Airlines landing hard
Australia’s airline operators are taking big hits as COVID-19 smashes the sector.
Qantas and Jetstar will stand down two-thirds of their 30,000 employees from late March until at least the end of May.
Meanwhile, Virgin Australia is grounding its international fleet and slashing domestic capacity by 50 per cent until June 14.
This is all despite a $715 million support package from the Federal Government.
“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,” Qantas CEO Alan Joyce said.
“This is having a devastating impact on all airlines.
“With the huge drop in revenue we're facing, we have to make difficult decisions to guarantee the future of the national carrier.”
Qantas senior management executives and the board have given up their salaries for this financial year.
Also, a planned payment of a $201 million shareholder dividend will be deferred until September.
Virgin Australia will operate a reduced international schedule to enable Australians to return home and visitors to return to their point of origin.
“We have entered an unprecedented time in the global aviation industry,” Virgin Australia CEO and managing director Paul Scurrah said.
But, he said, the company is “well-positioned to weather this storm”.
This is partly because of the Federal Government’s plan to waive $715 million worth of fees and charges for domestic airlines.
The support package will refund and waive aviation fuel excise, air service charges and domestic and regional aviation security charges.
Regional carrier Rex welcomed the support, but said more may be needed “if the health authorities' projections prove accurate”.
“If regional carriers collapse, so will many regional communities for which the air service is their lifeline,” Rex's chief operating officer Neville Howell said in an open letter this week.