Qantas to stand down majority of employees, suspends all international flights

Qantas to stand down majority of employees, suspends all international flights

Two-thirds of Qantas Group's (ASX: QAN) entire workforce will be temporarily stood down as the airline suspends all international flights from the end of March.

All international Qantas and Jetstar flights will be suspended until at least the end of May 2020.

Because of the suspension, the majority of Qantas Group's 30,000 employees, approximately 20,000 staff, will be stood down until services begin to resume as usual.

Senior executives and the board have increased their salary reductions from 30 per cent to 100 per cent until the end of the financial year, joining the chairman and group CEO in taking no pay.

The airline may maintain "key links" that the Federal Government believes should continue.

Essential domestic, regional and freight connections will be maintained as much as possible, with the airline sticking to the 60 per cent domestic capacity reduction announced earlier this week.

As a result, more than 150 aircraft will be temporarily grounded including all of Qantas' A380s, 747s and B787-9s and Jetstar's B787-8s.

Jetstar Asia (Singapore), Japan, and Pacific (Vietnam) will also suspend international flights and significantly cut domestic flying.

Affected staff members will be able to draw down on annual leave and long service leave and additional support mechanisms to be introduced, including leave at half pay and early access to long service leave.

However, periods of leave without pay for some employees will be inevitable according to Qantas.

"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," says Qantas Group CEO Alan Joyce.

"This is having a devastating impact on all airlines."

"We're in a strong financial position right now, but our wages bill is 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."

Qantas believes it is prudent at this time to defer the interim dividend previously scheduled for payment on 9 April 2020 to 1 September 2020.

Updated at 9:10am AEDT on 19 March 2020.

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