Qantas announces more job cuts amid expected $2bn loss

Qantas has revealed further job cuts for international cabin crew and wage freezes while the coronavirus pandemic inhibits overseas travel.

In a trading update on Thursday, the major airline unveiled a new voluntary redundancy program for international crew as part of additional cost cutting measures.

Roughly 6000 workers remain stood down across the group, and the new redundancies are extra job losses on top of the already 8500 roles that have been cut from the company.

Commissions to travel agents on international ticket bookings will also be lowered from 5 per cent to 1 per cent starting from July 2022.

The new measures coincides with the company saying its massive debt bill is starting to decline but anticipates it will still book a loss while its international travel operations remain on standby until at least the end of the year.

Qantas chief executive Alan Joyce said the company was beginning to turn a corner. Picture: Naomi JellicoeSource:News Corp Australia

The major airline revealed consumer confidence had returned to domestic travel, but significant costs relating to redundancies, aircraft writedowns and depreciation charges would likely cause a statutory loss for financial year 2021 in excess of $2bn.

Qantas chief executive Alan Joyce said the recovery would be long, but the company was beginning to turn a corner.

“The fact we’re making inroads to the debt we needed to get through this crisis shows the business is now on a more sustainable footing,” Mr Joyce said.

“The main driver is the rebound of domestic travel, which now looks like it will be bigger than it was pre-COVID, at least until international borders reopen.”

Underlying earnings before interest, tax, depreciation and amortisation is tipped to hit a range of $400-450m for FY21.

Net debt levels peaked in February at $6.4bn, with Qantas believing the debt will lower by the end of the financial year.

The company also announced a two-year wages freeze for existing employees and has rolled out a new voluntary redundancy program for international cabin crew. Picture: Supplied.Source:Supplied

Qantas has a liquidity position of $4bn; however, total revenue loss from COVID-19 for FY21 is expected to be $16bn.

“We’ve adjusted our expectations for when international borders will start opening based on the government’s new timeline, but our fundamental assumption remains the same – that once the national vaccine rollout is effectively complete, Australia can and should open up,” Mr Joyce said.

“That’s why we have aligned the date for international flights restarting in earnest with a successful vaccination program.”

All domestic planes are now back in service, with Qantas and Jetstar expected to reach a capacity average of 107 and 120 per cent respectively above pre-pandemic levels during the next financial year.

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