Qantas Airways, Boeing 747.

King & Wood Mallesons has acted for Australian airline Qantas in its $1.3 billion capital raising as the airline raises funds to underpin its recovery from the COVID-19 crisis.

The airline's raising of A$1.86 million ($1.3 billion) consists of a A$1.36 billion institutional placement and a A$500 million share purchase plan and comes as it cuts staff numbers 6,000 and continues the stand down for 15,000 employees.

The KWM team was led by its head of Australian public M&A David Friedlander, who worked with Qantas general counsel Andrew Finch on the mandate.

"It's a difficult and choppy time in the aviation sector and this this is a very important transaction given the challenges the industry is facing," Friedlander said.

The airline is aiming to reduce costs by A$15 billion of the next three years of low activity, and to lock in ongoing cost savings of A$1 billion a year.

"All airlines — including Qantas — must take action now. We have to position ourselves for several years where revenues will be much lower. And that means becoming a smaller airline in the short term," Qantas chief executive Alan Joyce said in a speech outlining the changes.

The Qantas capital raising is the latest in a rush of equity raisings on the Australian share market as companies sought capital to bolster themselves against the economic impact of the novel coronavirus.

In May, fellow Australian airline Virgin Australia went into voluntary administration and is now being sold by administrator Deloitte.

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