Qantas will ground 100 aircraft for up to a year, cut 6,000 jobs, and seek to raise A$1.9 billion (US$1.3 billion) in fresh equity, as part of a three-year post-Covid recovery plan.
The 6,000 roles made redundant will be across all parts of the business. In the meantime, the group will also continue the stand down for 15,000 employees, until flying returns.
The plan will also see the early retirement of the group’s six remaining 747s, and the grounding of up to 100 aircraft for up to 12 months or longer, including most of its international fleet. The majority are expected to ultimately go back in to service but some leased aircraft may be returned as they fall due, said the airline in a statement. As well, A321neo and 787-9 fleet deliveries for Qantas and Jetstar have been deferred.
In addition, the group will seek to raise up to A$1.9 billion, comprising of a fully underwritten institutional placement to raise approximately A$1,360 million and a non-underwritten share purchase plan for eligible existing shareholders to participate of up to A$500 million.
Proceeds will be used to strengthen the airline’s balance sheet and position it to capitalise on opportunities aligned with its strategy.
The plan targets benefits of A$15 billion over three years, in line with reduced flying activity including fuel consumption savings, and delivering A$1 billion per annum in ongoing cost savings from the 2023 financial year through productivity improvements across the group.
Qantas Group CEO Alan Joyce said: “The Qantas Group entered this crisis in a better position than most airlines and we have some of the best prospects for recovery, especially in the domestic market, but it will take years before international flying returns to what it was. We have to position ourselves for several years where revenue will be much lower. And that means becoming a smaller airline in the short-term.”