Aviation

Qantas outlines international restart strategy, as group suffers $1.7bn loss

Huntley Mitchell

Huntley Mitchell

The Qantas Group has provided more detail on preparations for restarting its international flights, with plans linked to the vaccine rollout in Australia and key overseas markets.

On current projections, Australia is expected to reach the National Cabinet’s ‘Phase C’ vaccination threshold of 80 per cent in December 2021, which would trigger the gradual reopening of international borders.

Similarly, key markets like the UK, North America and parts of Asia have high and increasing levels of vaccination.

This makes them highly likely to be classed as low-risk countries for vaccinated travellers to visit and return from under reduced quarantine requirements, pending decisions by the federal government and entry policies of other countries.

This creates a range of potential travel options that Qantas and Jetstar are now preparing for, but the group noted that they will be adjusted accordingly if those assumptions change or dates move.

The group said flights to destinations that still have low vaccine rates and high levels of COVID infection will now be pushed out from December 2021 until April 2022, including Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg.

It noted that travel demand – and therefore, capacity levels – will hinge largely on government decisions on alternative requirements to mandatory hotel isolation for fully vaccinated travellers.

Assuming current projections hold and the 80 per cent vaccine threshold is met in December, Qantas and Jetstar plan to trigger a gradual restart.

From mid-December 2021, flights would start from Australia to COVID-safe destinations, which are likely to include Singapore, the US, Japan, the UK and Canada using Boeing 787s, Airbus A330s, and 737s and A320s for services to Fiji.

Flights between Australia and New Zealand will be on sale for travel from mid-December 2021 on the assumption some or all parts of the two-way bubble will restart.

Qantas expects its ability to fly non-stop between Australia and London to be in even higher demand post-COVID.

The airline is investigating using Darwin as a transit point, which has been Qantas’ main entry for repatriation flights, as an alternative (or in addition) to its existing Perth hub given conservative border policies in Western Australia.

Five A380s will return to service ahead of schedule. These would fly between Sydney and LA from July 2022, and between Sydney and London (via Singapore) from November 2022.

The Qantas Group noted that the A380s “work well” on these long-haul routes when there’s sufficient demand, and the high vaccination rates in both markets would underpin this.

Qantas will extend the range of its A330-200 aircraft to operate some trans-Pacific routes such as Brisbane-Los Angeles and Brisbane-San Francisco. The group noted that this involves some technical changes which are now being finalised with Airbus.

Flights to Hong Kong will restart in February and the rest of the Qantas and Jetstar international network is planned to open up from April 2022, with capacity increasing gradually.

Qantas is also planning to take delivery of three 787-9s (new aircraft that have been in storage with Boeing) during FY23 to operate additional flights to key markets as demand increases.

Furthermore, Jetstar is set to take delivery of its first three Airbus A321neo LR aircraft from early FY23, the extended range of which will free up some of its 787s to be redeployed in other markets.

Image source: iStock/CraigRJD

The unveiling of the airlines’ international restart strategy coincided with the announcement of the Qantas Group’s FY21 results, which revealed a $1.7 billion statutory loss after tax – slightly better than the $1.9 billion hit in FY20.

Overall revenue for the group slid 58 per cent to $5.9 billion in the 12 months to 30 June 2021, while underlying earnings before interest, taxes, depreciation and amortisation dropped a whopping 83 per cent to $410 million.

Qantas Group CEO Alan Joyce said the loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier.

“The trading conditions have frankly been diabolical,” he said.

“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue.

“We’ve had to make a lot of big and difficult structural changes to deal with this crisis, and that phase is mostly behind us. As a result, we’re geared to recover quickly, in line with a national vaccine rollout that is speeding up.

“Things remain tough, especially for thousands of our people waiting to return to their jobs when borders open and hopefully stay open.

“Our focus is getting them back to work as soon as possible, which is why we were ramping up our flying and adding new destinations before the most recent lockdowns.”

Joyce said that despite the uncertainty ahead, the group is in “a far better position” to manage the COVID crisis than this time last year.

“We’re able to move quickly when borders open and close. We’re a leaner and more efficient organisation. And our requirement for all employees to be vaccinated will create a safer environment for our people and customers,” he said.

“When Australia reaches those critical vaccination targets later this year and the likelihood of future lockdowns and border closures reduces, we expect to see a surge in domestic travel demand and a gradual return of international travel.

“I’d like to specifically recognise everyone across this company for dealing with a huge amount of upheaval due to this crisis, and showing enormous commitment and professionalism in the process.

“Our people maintained an absolute focus on safety and on serving our customers, who have likewise been extremely understanding as we’ve all gone through this difficult period.”


Featured image source: iStock/PomInOz


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