Qantas will slash international flights by 90 per cent until the end of May in a fresh round of coronavirus-related cuts equivalent to grounding 150 aircraft.
Qantas and Jetstar announced on Tuesday the additional, deeper reductions in their domestic and international flying schedules as travel bans intensify and consumers bunker down amid widening quarantine measures.
The national carrier’s total international capacity will now be cut by 90 per cent from the end of March to at least the end of May, up from a 23 per cent fourth-quarter reduction announced last week.
Group domestic capacity will be cut by 60 per cent until at least the end of May - up from 5.0 per cent.
The route-by-route detail of the changes across Qantas and Jetstar’s schedule is being worked through and will be announced in coming days.
The accelerated flight cuts come after government announced at the weekend international travellers to Australia are required to self-isolate for 14 days upon arrival.
Tourism Minister Simon Birmingham said at the weekend that airlines had enough cash reserves to remain viable for now, but did not rule out a bailout to stop Qantas and other carriers going under.
“Not having airlines in Australia is not negotiable but the airlines at present tell me and assure me they are viable,” he said.
Airlines around the world are reeling as containment measures tighten in an attempt to halt the spread of the virus.
Companies have slashed flight schedules and jobs, have frozen executives’ pay and are seeking government aid as border restrictions tighten.
Air New Zealand announced on Tuesday it would cut 13 routes to Australia and would run just 20 per cent of regular trans-Tasman capacity.
It will take off from Wellington and Christchurch for Australia just twice a week; to Sydney. It’s not ruling out further cuts.
Virgin Australia on Friday suspended full-year earnings guidance as it also flagged further reductions in its Los Angeles, Japan and trans-Tasman services, as well as announcing the exit of Auckland services to and from Tonga and the Cook Islands. Meanwhile, shares in Regional Express entered a trading halt for unspecified reasons on Tuesday.
The company said the halt will remain until Thursday or until it makes a sooner announcement.
Qantas said on Tuesday its previously announced flight cuts in place from the end of May to mid-September remain in place.
They are likely to be increased, depending on demand, which it expects to be subdued for “weeks or possibly months”.
The airline also flagged the “precipitous decline” in demand and resulting cuts meant it was confronted with a significant “labour surplus”.
Qantas said it was working to manage the impact on its 30,000-strong workforce as much as possible, including through the use of paid and unpaid leave.
Some domestic passenger aircraft will be used for freight-only flights to replace lost capacity from regular scheduled services.
Qantas’ fleet of freighters will continue to be fully utilised.
The company had already announced a three-month pay freeze for chief executive Alan Joyce and chairman Richard Goyder, significant pay cuts for executive management and board members, the cancelling of annual bonuses, and an off-market buyback.
Qantas on Sunday announced that customers with new and existing bookings on domestic and international flights would be given the option to cancel and receive travel credit.
The changes are available for Qantas, Jetstar and QantasLink flights and apply until March 31 for travel until May 31.
Qantas shares spiked at the open but soon lost ground and at one stage were hovering just above Monday’s more than three-year low of A$2.83.
Qantas shares have shed nearly two thirds of their value since hitting a record high A$7.46 in December.
