More Qantas jobs to go if outbreak delays ‘trans-Tasman bubble’
More Qantas workers face the sack if Victoria's new coronavirus outbreak delays the resumption of interstate air travel and plans for a "trans-Tasman bubble".
Already 6000 jobs and $15 billion of costs will go over three years as boss Alan Joyce "right sizes" the Flying Kangaroo to confront what he described as the biggest crisis in aviation history.
The cuts equate to 20 per cent of the airline's workforce, but analysts said that was likely to rise if the Andrews government's "suburban testing blitz" in Melbourne fails to curb new case numbers.
Airline Ratings founder Geoffrey Thomas said he expected more staff would lose their jobs unless Victoria got on top of the situation and the federal Government extended wage subsidies.
"It's a very dynamic situation," Mr Thomas said. "You've still got 15,000 people on furlough."
Mr Thomas said there were also implications for travel across the Tasman.
"Joyce is expecting the New Zealand 'bubble' to go ahead. If it doesn't then a lot of their plans will be scuppered," he said.
Strategic Aviation Solutions chairman Neil Hansford said Victoria's infection spike could see Queensland Premier Annastacia Palaszczuk "use it as an excuse not to open the borders".
After Qantas made its axings public, Prime Minister Scott Morrison revealed a plan was being developed to provide financial help to the airline industry beyond the scheduled end of the JobKeeper subsidy in September.
The PM said he spoke with Mr Joyce on Wednesday evening and "was very clear … that we know that those sectors that continue to be significantly affected will need continued support and so we are just working through the best way to target and deliver that support".
"To all of the Qantas family who will be hurting badly … I extend my deepest, my deepest regrets," Mr Morrison said.
Responding to the PM, Transport Workers Union national secretary Michael Kaine said the airline's employees were "much less interested in you extending your regrets and much, much more interested in you extending JobKeeper".
Mr Kaine said some of Mr Joyce's language was "offensive" and "outrageous".
"What is right-sizing?" he said. "It's just a buzzword to try to lift the share price of this company.
"Mr Joyce, you must put these redundancies on hold. It makes no sense for you to make hasty decisions about the shape of the workforce until you know the shape of the Government's support."
About 1500 head office jobs will be chopped; ditto in ground operations such as baggage handling. Cabin crew will fall by 1000, engineering by 630 and 220 mainly 747 pilots will be shown the exit.
The Qantas cuts follow Virgin's collapse in April, with thousands of the No. 2 carrier's employees likely to lose their jobs under whichever of the three bidders administrators pick as the new owners next week. Among Qantas's 29,000 current staff, about 8000 will be back at work by the end of next month when domestic traffic was tipped to reach 40 per cent of usual before Victoria's new outbreaks.
Another 7000 should return to their jobs by Christmas, provided states remove border restrictions.
Qantas expects 21,000 of its people will be active by June 2022, with the domestic market at 100 per cent by then.
The cost of mostly voluntary redundancies will be at least $600 million, paid from the $1.9 billion raised by selling 373 million new shares, mainly to major investors at $3.65 apiece. Qantas stock was put in a trading halt before the share market opened on Thursday, having last traded at $4.19.
The capital raising will dilute 84,000 small-time investors' stakes by 20 per cent, plus the board has cancelled the second-half dividend payment of about 13c a share.
A $500 million retail share offer will open next month.
The price will be no more than $3.65, but could be lower if the stock falls in coming days.
The board also decided to ask Mr Joyce to stay on until 2023, by which time he will have been in charge for 15 years. He agreed.
Mr Joyce said it was unlikely there would be international travel of "any real size" until July 2021 and that it would be three years before there was a return to pre-pandemic levels.
"We've never experienced anything like this before, no one has," he said. "All airlines are in the middle of the biggest crisis our industry has ever faced." But he said he was optimistic about the future, in particular about the potential for non-stop flights that saved passengers time by cutting out stopovers that may entail stringent health and security checks.
Originally published as More Qantas jobs to go if Vic outbreak delays 'trans-Tasman bubble'