Qantas lands planes, CEO waives payment as the coronavirus spreads
SYDNEY: He announced on Tuesday that he was landing most of his Airbus A380 fleet and his CEO would resign his salary as the airline cut international flights in response to the epidemic.
The Australian flag airline and its budget branch Jetstar will reduce international flights by almost 25 percent over the next six months, and routes to Asia and the United States will suffer the deepest cuts.
Qantas said it would land eight of its 10 two-story Airbus A380 currently in operation, as the airline replaces the largest aircraft in its fleet with smaller planes and reduces the frequency of flights.
In the last two weeks we have seen a sharp drop in reserves in our international network as the spread of the global coronavirus continues, said CEO Alan Joyce.
We expect the lower demand to continue over the next few months, so instead of adopting an unsystematic approach, we will reduce capacity until mid-September.
Joyce, Australia's highest-paid CEO who received 24 million Australian dollars (USD 15 million) in fiscal year 2018, will resign his salary for the rest of the financial year.
Other Qantas executives will receive a 30 percent salary reduction, while management will not receive any bonuses.
Staff are encouraged to take annual and unpaid vacations over the next six months, with the equivalent of 38 aircraft on the ground.
The announcement comes less than three weeks after the airline reduced flights to Asia, saying that at that time the coronavirus outbreak would affect the company's earnings by up to 150 million Australian dollars (USD 100 million) in the financial year 2020
Qantas shares have lost almost 38 percent of their value since then, falling almost 11 percent only on Monday when the stock market collapsed due to fears about the spread of the coronavirus and oil prices.
Among the changes in the routes is the suspension of Qantas flights to San Francisco from Brisbane and Melbourne, as well as the postponement of a new route between Brisbane and Chicago.
Jetstar will reduce flights across Asia, while national and New Zealand routes will also be reduced.