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Qantas to terminate 6,000 employees, launches $1.9bn capital raise
Qantas, Australia’s largest airline, will permanently terminate 6,000 employees as it looks to rebuild after the COVID-19 pandemic, the board told investors.
Qantas to terminate 6,000 employees, launches $1.9bn capital raise
Qantas, Australia’s largest airline, will permanently terminate 6,000 employees as it looks to rebuild after the COVID-19 pandemic, the board told investors.
During a statement to the ASX, chief executive Alan Joyce confirmed that the airline would be making some “extremely significant and very difficult announcements” as it looks to cut costs by $15 billion over the next three years.
“Many of the 6,000 job losses we’re announcing today are people who have spent decades here. It’s not unusual to have several members of one family working at Qantas and Jetstar,” Mr Joyce said.
The CEO highlighted that pre-COVID-19, the company was looking to actively invest in its staff to grow the business.
“What makes this even harder is that right before the crisis hit, we were actively recruiting. We were gearing up for Project Sunrise. We were getting ready to buy planes.”
“Now, we’re facing a sudden reversal of fortunes that is no one’s fault but is very hard to accept,” Mr Joyce said.
With international travel non-existent due to border closures and domestic travel severely restricted, the aviation industry has been under pressure in the past three months, which has seen Virgin Australia fall into administration.
Qantas has 30,000 staff, of which 25,000 had been temporarily stood down earlier in the year, when the borders were originally closed.
Mr Joyce also announced that Qantas has been placed in a trading halt as the company looks to issue $1.9 billion in new capital from new shares.
Qantas said it would be making an announcement to the ASX in connection with a capital raising comprising an institutional placement and a share purchase plan.
The issue price for new shares under the placement will be $3.65.
Mr Joyce said the new shares were part of a three-step approach to ensure the survival of the national carrier.
“The first is to rightsize our workforce, fleet and capital spending for a world that has less flying for an extended period,” he said.
“The second is restructuring to deliver ongoing savings across the group’s operations in a changing market.”
“And the third is recapitalisation through an equity raise that will strengthen our balance sheet and accelerate our recovery,” Mr Joyce said.
The CEO also stated that previously announced dividends would be cancelled.
Australia’s flag carrier is increasing domestic capacity to 15 per cent of pre-coronavirus levels following an easing in coronavirus-related social and travel restrictions.
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