Qantas has announced further job cuts in its international division as the airline continues to be hit hard by the COVID-19 pandemic.
In an update to the ASX on Thursday morning, Qantas also confirmed it would impose a two-year wage freeze across its entire workforce, including management.
Pay rises will increase by 2 per cent after that period but that is less than the 3 per cent pre-COVID.
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The news follows the release of the federal budget, which indicated international borders could remain closed until the middle of 2022.
As a result, Qantas is now pushing back plans to resume overseas flights from late October to the middle of December.
There was some positive news for the airline, with strong domestic demand helping to keep them afloat.
“Our recovery strategy of targeting cash-positive flying rather than pre-COVID margins is helping increase activity levels and repair our balance sheet,” CEO Alan Joyce said.
“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. 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 re-open.
“Managing costs remains a critical part of our recovery, especially given the revenue we’ve lost and the intensely competitive market we’re in.
“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. That’s why we have aligned the date for international flights restarting in earnest with a successful vaccination program.”
Mr Joyce also emphasised the importance of a successful vaccine rollout to get travel back up and running.
“No one wants to lose the tremendous success we’ve had at managing COVID but rolling out the vaccine totally changes the equation,” said Mr Joyce.
“The risk then flips to Australia being left behind when countries like the US and UK are getting back to normal. Australia has to put the same intensity into the vaccine rollout as we’ve put on lockdowns and restrictions, because only then will we have the confidence to open up.”