On Friday, Qantas held its annual general meeting and announced its intentions for its domestic and international operations in the near future. The airline’s management also took the opportunity to criticise the ongoing state border closures in Australia, which has hampered the recovery of travel throughout the country.
Since the shutdown of Australia’s international borders in March of this year, followed by local state lockdowns, flight operations at Australia’s flag carrier have remained at a trickle of their pre-COVID levels. However, they have improved over the month of September due to the slow opening of Australia’s internal borders, in addition to a growing demand for intrastate travel (flights within their original state).
Despite the positive domestic news, Qantas acknowledged that demand for international travel in and out of Australia remains at almost zero. New Zealand recently opened its boarders with Australia and flights to island nation have resumed, with Australia prompting Qantas to reinstate international flights between Sydney and Auckland.
The future of Qantas International was also an important discussion topic at today’s annual general meeting. The Australian government have recently discussed the establishment of “travel bubbles” over the coming months with South Korea and Japan. Qantas chairman, Richard Goyder spoke on this topic stating that the airline is “keeping an eye on any new markets that may open up as a result of these bubbles – including places that weren’t part of our pre-COVID network.” Qantas directors conceded that, the US and European markets would take longer to return to the airline’s network, because the prevalence of COVID-19 is at much higher levels in those regions.
Qantas Group CEO, Alan Joyce appeared optimistic about the future of aviation stating, “we are getting more and more confident about the opportunities and the potential for a vaccine in helping to get those [USA and European] operations up by potentially the end of 2021.” The Qantas CEO previously stated that most international travel from Australia would be suspended until at least July 2021. At the airline’s AGM, Joyce admitted, “it will take a long time for international travel demand to recover back to pre-covid levels.”
The lack of international and travel demand, as well as closure of Australian domestic borders has lead to the Qantas Group posting a AUD$2 billion loss for the 2019-2020 financial year. Nearly all of the losses occurred during the latter half of the financial year, between March and June of 2020. To address these losses, the Qantas Group (made up of Qantas, QantasLink and Jetstar) made the decision to cut up to 6,000 employees, as well as two directors from the company board (20% of the board members). In order to help regain finances, the airline also made the tough decision to send its recently upgraded Airbus A380-800 aircraft to long-term storage in California. The airline still plans for the A380 to re-enter service in 2023. The airline also made cut backs to its office space in Sydney in order to shed some of its commercial leasing costs.
The Qantas Group is currently operating at 30 per cent of its current pre-COVID domestic schedule for October and hopes increase this by 50 per cent or more for Christmas. This is all provided that the borders of Queensland-New South Wales and New South Wales-Victoria re-open on schedule in a fortnight. This should aid the airline’s recovery and return to profitability. It is now onwards and upwards from here for Qantas, as Australia once again begins to reopen back up to the world and more locally, for domestic travel.
