Qantas has announced that it will be reducing flights as well as executive pay as part of its cost-cutting measures amidst the coronavirus outbreak.
Australian flagship carrier Qantas initiated cost-cutting measures, which included removing a quarter of all flights for the next six months and significantly lowering executive pay.
As part of the initiative, the airline's chief executive officer (CEO) Alan Joyce will forgo a salary while Chairman Richard Goyder will stop taking management fees. Also, the executive leadership team will take a 30% pay cut.
Most of the canceled flights will be in Asia, where the coronavirus outbreak originated and remains rampant. Flights in the region have been cut by 31% while capacity will also be reduced in the US and UK.
Qantas also mentioned that its budget airline, Jetstar, will also "make significant cuts to its international network." The total reduction in flights represent a 23% decrease in overall capacity for the carrier.
Prior to the announcement, Qantas already reduced its flight schedule, but it has expressed its stand to take more "decisive action to mitigate the significant adverse impact of [the] coronavirus."
In a statement, Joyce said: "In the past fortnight we've seen a sharp drop in bookings on our international network as the global coronavirus spread continues."
"We expect lower demand to continue for the next several months, so rather than taking a piecemeal approach we're cutting capacity out to mid-September. This improves our ability to reduce costs as well as giving more certainty to the market, customers and our people," he explained.
In February, Qantas warned that the financial impact of the coronavirus outbreak could cost it up to $99 million. In order to avoid job cuts, the airline plans to freeze hiring activities as well as ask employees to use up leave.
Qantas forecasts the impact of the outbreak to hit between 100 and 150 million Australian dollars for the financial year once the flight cuts to the region have been accounted for.
