Views Article – Sharenet Wealth

Australasia, News

Qantas To Raise Up To A$1.9 Bln, Cut At Least 6,000 Jobs

June 25 (Reuters) – Qantas Airways Ltd:

* EQUITY RAISING OF UP TO $1.9 BILLION

* ISSUE PRICE FOR NEW SHARES UNDER PLACEMENT OF $3.65

* THREE YEAR STRATEGY TO GUIDE RECOVERY AND RETURN TO GROWTH IN CHANGED MARKET

* AROUND 100 AIRCRAFT TO BE GROUNDED FOR UP TO 12 MONTHS

* AROUND 100 AIRCRAFT TO BE GROUNDED FOR UP TO 12 MONTHS

* COSTS REDUCED BY $15 BILLION DURING THREE YEAR PERIOD OF LOWER ACTIVITY; $1 BILLION IN ONGOING COST SAVINGS PER ANNUM FROM FY23.

* REDUCING GROUP’S PRE-CRISIS WORKFORCE BY AT LEAST 6,000 ROLES ACROSS ALL PARTS OF BUSINESS

* IMMEDIATE FOCUS OF PLAN IS TO RIGHTSIZE GROUP’S WORKFORCE, FLEET AND OTHER COSTS

* CONTINUING STAND DOWN FOR 15,000 EMPLOYEES, PARTICULARLY THOSE ASSOCIATED WITH INTERNATIONAL OPERATIONS, UNTIL FLYING RETURNS

* HAVE TO POSITION OURSELVES FOR SEVERAL YEARS WHERE REVENUE WILL BE MUCH LOWER

* IMMEDIATE FOCUS OF PLAN IS TO RESTRUCTURE TO DELIVER ONGOING COST SAVINGS AND EFFICIENCIES ACROSS GROUP’S OPERATIONS

* RETIRING QANTAS’ SIX REMAINING 747S IMMEDIATELY, SIX MONTHS AHEAD OF SCHEDULE

* A321NEO AND 787-9 FLEET DELIVERIES HAVE BEEN DEFERRED TO MEET GROUP’S REQUIREMENTS

* PROPOSED NON-OPERATIONAL JOB LOSSES OF AT LEAST 1,450, MAINLY IN CORPORATE ROLES, DUE TO LESS FLYING ACTIVITY

* INSTITUTIONAL PLACEMENT TO RAISE ABOUT $1,360 MILLION AND NON-UNDERWRITTEN SPP OF UP TO $500 MILLION

* FURTHER 2,900 PILOTS WILL BE ON STAND DOWN FROM JULY 2020 ONWARD

* AROUND 8,000 EMPLOYEES EXPECTED TO HAVE RETURNED TO WORK BY END OF JULY THIS YEAR

* GROUP’S FUEL WAS FULLY HEDGED FOR SECOND HALF OF FY20, AND 90% HEDGED FOR FIRST HALF OF FY21

* COST OF IMPLEMENTING PLAN IS ESTIMATED AT $1 BILLION, WITH MOST OF THIS REALISED DURING FY21

* SEES DECLINE IN CONSUMPTION TO JUNE 2021 WILL LEAD TO NON-CASH RECOGNITION OF HEDGE INEFFECTIVENESS OF $550-$600 MILLION IN FY20 STATUTORY RESULT

* GROUP EXPECTS TO REPORT A FULL YEAR RESULT BETWEEN BREAKEVEN AND A SMALL UNDERLYING PROFIT BEFORE TAX

* EMPLOYEES RETURNING TO WORK TO INCREASE TO AROUND 15,000 BY END OF CALENDAR YEAR 2020

* BOARD HAS DECIDED TO REVOKE INTERIM DIVIDEND, AVOIDING OUTFLOW OF $201 MILLION OF CASH

* ALAN JOYCE AGREED TO REMAIN QANTAS GROUP CEO AS RECOVERY PLAN IS IMPLEMENTED AND THROUGH TO AT LEAST FY23-END Source text for Eikon: Further company coverage:


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