Rex has confirmed it will stand down 500 frontline employees as COVID lockdowns and border closures continue to savage the aviation industry.
Australia’s biggest independent regional carrier and mainline aspirant had already grounded its Boeing 737 jets because of plummeting demand and had announced reductions to schedules until September 12.
But with COVID cases continuing to remain stubbornly high in Sydney, an extended lockdown in Melbourne and problems in regional NSW, the airline said in an ASX announcement it had been forced to “temporarily adjust” employment numbers from August 16.
The 500 frontline workers include pilots, cabin crew, engineers and airport workers as well as call center, ground and head office staff.
The lockdowns and closures have been a blow to all carriers with Qantas announcing recently it would stand down 2500 workers and Virgin Australia now also looking at suspensions.
An email from Virgin chief executive Jayne Hrdlicka did not put a number on the Virgin workers the airline would be standing down but said the airline was operating at 25 percent of its planned scheduled and expected low levels for up to 12 weeks.
She said the number of people required to work would vary from week to week.
Rex said it had consulted with unions and staff to explain why the action was necessary to protect the business and the long-term job security of employees.
This included an agreement that its flight attendants should share the remaining available work, a move deputy chairman John Sharp described as “a great example of a pragmatic and unified approach as we grapple with the devastating consequences of lockdowns and border closures”.
Sharp said all eligible full-time staff would receive income support from the federal government of $750 a week gross under the Retaining Domestic Airline Capability Assistance scheme if they did not qualify for federal government COVID-19 disaster payments.
The airline scheme is designed to support aviation workers living outside COVID hotspots and who are not eligible for the $750 a week disaster payments arrangement.
The deputy chair said the reductions would remain until September 12 “in the first instance”.
“We will monitor the situation closely and react as necessary,’’ he said.
Rex announced earlier in the week that it would lose more money than expected in the 2021 financial year because of the lockdowns.
It had previously forecast a pre-tax loss of $A15m for the financial year but said it now expected a statutory loss of $A18m due to the NSW lockdown in June.
The airline will release audited results on August 31.