Today Qantas announced their post-Covid, three-year strategy to guide recovery and return to growth in changed market.
The plans include around 100 aircraft being grounded for up to 12 months; some for longer. It’s also bad news for staff, with redundancies proposed to manage a surplus of around 6,000 roles, with the temporary surplus of around 15,000 managed through a mix of stand down, annual leave and leave without pay.
The CEO of Qantas, Alan Joyce, has said “it’s clear that International travel is likely to be stalled for a long time.”
“IATA – the peak body for airlines – says it will take more than three years for global travel to return to 2019 levels.”
“That means all airlines – including Qantas – must take action now. We have to position ourselves for several years where revenues will be much lower. And that means becoming a smaller airline in the short term.”
He went on to say that the airline’s international flights will likely not resume until July 2021, but there’s hope for increased domestic travel.
“There are some green shoots domestically. We’re planning to be back to 40 per cent of our pre-crisis domestic flying during July and hopefully more in the months that follow. But we’ll be living with COVID for some time and recent events show we can’t take a low infection rate for granted.”
“Around half of those stood down will be back flying domestically – we think – by the end of the year. The remainder – mostly, those supporting international flying – will return more slowly.”
Key actions of the plan include:
- Reducing the Group’s pre-crisis workforce by at least 6,000 roles across all parts of the business.
- Continuing the stand down for 15,000 employees, particularly those associated with international operations, until flying returns.
- Retiring Qantas’ six remaining 747s immediately, six months ahead of schedule.
- Grounding up to 100 aircraft for up to 12 months (some for longer), including most of the international fleet. The majority are expected to ultimately go back in to service but some leased aircraft may be returned as they fall due.
- A321neo and 787-9 fleet deliveries have been deferred to meet the Group’s requirements.
The cost of implementing the plan is estimated at $1 billion, with most of this realised during FY21.
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