Qantas has reduced capacity by almost a quarter, taken 10 of its 12 A380 aircraft out of service, and has cancelled its $150 million share buy-back among other measures announced Tuesday as it deals with the fallout of the COVID-19 outbreak.
The cuts to seats – predominately targeted at Asian routes with US and UK services also slashed – is the equivalent of grounding 38 aircraft. Qantas’ budget arm Jetstar will face heavy capacity reductions.
Chief executive Alan Joyce has foregone his salary for six months and said the situation remains hard to predict. Joyce had a realised pay of $23.88 million in 2018, according to The Australian Council of Superannuation Investors (ACSI).
“It’s hard to predict how long this situation will last, which is why we’re moving now to make sure we remain well-positioned. But we know it will pass, and we’ll be well-positioned to take advantage of opportunities when it does,” he said in a statement.
The airline has frozen all non-essential consultancy work and asked all Qantas and Jetstar employees to take paid or unpaid leave in light of the reduced flying activities.
Group chairman Richard Goyder will take no fees, with the rest of the board taking a 30 per cent fee reduction. The executive team will take a similar cut to their salary.
Qantas said it is not possible to provide any meaningful guidance on what the coronavirus outbreak will take out of its earnings for the remainder of the 2020 financial year.
“The group is in a strong position, with low debt levels and a long debt maturity profile, $1.9 billion in cash plus a further $1 billion in undrawn facilities and $4.9 billion in unencumbered assets,” it said.
The airline will also delay the start of its new Brisbane-Chicago route from April 15 to mid-September. Increased demand for the Perth-London service means the Sydney-Singapore-London service will be temporarily rerouted to a Sydney-Perth-London flight.