Aviation

Jetstar CEO to step down as Qantas promises $5,000 boost to employees and more domestic capacity cuts

Qantas has revealed Jetstar CEO Gareth Evans will step down alongside a spate of big announcements including a $5,000 boost for employees.

After 23 years at Qantas, including time as chief financial officer, CEO of Qantas International and, since 2017, CEO of Jetstar, Evans has decided this is the right moment to move on and will be stepping down in December.

Qantas CEO Alan Joyce said Evens was a “superb leader”.

“He’s given an incredible amount to the organisation in several key roles, from his time as CFO through major restructuring and most recently as Jetstar CEO as we navigated COVID,” Joyce said.

“We spend a lot of time developing our internal talent pipelines for succession opportunities like this and we’ll be appointing a new Chief Executive for Jetstar soon.”

The news was revealed in a market update by Jetstar’s parent company, Qantas, alongside a promised $5,000 boost for up to 19,000 EBA-covered employees across the group as part of a new enterprise agreement.

The payment will be made to employees once a new enterprise agreement covering them is finalised, following a two-year wage freeze.

This payment also comes on top of 1,000 share rights awarded to non-executive employees – worth around $4,500 per person at today’s share price – as part of a Recovery and Retention program announced earlier this year. These shares will vest in August 2023 if key conditions are met.

Joyce said the one-off payment acknowledged the sacrifices Qantas staff had made, including long periods of no work and no annual wage increases.

“It’s been a tough few years for everyone in aviation but we promised to share the benefits of the recovery once it arrived. Today’s announcement is part of that,” he said.

“This comes at a time when travel demand is rebounding but our people are facing a unique set of cost of living pressures, which frankly they’d be in a better position to handle if aviation hadn’t been so badly hit over the past two years. That’s now changing.

“We can’t afford to permanently increase salaries beyond the two per cent threshold we’ve set, but we can afford to make this one-off payment on top of the Qantas share rights we’ve already given.”

The market update revealed Qantas’ net debt – which rose to more than $6.4 billion as the company borrowed heavily to survive the pandemic – had fallen well below pre-COVID levels to around $4.0 billion.

Travel demand remains strong and the Group said it was on track to return to profit in FY23.

The Qantas Group has announced cumulative losses of around $6 billion since the start of the pandemic and expects to post another significant annual loss for FY22 but has seen a material improvement in the second half of the year as travel demand rebounds.

The airline also announced it would adjust its domestic capacity for much of FY23 to combat rising fuel prices.

For July and August, an additional 5 percentage points of capacity will be removed on top of the 10 per cent announced in May.

This total 15 per cent cut will also be applied to September. A cut of 10 percentage points will be applied to schedules from October through to the end of March 2023.

This brings the Group’s planned domestic flying down to 106 per cent of pre-COVID levels for the second quarter of FY23 and 110 per cent for the third quarter.

The customer impacts from these schedule changes are expected to be minimal, with capacity being removed mostly from high-frequency routes. Those affected will be contacted directly with alternatives as close as possible to their original timing, usually within 1-2 hours.

There are no changes to the Group’s international capacity plans, with flying steadily increasing from around 50 per cent of pre-COVID levels currently to around 70 per cent by the end of the first quarter of FY23 to help meet demand. This growth will continue as additional A380s are returned to service, with total Group international capacity reaching 90 per cent of pre-COVID levels by the fourth quarter of FY23.

Qantas also announced plans to start direct flights from Perth to Jakarta and Perth to Johannesburg in November 2022. This brings the total number of new destinations the national carrier has added since Australia’s borders reopened late last year to eight.



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