Qantas has defended its decision to stand down 20,000 workers and ground all of its international flights as it struggles with the devastating fallout from the coronavirus pandemic.
The airline will also delay its $201 million interim payout and freeze payments to its senior management and board will not be paid for the remainder of the financial year.
The airline made the dramatic announcement early on Thursday morning – just two days after it had said it would slash 90 per cent of international seat capacity.
“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,” chief executive Alan Joyce said.
He said the airline was in a strong financial position, but had a wages bill of 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,” he said.
“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people. Rather than lose these highly skilled employees who we’ll need when this crisis passes, we are instead standing down two-thirds of our 30,000 employees until at least the end of May.”
But the Transport Workers’ Union said the move was particularly galling given the federal government’s $715 million support package for the industry, announced on this week.
TWU national secretary Michael Cain said the announcement was “remarkable”.
“It is only 48 hours since the federal government, after having closed-door meetings with the CEOs of airlines, announced a $750 million relief package,” he said.
“Where is the evidence of that relief package when what Qantas has done is effectively asked workers to give up their hard-earned leave and future leave to bail out this company?”
Qantas workers will be asked to use annual and long-service leave during the stand down – during which 150 planes will be grounded.
Grounded planes include all of the airline’s A380s, 747s and B787-9s and Jetstar’s B787-8s. The decision also applies to Jetstar and its international arms, which will halt all flights.
The decision follows Wednesday’s announcement by the federal government recommending against all overseas travel from Australia.
Qantas said staff will be allowed to access leave early or take it at half-pay. However, some workers would inevitably end up on unpaid leave.
“We’re also talking to our partners like Woolworths about temporary job opportunities for our people,” Mr Joyce said.
“This is a very hard set of circumstances for our people, as it is for lots of parts of the community right now.”
As part of Thursday’s announcement, Qantas’s senior management and board will not be paid for the remainder of the financial year. Mr Joyce and board chairman Richard Goyder have already had their pay frozen.
Qantas said its call centres were overloaded with people trying to change travel plans amid the COVID-19 outbreak.
It said passengers should call only if they were due to travel in the next 48 hours.
All other bookings will be converted to travel credits. Affected customers will be contacted directly from Monday.