Coronavirus: Qantas expected to slash flights by up to 80pc

Qantas is on Tuesday expected to announce an 80 per cent ­reduction in flights and capacity.

Qantas CEO Alan Joyce. Picture: Adam Yip

Qantas is on Tuesday expected to announce an 80 per cent ­reduction in flights and capacity after its chief executive, Alan Joyce, warned of “major hardships ahead” that would impact on everyone.

The latest round of cuts follow new government restrictions on all overseas arrivals to Australia, and come just a week after a 23 per cent reduction in the Qantas and Jetstar flying schedule. 

In a note to staff, Mr Joyce said the significant increase in government efforts to reduce the spread of the coronavirus would “increase the dramatic decline in inter­national bookings that we’ve ­already experienced”. 

“Customers are limited in their ability to travel overseas and ­demand is evaporating as a result,” he wrote. “We’re now also seeing a substantial drop in domestic travel demand as people begin to retreat from everyday ­activities. Our corporate customers are introducing total travel bans (and) there is little indication that demand will return in the short term.

“The fact of the matter is that the Qantas Group must take ­extreme action to deal with these extreme circumstances that are outside of our control. This is a very difficult time. Understandably, people are concerned. What I can say is the ­Qantas Group ­always steps up in a crisis.”

Reductions to the network are expected to see the airline’s four-engine jets, Boeing 747s and Airbus A380s, taken out of operation, and a significant number of A330s rested as well. 

Fuel-efficient Boeing 787-9s would continue to fly on a handful of routes, including Perth-­London, to the US and possibly one or two ports in Asia. 

Pilots told The Australian the cuts would be painful for employees but it “made no sense to keep flying empty planes”. “Hopefully it will be a case of short-term pain based on reports China seems to be recovering and getting back to normal,” said one pilot. 

Virgin Australia is also expected to announce another round of cutbacks on Tuesday. 

There are concerns about the airline’s ability to survive the crisis over an extended period, and on Monday credit rating agency S&P Global downgraded Virgin Australia to B- from B+. Analysts Joel Yap and Craig Parker said the downgrade reflected the view that rapidly deteriorating conditions were spreading from the international to the domestic market.

Qantas shares have more than halved in value from $7.40 in December to $3.02 at Monday’s close.

Virgin Australia’s shares have improved marginally since last week’s 5c low, to be trading at 7c.