March 9, 2020 / 9:37 PM / 21 days ago

BRIEF-Qantas Airways Announces Further Cut To International Flying

March 10 (Reuters) - Qantas Airways Ltd:

* QANTAS GROUP UPDATE ON CORONAVIRUS RESPONSE

* ANNOUNCED FURTHER CUTS TO ITS INTERNATIONAL FLYING, REDUCING CAPACITY BY ALMOST A QUARTER FOR NEXT SIX MONTHS

* DOMESTICALLY, QANTAS AND JETSTAR CAPACITY REDUCTIONS WILL BE INCREASED FROM 3 PER CENT TO 5 PER CENT THROUGH TO MID-SEPTEMBER 2020

* ADDITIONAL CHANGES WILL BRING TOTAL INTERNATIONAL CAPACITY REDUCTION FOR QANTAS, JETSTAR FROM 5% TO 23% VERSUS SAME TIME LAST YEAR

* BIGGEST REDUCTIONS REMAIN FOCUSSED ON ASIA, NOW DOWN 31 PER CENT COMPARED WITH SAME PERIOD LAST YEAR

* GROUP’S TOTAL CAPACITY REDUCTION CHANGES FROM 4 PER CENT (ANNOUNCED ON 20 FEBRUARY) TO 17 PER CENT FOR LAST QUARTER OF FY20

* RATHER THAN EXIT ROUTES ALTOGETHER, CO WILL USE SMALLER AIRCRAFT & REDUCE FREQUENCY OF FLIGHTS TO MAINTAIN OVERALL CONNECTIVITY

* START OF QANTAS’ NEW BRISBANE-CHICAGO ROUTE WILL BE DELAYED FROM 15 APRIL TO MID-SEPTEMBER.

* JETSTAR WILL MAKE SIGNIFICANT CUTS TO ITS INTERNATIONAL NETWORK

* FURTHER TWO A380S ARE UNDERGOING SCHEDULED HEAVY MAINTENANCE AND CABIN UPGRADES, LEAVING TWO OF ITS A380S FLYING

* FOR REMAINDER OF FY20 GROUP CEO WILL TAKE NO SALARY

* CAPACITY REDUCTIONS TO U.S DOWN 19%, UK DOWN 17% AND TRANS-TASMAN DOWN 10 % WILL ALSO BE MADE IN LINE WITH FORWARD BOOKING TRENDS

* FOR REMAINDER OF FY20 QANTAS BOARD WILL TAKE A 30 PER CENT REDUCTION IN FEES

* FOR REMAINDER OF FY20, GROUP EXECUTIVE MANAGEMENT WILL TAKE A 30 PER CENT PAY CUT.

* EIGHT OF AIRLINE’S LARGEST AIRCRAFT, AIRBUS A380, TO BE GROUNDED UNTIL MID- SEPTEMBER

* FOR REMAINDER OF FY20 ASKING ALL QANTAS AND JETSTAR EMPLOYEES TO TAKE PAID OR UNPAID LEAVE IN LIGHT OF REDUCED FLYING ACTIVITY

* EXPECT LOWER DEMAND TO CONTINUE FOR NEXT SEVERAL MONTHS

* “WE RETAIN FLEXIBILITY TO CUT FURTHER OR TO PUT CAPACITY BACK IN AS THIS SITUATION DEVELOPS.

* GROUP’S FY20 TOTAL FUEL COST IS NOW EXPECTED TO BE $3.74B3 WITH LIMITED PARTICIPATION TO FURTHER FALLS IN BRENT CRUDE PRICES

* MATERIAL DROP IN FUEL PRICE HAS PROVIDED A SIGNIFICANT COST BENEFIT IN ADDITION TO SAVING FROM LOWER CONSUMPTION

* QANTAS AND JETSTAR WILL WAIVE CHANGE FEES FOR NEW INTERNATIONAL BOOKINGS MADE FROM MARCH 10 UNTIL END OF MARCH

* DECIDED TO CANCEL OFF- MARKET BUYBACK ANNOUNCED IN FEBRUARY, WHICH WILL PRESERVE $150 MILLION IN CASH

* EXISTING SYDNEY-SINGAPORE-LONDON RETURN SERVICE WILL BE TEMPORARILY RE-ROUTED TO BECOME SYDNEY-PERTH- LONDON SERVICE FROM 20 APRIL

* DISRUPTION TO DOMESTIC PASSENGERS IS EXPECTED TO BE MINIMAL GIVEN CONTINUED HIGH FREQUENCY ON MOST ROUTES.

* START OF CO’S NEW BRISBANE-CHICAGO ROUTE WILL BE DELAYED FROM 15 APRIL TO MID-SEPTEMBER

* GROUNDING 38 QANTAS AND JETSTAR AIRCRAFT ACROSS INTERNATIONAL AND DOMESTIC NETWORK Source text for Eikon: Further company coverage:

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