Australia’s Qantas eyes December international restart

Australian airline Qantas Airways plans to restart international flights from December with Australia's Covid-19 vaccination rate reaching 80pc of its eligible population. The initial focus will be on destinations with similar vaccination rates such as the US, Canada, the UK, Japan and Singapore, as well as the Pacific island of Fiji.

Flights between Australia and New Zealand will be on sale for travel from mid-December on the assumption that some or all routes between the two countries are able to restart, Qantas said.

Flights to destinations that have low vaccination rates and high levels of infections will now be pushed out from December 2021 until April 2022. These destinations include the Indonesian island of Bali and capital Jakarta, Philippine capital of Manila, Bangkok and Phuket in Thailand, Vietnam's Ho Chi Minh city, and South Africa's Johannesburg, Qantas said. Levels of travel demand and capacity will hinge largely on government decisions on alternative requirements to mandatory hotel isolation for fully vaccinated travellers, the airline added.

International flights from Australia account for the largest share of the country's total jet fuel consumption.

Australia is expected to reach a vaccination threshold of 80pc in December, which will trigger the gradual reopening of international borders, Qantas' chief executive officer Alan Joyce said.

"We can adjust our plans if the circumstances change, which we've already had to do several times during this pandemic. Some people might say we're being too optimistic but based on the pace of the vaccine rollout, this is within reach and we want to make sure we're ready," Joyce said.

Qantas' international flying in the first half of the 2021-22 fiscal year to 30 June is expected to be at about 15pc of pre-Covid-19 levels, which mainly comprises government-sponsored freight services and repatriation flights, Qantas said. Once Australia's international borders start to reopen, the airline's international capacity is expected be at 30-40pc in the January-March quarter of 2021-22 and 50-70pc in the April-June quarter in 2021-22 compared with pre-Covid-19 levels, Qantas said.

Qantas is also looking at altering its direct flights to London from Perth in Western Australia, where the state government has a zero-Covid-19 strategy and has closed its borders to any jurisdictions with infections. Qantas has plans to fly directly to London from Darwin in the Northern Territory, Joyce said.

Qantas is also planning for the reopening of Australia's state borders to each other, with the two most populous states of New South Wales (NSW) and Victoria closed to the rest of the country because of Covid-19 outbreaks. Vaccination rates are expected to reach 70pc of the eligible population during November, enabling domestic lockdowns and border restrictions to be steadily eased, Joyce said.

Total revenue lost by Qantas since the start of the Covid-19 pandemic rose to around A$16bn ($11.6bn) and it is likely to exceed A$20bn by the end of December, Joyce said. The loss of revenue prompted Qantas to reduce operating costs by around A$1bn/yr and cut A$650mn during 2020-21, it said.

Qantas will require all of its employees to be vaccinated and around 80pc has already done so, Joyce said. The airline is also offering loyalty points and flight discounts to customers to get vaccinated against Covid-19 as a way to stimulate more demand for its flights, he said.

Fuel costs in the first half of 2021-22 are expected to be above A$309mn in the same period in 2020-21 because of higher forecast fuel consumption, Qantas said.

By Kevin Morrison