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Qantas is set to make a PROFIT after sacking 6,000 employees due to coronavirus crisis

REVEALED: How Qantas is set to make a PROFIT after sacking 6,000 employees in a crisis that could result in thousands more job losses across the tourism sector

  • Qantas is set to make a profit this year after axing a fifth of its workforce 
  • The national airline announced three-year plan to slash costs by $15 billion
  • Expects to report a full-year result between breakeven and a underlying profit

Qantas is set to make a profit this year after axing a fifth of its workforce and grounding the bulk of its international fleet to try and survive the COVID-19 crisis. 

The national airline has shed 6,000 jobs as part of a drastic three-year plan to slash costs by $15 billion. Almost 15,000 other staff will remain stood down without pay or on enforced leave.

Industry experts say the coronavirus pandemic could lead to thousands of other job losses within the tourism sector.  

Qantas chief executive officer Alan Joyce on Thursday said he did not expect the airline to resume international services in any significant way until July next year at the earliest.

Pictured: An empty Qantas check in terminal is seen at Sydney Airport on Thursday

‘The collapse of billions of dollars in revenue leaves us little choice if we are to save as many jobs as possible long term,’ Mr Joyce said.

‘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.’

Mr Joyce said vital signs were strengthening for domestic operations and the airline has ‘extremely bright prospects for recovery’.

But to get there, the carrier will have to raise $1.9 billion through a share sale to balance its books. 

Qantas made $771 million in profit before tax in the first half of fiscal 2020, on $9.5 billion in revenue.

The company expects to report a full-year result between breakeven and a small underlying profit.

Qantas chief executive officer Alan Joyce on Thursday said he did not expect the airline to resume international services in any significant way until July next year at the earliest

Qantas chief executive officer Alan Joyce on Thursday said he did not expect the airline to resume international services in any significant way until July next year at the earliest

Its fuel hedging program, which aimed to protect Qantas from fluctuations in the cost of jet fuel, will cost the airline between $550 million to $600 million given its reduction in fuel consumption.

The $1.9 billion equity raising announced on Thursday will give Qantas pro forma liquidity of $4.6 billion – $3.6 billion in cash and $1 billion in undrawn debt facilities.

Mr Joyce promised generous redundancy payouts, worth $600 million, to the 6,000 who will lose their jobs – a mix of pilots, cabin crew, engineers, ground workers and corporate staff.

Voluntary redundancies will be offered before people are tapped to leave.

He said he would continue not taking a salary while executive staff will take a 15 per cent pay cut.

‘This year was supposed to be one of celebration for Qantas. It’s our centenary. Clearly, it is not turning out as planned,’ Mr Joyce said.

Pictured: Qantas staff are seen at Sydney Airport on Thursday

Pictured: Qantas staff are seen at Sydney Airport on Thursday

The three-year plan aims to have 21,000 active employees by June 2022. The Qantas Group currently has 29,000 staff.

Industry experts predict the loss of 6,000 Qantas jobs and grounding at least 100 aircraft for up to 12 months will impact thousands of other workers in the travel sector, The Daily Telegraph reported.

Executive director of the Australian Tourism Industry Council Simon Westaway said the international market is ‘not coming back any time soon’ and ‘big gateways’ for international travellers would take the hit. 

This includes major cities Sydney and Melbourne, as well as the south-east and north-east corners of Queensland.   

‘They are most aligned to the international dollar. There are tens of thousands of jobs interrelated to this decision today,’ Mr Westaway said.

National CEO of the Tourism Accommodation Association Michael Johnson said hotels would not be able to fully recover until international travel returned to normal.  

‘Problems in the airline industry will slow the recovery of the accommodation sector right across the country, which is why Tourism Accommodation Australia has been lobbying the government to extend the JobKeeper payment,’ Mr Johnson said.

‘At the moment JobKeeper is the only thing keeping the industry afloat.’

Qantas has shed 6,000 jobs as part of a drastic three-year plan to slash costs by $15 billion. Almost 15,000 other staff will remain stood down without pay or on enforced leave

Qantas has shed 6,000 jobs as part of a drastic three-year plan to slash costs by $15 billion. Almost 15,000 other staff will remain stood down without pay or on enforced leave

A glimpse at Qantas’ financial picture

WHERE QANTAS STANDS FINANCIALLY

* Qantas made $771 million in profit before tax in the first half of fiscal 2020, on $9.5 billion in revenue

* The company expects to report a full-year result between breakeven and a small underlying profit

* Its fuel hedging program, which aimed to protect Qantas from fluctuations in the cost of jet fuel, will cost the airline between $550 million to $600 million given its reduction in fuel consumption

* As of May 31, Qantas owed $4.7 billion in net debt, with no major debt maturities until June 2021

* The $1.9 billion equity raising announced on Thursday will give Qantas pro forma liquidity of $4.6 billion – $3.6 billion in cash and $1 billion in undrawn debt facilities.

* The company will be retiring its six remaining 747s immediately, six months ahead of schedule

* The plan announced on Thursday targets benefits of $15 billion over three years

EXECUTIVE RENUMERATION

* CEO Alan Joyce, and senior management team, have not taken salary for three months and won’t for July.

* From July, other executives will take a pay cut of 15 per cent.

BY: AUSTRALIAN ASSOCIATED PRESS 

 

Read more at DailyMail.co.uk


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