MIAMI – Yesterday, Qantas (QF) announced its intentions to resume international operations in late October and an increase in Trans-Tasman flights in July.
Since March of 2020, QF’s international network has been cut by 90% due to government travel restrictions and the overall rise of COVID-19.
The airline is expecting travel restrictions and COVID-19 case numbers to fall as vaccines become available in Australia. As with many analysts, however, the airline is not expecting the travel industry to recover until 2024.
In line with the market projections for the industry’s recovery, QF’s frequencies, capacity and aircraft selection for routes will be chosen to reflect current market conditions.
Along with QF, JetStar (JQ), a subsidiary of the Qantas Group, is preparing to resume international operations as well.
Qantas plans to resume international operations to select destinations, including Los Angeles, London, Singapore, and Johannesburg.
The airline, however, will not immediately begin flying to New York City, Osaka, and Santiago. QF stated that they are still committed to eventually resuming operations to the stated destinations. JQ, an airline that predominantly operated flights in the Oceania region pre-COVID-19, will resume all 13 of its international routes.
In addition, the Group is planning to ramp up its operations to New Zealand in July of this year. During the past year, QF has focused heavily on domestic and freight operations to make up for the international losses.
Qantas’ Outlook in Numbers
The airline also announced its half-year financials, posting an underlying loss of US$1bn before taxes. The Group is looking forward and preparing to work on recovering its balance sheet as it prepares for a much-needed recovery in the travel industry.
Despite a dramatic 70% drop in revenue and capacity, Qantas, QantasLink, and JetStar generated a positive cashflow.
Domestic operations accounted for the Group being able to maintain a steady cash flow. The Group improved their domestic operations planning process and were able to rapidly grow and shift operations when travel restrictions called upon them to do so.
The high level of flexibility allowed the airline to respond quickly to the ever-changing travel restrictions imposed by the Australian government. In total, 23 new domestic destinations were announced by the Group. These were added as a response to market and demand changes. In addition,
Qantas Freight managed to make up for the Group’s international sector showing a whopping US$549m loss. As with many airlines, QF dramatically increased freight operations to match the growing demand of e-commerce shipments using converted Boeing 787 and Airbus A330 freighter aircraft.
In addition, QF Freight took delivery of their first of three Airbus A321Fs to handle freight in Australia and surrounding regions.
The airline has managed to put itself in a position to take full advantage of expected recovery later this year by minimizing costs, trimming excess expenses, and remaining extremely flexible to market conditions.
Alan Joyce’s Comments
Chief Executive Officer of Qantas, Alan Joyce, stated, “Despite the huge challenges, these results show the Group’s underlying strength. When we had the opportunity to fly domestically, we saw significant pent up travel demand and generated positive cash flow.”
He continued, “Qantas Freight had a record result and has been a natural hedge to the lack of international passenger flying, which has created a shortage of cargo space globally.”
“We’ve maintained a high level of liquidity because we were quick to cut costs and because we’ve been able to raise debt and equity.
“This gives us the breathing room to deal with the levels of uncertainty we’re still facing, and funding for the restructuring that will ultimately speed up our recovery.”
Featured Photo: Ervin Eslami/Airways