Qantas and Jetstar will be cutting their international flights by 90 percent due to the coronavirus.
The airlines say the drop in demand for travelling abroad as well as the travel restrictions introduced by several major countries or regions mean they have to scale back their efforts. The move is expected to last until at least the end of May.
Domestic travel will also be cut by 60 percent.
In a statement, Qantas Group said: "The precipitous decline in demand and resulting cuts to flying mean that the Qantas Group is confronted with a significant labour surplus across its operations.
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"Travel demand is unlikely to rebound for weeks or possibly months and the impact of this will be felt across the entire workforce of 30,000 people.
"The Qantas Group is working to manage this impact as much as possible, including through the use of paid and unpaid leave.
"This will be in addition to measures already announced, including three months of no pay for the CEO and Chairman, significant pay cuts for Group Executive Management and Board members, and cancelling of annual bonuses and an off-market buy back."
People with bookings up to 31 May 2020 who don't want to travel anymore will be able to cancel their flight and will get a travel credit voucher in return.
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In order for that to be processed, an application must be submitted by 31 March.
The company added: "Customers who make a new domestic or international booking and later decide they no longer wish to travel, can cancel their flight and retain the value of the booking as a Qantas travel credit or Jetstar travel voucher.
"This applies to bookings made from 10 March 2020 until 31 March 2020 for travel before 31 May 2020."
The ruling comes after the airlines warned last week that Covid-19 was going to cause issues with international travel.
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In that time, the Australian government has introduced a mandatory self-isolation rule for everyone, including Australian residents, for two weeks after returning from overseas.
America has placed a travel ban on 26 European countries, as well as the UK and Ireland, in order to stem the flow of people who could potentially be infected.
Meanwhile the UK has introduced new measures to reduce the spread of the coronavirus.
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In a statement, Prime Minister Boris Johnson said that if one person in a household shows symptoms, all of those living in the household should stay at home.
On Monday (16 March) he addressed the country, saying that social distancing is of the utmost importance, and that pubs, clubs and restaurants should be avoided at all costs.
However, he said that care homes and schools are not currently being forcibly closed, although the situation is under constant review.
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