Qantas Staff Asked To Take Paid Leave To Cope With Coronavirus

Qantas will ask its 30,000 employees to take paid leave to cope with the impact of coronavirus on travel, as Australia extended its restrictions on foreign nationals entering the country one more week.

Qantas has revealed it's is cutting flights, sending staff off on leave and bringing forward maintenance to cope with the virus outbreak, now called COVID-19.

CEO Alan Joyce said there is a lot of flexibility in the group to cut or add, the capacity to ride out any temporary storms.

The carrier posted an interim net profit slide to $445 million on Thursday, blaming the 3.9 per cent drop on the protests in Hong Kong, higher foreign exchange costs and global freight wars.

Qantas CEO Alan Joyce. Image: AAP

Qantas noticed a slight pick up in demand before the coronavirus struck, with the outbreak expected to cut up between $100 million to $150 million off its bottom line in the second half.

Joyce said the coronavirus has meant suspending the Sydney-Shanghai service until the end of May or longer.

"There are obviously some challenges facing us in the second half but we're confident that we can manage that impact, as we have in the past," he said.

The carrier is slashing flights to Asia by 15 per cent until the end of May and cutting trans-Tasman capacity by about 6.0 per cent.



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With less demand from corporate and leisure, it is also reducing domestic capacity by 2.3 per cent.

"We can extend these cuts, cut deeper if we need to, or add capacity back in," he said.

The cuts will leave the Qantas group with a surplus of around 700 full-time staff.

"We have 30,000 employees across the group," Joyce said.

"The way we'll manage it is to ask across the 30,000 people, for people to take annual leave, long-service leave and use their leave balances, which are quite considerable."

A Qantas planes on the runway at Sydney Airport. Image: AP

With the equivalent of 18 aircraft on the ground, maintenance will be brought forward until travel rebounds, and Joyce said it will.

Qantas group's first-half net profit of $445 million, compared with $463 million at the same time last year, came after a $119 million impact.

That was due to protests in Hong Kong, subdued demand in global freight markets and other increases in costs associated with foreign exchange rates on non-fuel costs.

Qantas also had an extra $55 million in operating costs after selling domestic airport terminals.



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After all that the underlying profit was $771 million, or 0.5 per cent down on $775 million in the prior corresponding period.

Joyce said interim revenue was 2.8 per cent higher this financial year at $9.5 billion.

He said Qantas and Jetstar did well in the domestic market despite weak demand.

"Internationally, the growth in passenger revenue outweighed the impact of disruption in Hong Kong and a freight market affected by trade wars."

"We know demand into Asia, particularly China, will rebound and we'll be able to ramp up when it does."

Travel Ban Extended To Protect Australians 

Joyce's comments come as Scott Morrison announced Australia will continue with the travel restrictions on foreign nationals entering the country for a further week to February 29.

"The continuation of the travel restrictions means that for a further week, foreign nationals – excluding permanent residents – who have been in mainland China will not be allowed to enter Australia for 14 days from the time they left mainland China," a statement from the PM read on Thursday.

"As before, Australian citizens and permanent residents will still be able to enter, as will their immediate family members (spouses, legal guardians and dependants only).

"We continue to require Australian citizens, permanent residents and their families who have been in mainland China from February 1, and who return Australia, to self-isolate for 14 days from the time they left mainland China."