Qantas cuts back flights over virus

QANTAS has announced a hiring freeze and will ask staff to take holiday and long-service leave as it slashes the number of flights to Asia amid the coronavirus outbreak.

The company says 700 jobs will be affected as it cuts Qantas and Jetstar flights into Asia by about 15 per cent and winds back domestic and New Zealand services.

It says the cuts are the equivalent of grounding 18 aircraft and will wipe $100 million to $150 million off the airline’s full-year profit haul.

The pullback on routes to China, Hong Kong, Singapore, Japan and Thailand will last until at least the end of May.

CEO Alan Joyce said the airline’s 30,000 employees would be asked to take holiday and long-service leave in order to avoid job losses.

Staff will be asked to volunteer to take leave although the airline can force workers to take it.

Mr Joyce said the group’s annual leave balance was big enough to ride out six months of the capacity cuts and it would be well placed to bounce back when the outbreak subsided.

“We can extend how long the cuts are in place, we can deepen them or we can add seats back in if the demand is there,” he said. “This is an evolving situation that we’re monitoring closely.”

The changes were announced as the airline reported a net profit of $445 million for the six months to December, down 3.9 per cent from the same period a year earlier.

Underlying profit, which strips out one-offs items, fell 0.5 per cent to $771 million.

Mr Joyce remained defiant about industrial action that prompted Jetstar to cancel 50 flights on Wednesday.

“No amount of industrial action will change our stance, because we can’t afford to lose our discipline on costs,” he said.

Mr Joyce also repeated the airline’s threat to hire rival staff to fly its planned ultra-long-haul routes.

Qantas shares rallied 5.9 per cent to $6.67 yesterday. It will pay a fully-franked interim dividend of 13.5c.