Jetstar Asia to cut S'pore workforce by a quarter

Job cuts come as Qantas, which owns 49% of budget carrier, details 3-year recovery plan

Jetstar Asia chief executive Bara Pasupathi said that the "single biggest shock to the aviation industry" caused by the Covid-19 pandemic has forced tough decisions so that the airline can "remain agile while staying true to its low-cost DNA". Five A
Jetstar Asia chief executive Bara Pasupathi said that the "single biggest shock to the aviation industry" caused by the Covid-19 pandemic has forced tough decisions so that the airline can "remain agile while staying true to its low-cost DNA". Five Airbus A-320 aircraft from Jetstar Asia's fleet will be retired, reducing the budget carrier's total fleet to 13 aircraft. ST PHOTO: BENJAMIN SEETOR

Budget carrier Jetstar Asia will be reducing its Singapore-based workforce by a quarter next month, as part of "difficult but necessary decisions".

Up to 180 people across all parts of its business - 26 per cent of Jetstar Asia's employees - will be let go, even as most of the Singapore carrier's remaining staff will stay furloughed until the end of the year.

Yesterday's announcement was made as the Qantas Group, which owns 49 per cent of Jetstar Asia, detailed its post-Covid-19 recovery plan.

Spanning three years, it will include reducing the group's pre-crisis workforce by at least 6,000 people across all job roles, from baggage handlers to corporate non-flying workers.

The early retirement of some planes and possible return of leased aircraft will also lead to at least 220 pilots being let go.

Jetstar Asia chief executive Bara Pasupathi said that the "single biggest shock to the aviation industry" caused by the pandemic has forced tough decisions so that the airline can "remain agile while staying true to its low-cost DNA".

Five Airbus A-320 aircraft from Jetstar Asia's fleet will be retired, reducing the budget carrier's total fleet to 13 aircraft.

"There is no doubt that the travel market will look very different moving forward, so it is imperative that we change and adapt," Mr Pasupathi said in a statement yesterday.

"Singapore and Changi Airport remain a strategic footprint for Jetstar Asia and the Qantas Group, and we look forward to growing passenger numbers further through innovation and enhancing the customer experience in the future."

He also thanked the Singapore Government, which "acted swiftly and decisively" to support the aviation sector with its Budget measures. The aviation industry and the tourism sector are eligible for the highest tier of support provided by the Jobs Support Scheme announced in April, qualifying for 75 per cent wage support throughout the nine months that the scheme is in effect.

Qantas Group said it still expects to break even for the financial year ending in September, despite the significant reduction in revenue due to the Covid-19 pandemic. It has needed to take "swift action to reduce its cash burn as travel demand evaporated", the group said.

Qantas chief executive Alan Joyce said the airline was taking a "realistic" view that there would not be international operations of real scale until July next year, with a proposed "travel bubble" between Australia and New Zealand a potential exception.

Reuters reported yesterday that Qantas intends to raise up to A$1.9 billion (S$1.8 billion) of equity under its three-year cost saving plan.

The capital raising, at a discount of 13 per cent to the airline's last trading price, includes an underwritten A$1.36 billion institutional placement and an A$500 million share purchase plan.

  • 180

    Up to this number of people across all parts of Jetstar Asia's business to be let go, even as most of the Singapore carrier's remaining staff will stay furloughed until the end of the year.

    6,000

    Number of job cuts that will come from across Qantas' 29,000-strong workforce.

Qantas will also ground 100 aircraft for up to 12 months and retire its remaining Boeing 747 fleet immediately, six months ahead of schedule, given the travel restrictions imposed by the global health crisis.

The plan, which along with reduced fuel expenses is expected to save around A$15 billion, marks Qantas' first equity raising in just over a decade, said Reuters.

It also coincides with what was supposed to be a celebratory 100-year anniversary for the airline.

The 6,000 job cuts will come from across the airline's 29,000-strong workforce, Reuters said. A further 15,000 workers will remain furloughed until Qantas begins operating more flights.

It has begun ramping up domestic flying as state borders reopen, and expects to reach 40 per cent of normal capacity next month, an average of around 70 per cent next financial year and 100 per cent in the 2022 financial year.

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A version of this article appeared in the print edition of The Straits Times on June 26, 2020, with the headline Jetstar Asia to cut S'pore workforce by a quarter. Subscribe