Qantas chief executive Alan Joyce told reporters on Wednesday that he had received offers from foreign pilots at mainland Chinese airlines to operate its ultra-long-haul ‘Project Sunrise’ flights should the Australian flag-carrier fail to reach a new industrial agreement with its pilot’s union. Hundreds of foreign pilots in China are currently grounded on unpaid leave owing to the COVID-19 Coronavirus outbreak with no end in sight and rumours of major bankruptcies on the cards.
Joyce was speaking as the airline presented it H1 2020 results in Mascot, Sydney. Underlying profit before tax for the period fell by just 0.5 per cent to A$771 million despite disruption from last year’s protest movement in Hong Kong, weakened freight demand and fluctuating currency exchange rates.
But Qantas warned it could be set to lose as much as A$150 million as a result of the novel Coronavirus outbreak in its full-year results. To offset the losses, Qantas plans to trim capacity across its network – until the end of May, the cuts are the equivalent of grounding 18-aircraft, or 700 full-time jobs.
Joyce told reporters the airline would be offering more voluntary unpaid leave and had frozen recruitment to “help ride this out”.
How Qantas is responding to the COVID-19 outbreak
- The novel Coronavirus outbreak could estimated to cost Qantas between A$100 million and A$150 million
- Qantas to reduce flights between Australia and New Zealand by 5 per cent
- Domestic capacity to be trimmed by 2 per cent
- Flights to Hong Kong, Singapore and Japan to be cut by as much as 50 per cent.
- Total Asia capacity cut by 15 per cent.
- Airbus A380 will be swapped out for a Boeing 787 on Melbourne to Singapore flights due to lack of demand
A slump in demand for flights to Hong Kong, Singapore and Japan had not yet affected routes to the United States or the United Kingdom, Joyce revealed and he remained optimistic that demand would “rebound”.
He also told reporters that “good progress” had been made on ‘Project Sunrise’ – the airline’s plan to fly non-stop ultra-long-haul flights between Sydney and Melbourne to London, Paris and New York.
Qantas has until the end of March to confirm the project after selecting the Airbus A350-1000 at its preferred aircraft. The European aerospace giant has given Qantas more time to greenlight the project pending a deal being reached with its pilot’s union.
Last week, a leaked memo from Tino La Spina, head of international services at Qantas revealed the airline was considering hiring a cheaper cadre of pilots to solely operate Project Sunrise in order to circumvent demands being made by the AIPA pilot’s union.
Joyce seemed to back up this threat, suggesting the glut of grounded foreign pilots at mainland Chinese airlines had given Qantas the upper hand in negotiations.
La Spina told pilots in the memo that the airline would approach them directly if they failed to reach a deal with the union. Should pilots vote against the proposals, Qantas would consider hiring cheaper pilots.
