Qantas slashes global capacity to USA and Europe, grounds A380s

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The airline had previously reduced flights, particularly from Australia to a number of Asian countries, in response to the Coronavirus situation, in late February.

As a result, Qantas is seeing not only fewer passengers flying to Singapore, but none flying through Singapore to London or back.

Qantas aircraft are seen on the tarmac at Melbourne International Airport in Melbourne, Australia. A further two A380s are undergoing scheduled heavy maintenance and cabin upgrades, leaving two of its A380s flying.

Qantas said Tuesday it was grounding most of its Airbus A380 fleet and its CEO would forgo his salary as the airline slashed worldwide flights in response to the coronavirus epidemic.

It's even worse for people flying on Jetstar, with the airline suspending all flights from Melbourne to Bangkok from 1 May, while cutting the number of flights to Japan by nearly 40 per cent from 20 May and Vietnam by over 50 per cent from 1 May.

Domestically, Qantas and Jetstar capacity reductions will be increased from 3 per cent to 5 per centthrough to mid-September 2020, in line with broader economic conditions.

Qantas' capacity reduction for the June quarter will rise to 17%, up from 4% at the time of its interim results.

Given the size and uncertain nature of this situation, Qantas is unable to provide meaningful guidance at this time and the impact it will have on the remainder of the 2020 financial year.

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The Australian airline also said on Tuesday it is cancelling plans for a A$150 million ($98.73 million) off-market share buyback to preserve cash.

The single bright spot in the announcement was the drop in fuel price.

Airbus had set that deadline on the basis the production slots were potentially valuable and could be sold to other airlines, Joyce said.

He said the business was trying to reduce costs while giving certainty to customers.

To avoid job losses and redundancies, all Qantas and Jetstar staff have been asked to take either paid or unpaid leave.

In response to this unfolding situation - Qantas (ASX: QAN) - Australia's premier airline, today announced a number of additional cuts to its global flying program as well as some key changes to its renumeration processes.

"We expect lower demand to continue for the next several months so rather than taking a piecemeal approach we are cutting capacity out to mid-September", Qantas chief executive Alan Joyce said in a statement. "But we know it will pass, and we'll be well-positioned to take advantage of opportunities when it does", the CEO summarized.

Joyce said that with revenue falls airlines need to cut costs, and reducing the amount of flying we do is the best way for us to do that.

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