Qantas Airways will now halt all international flights until the end of May and is sending two-thirds of its workforce on leave.
The extreme measures come as the Australian government told its citizens not to travel abroad and all non-Australians will be banned from entering from Friday.
After announcing capacity cuts on an almost daily basis recently, it is now in full crisis mode.
It will delay dividend payments and is seeking financing to service its AS$4 billion a year wage bill.
“This is a terrible day that we have to make these decisions on the survival of the national carrier,” Qantas CEO Alan Joyce said.
“I never thought as a CEO I would have to stand down two-thirds of our people and maybe more if this continues this way.”
Joyce has agreed to forgo his entire salary this year and now other executives will do the same.
However the airline’s future is not in doubt.
“We have one of the healthiest balance sheets out there so we will have plenty of liquidity to last a very, very long time,” Joyce said.
Qantas is cutting 60% of domestic flights but will maintain essential air services to regional destinations as much as possible, it said.
The airline is grounding a total of 160 planes.
It is asking staff to use up their paid leave and will offer leave at half pay and advance leave, although it hasn’t ruled out forcing some workers to take unpaid leave.
Qantas is in talks with Woolworths and other companies to secure temporary positions for some of its furloughed staff.
Woolworths has seen sales surge due to panic buying.