme.
ASU Assistant National Secretary Emeline Gaske said the announcement was “devastating” for Qantas and Jetstar workers.
“These workers have had 18 months of hell – with many exhausting their savings, being forced to sell their homes, and tap into essential superannuation funds,” she said.
“Aviation workers are hanging by a thread, whether they work for a domestic airline, a foreign airline or in an airport support role.”
Alan Joyce said Qantas had absorbed significant costs since the latest round of lockdowns began, and had kept paying staff despite thousands of cancelled flights.
“Qantas and Jetstar have gone from operating almost 100 per cent of their usual domestic flying in May to less than 40 per cent in July because of lockdowns in three states,” he said.
Domestic flights are expected to rise to 50-60 per cent of normal levels once other states reopen to Victoria and South Australia, and the latest Brisbane outbreak is brought under control. But Sydney remains a major concern.
“Based on current case numbers, it’s reasonable to assume that Sydney’s borders will be closed for at least another two months,” the Qantas boss said.
“We know it will take a few weeks once the outbreak is under control before other states open to NSW and normal travel can resume.”
NSW reported 207 local coronavirus cases on Monday, continuing a trend of new infections of about 200 every day. The lockdown of greater Sydney and its surrounds will run until at least the end of August.
Mr Joyce said “travel is at the top of people’s lists” and bounced back quickly once borders reopened.
“The vaccine rollout means the end is in sight and the concept of lockdowns will be a thing of the past. Australia just needs more people rolling up their sleeves as more vaccine arrives,” he said.
However, challenges remained for international borders.
“There are still several thousand Qantas and Jetstar crew who normally fly internationally and who have been on long periods of stand down since the pandemic began,” Mr Joyce said.
“Higher vaccination rates are also key to being able to fly overseas again, and finally getting all our people back to work.”
The federal government has already spent about $4.5 billion propping up airlines during the pandemic.
A separate half-price flights program has also been extended to November 30.