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Qantas Pushes Back Expected Restart of International Travel

Bloomberg logoBloomberg 2/25/2021 Angus Whitley
a fighter jet sitting on top of a runway: Aircraft operated by Qantas Airways Ltd.'s regional airline QantasLink stand on the tarmac at Sydney Airport in Sydney, Australia, on Thursday, June 25, 2020. Qantas will raise as much as A$1.9 billion ($1.3 billion) and cut at least 6,000 jobs as the coronavirus pandemic continues to keep carriers around the world largely grounded. © Bloomberg Aircraft operated by Qantas Airways Ltd.'s regional airline QantasLink stand on the tarmac at Sydney Airport in Sydney, Australia, on Thursday, June 25, 2020. Qantas will raise as much as A$1.9 billion ($1.3 billion) and cut at least 6,000 jobs as the coronavirus pandemic continues to keep carriers around the world largely grounded.

(Bloomberg) -- Qantas Airways Ltd. laid out an ambitious plan to resume almost all international flights from late October, betting that vaccine rollouts will help revive the world’s shattered travel industry.

Qantas aims to restart 22 of its 25 overseas routes to cities including Los Angeles, London and Johannesburg from Oct. 31, it said Thursday. Low-cost arm Jetstar will restart all its 13 international routes at the same time.

The planned resumption of global travel is four months later than Qantas anticipated last year, though it broadly aligns with the date by which Australia plans to complete its vaccination program. The U.K., further ahead with its jabs, is aiming for international trips to restart as soon as May.

“The vaccine changes everything,” Qantas Chief Executive Officer Alan Joyce said. “With the vaccine rollout already underway, we’re on the right track.”

Qantas shares jumped as much as 5.2% before trading up 2.4% at A$5.13 at 2:51 p.m. in Sydney trading.

Like airlines worldwide, Qantas’s attempts to fly even limited schedules have been repeatedly stymied by snap border closures, inside Australia and overseas. The airline’s revenue losses to the pandemic in 2020 were about A$11 billion ($8.8 billion) -- more than half its normal annual sales, Joyce said.

False Dawns

The industry’s previous hopes for a vaccine-inspired travel recovery were dashed late last year as super-infectious coronavirus variants triggered tougher quarantines for passengers. So far, the aviation industry’s proposal for test or vaccine certificates to replace mandatory isolations hasn’t gained broad traction with governments.

Qantas plans a “material increase” in flights in the Australia-New Zealand travel corridor from July. But the airline needs the Australian government to fully open the country’s international border before it can freely fly offshore. Initial capacity on international flights in October will be limited, and a full overseas recovery isn’t expected until 2024, Qantas said.

For more on aviation’s crisis:
Air Travel Quarantines Are Getting Longer and Lonelier
Brace Yourself: Long-Haul Travel Might Not Start Until 2023
Most of the World’s Pilots Are No Longer Flying for a Living

All the same, Joyce is hoping to trigger a flurry of ticket sales by giving a firm date for flights to resume.

“It’s our best estimate at the moment,” he said. “We think that October date is sensible, and hopefully conservative.”

In the UK., EasyJet Plc ticket sales more than quadrupled in the hours after Prime Minister Boris Johnson said this week that international trips may restart as soon as May 17.

Qantas is cutting at least 8,500 jobs and scything costs as part of a three-year plan to survive aviation’s biggest-ever crisis. Some 7,500 other workers will remain stood down until borders reopen, Joyce said Thursday.

Covid-19 travel restrictions drove Qantas to an underlying pretax loss of A$1.03 billion in the six months ended December from a profit of A$771 million a year earlier.

The airline’s domestic network -- long the company’s profit engine -- should reach 60% capacity this quarter and 80% in the following three months, Qantas said.

Joyce’s turnaround plan involves cutting A$15 billion in costs over three years. The airline has grounded its entire fleet of 12 giant Airbus A380s for at least three years, and has deferred a backlog of other aircraft deliveries.

(Updates with increase in New Zealand flights from July.)

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