Australia’s Qantas delays target date for international flights

Qantas Airways Ltd says it has pushed back its target for a widespread resumption of international travel from Australia by four months until the end of October when the country’s vaccination programme is expected to conclude.

The airline grounded its international fleet last March and a domestic recovery has been hampered by state border closures, leading to a 75 percent fall in revenue to 2.33 billion Australian dollars ($1.9bn) in the six months to December 31.

Qantas on Thursday said it swung to a 1.03 billion Australian dollar ($821m) first-half underlying loss before tax, its most closely watched financial measure, compared with a 771 million Australian dollar ($614m) profit a year earlier.

The airline is cutting at least 8,500 jobs and cutting 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, Qantas Chief Executive Alan Joyce said.

Its shares rose as much as 5 percent in early trading to the highest levels since December, with Jefferies analyst Anthony Moulder citing the airline’s strong cash flow and liquidity.

Joyce said it was in close consultation with the Australian government about the outlook for resuming international flights.

“If things change, so will our dates,” Joyce told reporters. “But with the vaccine roll-out already under way, we’re on the right track and that October date seems sensible and in some ways conservative.”

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

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.

Australia on Sunday began vaccinating its citizens against COVID-19, having had fewer than 29,000 infections and 909 deaths since last March, lower than most comparable countries.

Preparing for takeoff

Qantas previously placed international tickets on sale from July 1 but has pushed that back to October 31, with the exception of flights to New Zealand.

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

Joyce said Qantas was forecasting international capacity would be only 40 percent of pre-COVID levels in the 2022 financial year, and a full recovery was not expected until 2024, in line with global estimates.

Qantas has said it will require international travellers to be vaccinated in order to board flights.

In the domestic market, where Qantas normally earns the bulk of its profit, capacity has been running well below pre-pandemic levels due to state border closures that it expects will cost 350 million to 450 million Australian dollars ($279m-359m) of earnings before interest, tax depreciation and amortisation in the second half.

The airline forecasts it will operate 80 percent of its usual domestic capacity in the fourth quarter ending June 30, up from 60 percent in the third quarter.

Qantas had 4.2 billion Australian dollars ($3.3bn) of cash as of December 31 to help it weather ongoing uncertainty in market conditions.