Aviation

Joyce “optimistic” about recovery as Qantas renews trade partnerships

Qantas has signed off on new multi-year agreements with 10 of the top 12 agencies, according to a market update released this morning.

The airline did not name the agencies it has partnered with, but Helloworld has revealed it recently renewed its partnership with Qantas with a new three-year commercial agreement to sell the national carrier’s fares and products until 2023.

Webjet has also announced the renewal of its partnership with the national carrier, announcing a three-year partnership with Qantas.

“Qantas continues to work with travel agencies to reduce its selling costs while also creating better selling opportunities for these important partners,” the airline said.

The airline said it expects to begin repairing its balance sheet during the second half of FY21.

That is, assuming there are no more domestic border closures and international travel returns by the end of June 2021.

“There’s been a rush of bookings as each border restriction lifted, showing that there’s plenty of latent travel demand across both leisure and business sectors,” Qantas CEO Alan Joyce said.

“Between Qantas and Jetstar, there were over 200,000 fares sold for flights to Queensland in 72 hours after the border openings with Sydney and Victoria were announced. We’re also seeing people booking several months in advance, which reflects more confidence than we’ve seen for some time.

“Bringing domestic capacity back to almost 70 per cent in December is very positive compared to where we’ve been, and so is seeing more of our people back at work. But overall the Group is still a long way off anything approaching normal.

Joyce said international travel is likely to remain at a standstill until at least July next year and will take years to fully recover.

“Which means we’re carrying the overhead for billions of dollars worth of aircraft in the meantime. We’re also facing a revenue drop of at least $11 billion this financial year alone compared to pre-COVID,” he said.

“Overall, we’re optimistic about the recovery but we’re also cautious given the various unknowns. We also have a lot of repair work to do on our balance sheet from the extra debt we’ve taken on to get through the past nine months.

“That’s why we remain focused on delivering on our recovery program, which unfortunately involves following through on some hard decisions to restructure and respond to the new set of circumstances we’re faced with.”

Qantas also revealed the recent increase in domestic travel has seen the number of full-time equivalent roles increase from around 9,000 in October to 11,500 in December; this is expected to increase to around 14,000 in Quarter Three.

Currently, approximately 13,500 roles remain stood down.

Last week, the airline confirmed it has axed at least 2,420 employees across Qantas and Jetstar, on top of the 6,000 job cuts already announced, and would save the group an estimated $100 million in operating costs each year.

The latest job cuts were a result of the airline choosing to outsource ground handling operations at 10 airports across Australia.

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