Category Archives: QANTAS Airways

QANTAS adds seven new routes and puts its Dreamliners on domestic routes

VH-ZNI

QANTAS Airways has made this announcement:

Qantas customers can now book seven new domestic routes and travel on more widebody aircraft between major capital cities to help meet strong demand for domestic travel across Australia.

The new routes – Townsville to Adelaide/Melbourne/Sydney, Adelaide to Cairns/Hobart, Sydney-Uluru and Perth-Gold Coast – provide direct connections and reduce travel time for customers. They bring the total number of routes Qantas and Jetstar have added since the start of the pandemic to 45.

Five of the routes will be operated by Embraer E190 regional jets as part of QantasLink’s partnership with Alliance Airlines. The first Qantas flights operated by the 94-seat E190s took off on May 25 between Adelaide, Darwin and Alice Springs.

Customers will also see more widebody aircraft with Business Suites on flights between the East Coast capital cities into Perth and Darwin.

Usually used for long haul international flights including Perth-London, the 236-seat Boeing 787-9 Dreamliner will begin operating up to nine Sydney to Perth flights per week.

Widebody Qantas Airbus A330-200 aircraft, which serviced international routes into Asia, will operate on more flights into Darwin from Sydney and Brisbane, and also into Perth from Sydney and Melbourne. These will be added to the A330s already flying on east-west routes.

The additional flying will see Qantas’ capacity exceed 100 per cent of pre-COVID levels in the coming months and the Group’s market share around 70 per cent.

NEW ROUTES

Route Start Date Return flights per week Aircraft
Adelaide – Townsville August 2021 3 per week E190
Adelaide – Cairns August 2021 4 per week E190
Adelaide – Hobart September 2021 Up to 7 per week E190
Sydney – Townsville September 2021 7 per week E190
Melbourne – Townsville September 2021 7 per week E190
Perth – Gold Coast September 2021 3 per week B737
Sydney – Uluru March 2022 5 per week B737

The new flights add to Jetstar’s existing services across six of the routes, providing a range of travel options for Qantas Group customers.

 

ADDITIONAL WIDEBODY FLYING

Route Added or upgauged flights Aircraft Total weekly flights (all aircraft)
Sydney-Perth Up to 9 per week 787 Dreamliner 34
Up to 4 per week A330
Melbourne-Perth Up to 24 per week A330 37
Sydney-Darwin Up to 7 per week A330 12
Brisbane-Darwin Up to 3 per week A330 9

 

QANTAS GROUP ROUTES ANNOUNCED OR COMMENCED FLYING FROM JULY 2020

Route Airline
Sydney-Byron Bay Qantas
Brisbane-Tamworth Qantas
Sydney-Orange Qantas
Canberra-Gold Coast Qantas
Brisbane-Port Macquarie Qantas
Perth-Hobart Qantas
Canberra-Sunshine Coast Qantas
Canberra-Cairns Qantas
Hobart-Gold Coast Jetstar
Sydney-Merimbula Qantas
Brisbane-Hobart Qantas
Sydney-Launceston Qantas
Sydney-Mildura Qantas
Canberra-Hobart Qantas
Melbourne-Sunshine Coast Qantas
Melbourne-Newcastle Qantas
Melbourne-Merimbula Qantas
Sydney-Griffith Qantas
Melbourne-Mount Gambier Qantas
Adelaide-Mount Gambier Qantas
Melbourne-Wagga Wagga Qantas
Melbourne-Albury Qantas
Melbourne-Hamilton Island Jetstar
Perth-Onslow Qantas
Melbourne-Coffs Harbour Qantas
Brisbane-Coffs Harbour Qantas
Canberra-Ballina (Byron Bay) Qantas
Gold Coast-Auckland Qantas
Sydney-Hervey Bay Jetstar
Brisbane-Albury Qantas
Brisbane-Cooma (Snowy Mountains) Qantas
Sydney-Cooma (Snowy Mountains) Qantas
Melbourne-Burnie Qantas
Canberra-Darwin Qantas
Adelaide-Gold Coast Qantas
Cairns-Newcastle Jetstar
Melbourne-Busselton Jetstar
Auckland-Cairns Qantas

Top Copyright Photo: QANTAS Airways Boeing 787-9 Dreamliner VH-ZNI (msn 66073) PAE (Nick Dean). Image: 947836.

QANTAS aircraft slide show:

QANTAS sees a sustained rebound in domestic travel demand, expects to be cash positive in the second half of FY21

100 Centenary Scheme - "QANTAS Time Capsule Towards 2120"

QANTAS Airways has issued this financial statement:

  • Sustained domestic recovery driving strong cash generation.
  • Statutory free cash flow positive for 2H21; Jetstar Underlying EBIT positive in April.
  • Underlying EBITDA of $400-450 million expected in FY21.
  • Strong total liquidity position of $4.0 billion[1].
  • Net debt has peaked and starting to decline.
  • Forecast statutory loss before tax of more than $2 billion in FY21.
  • Qantas Loyalty returning to earnings growth in 2H21.
  • Revised assumption for phased return of material international flying from late December 2021 onwards.
  • Recovery program on track to deliver $600 million ongoing cost reduction in FY21.

A sustained rebound in domestic travel demand, and the performance of its Freight and Loyalty divisions, continues to drive the Qantas Group’s recovery from the impacts of COVID-19.

Based on current trading conditions the Group expects to be statutory free cash flow positive for the second half of FY21. Net debt levels peaked in February at $6.4 billion and are expected to be lower than they were in December ($6.05 billion) by the end of the financial year.

Liquidity levels remain strong with total funds of $4.0 billion, including cash of $2.4 billion and $1.6 billion of undrawn debt facilities as at 30 April 2021.

The total revenue loss for the Group since the start of COVID[2] is now projected to reach $16 billion by the end of FY21 – however the role of domestic travel demand in the Group’s recovery is highlighted by the fact revenue from domestic flying is expected to almost double between the first and second half of this financial year.

Assuming no further lockdowns or significant domestic travel restrictions, the Group expects to be Underlying EBITDA positive in the range of $400 – 450 million for FY21. At a statutory level before tax, the Group is still expecting a loss in excess of $2 billion, which includes the significant costs associated with previously announced redundancies, aircraft write downs and non-cash depreciation charges.

GROUP DOMESTIC

Consumer confidence in domestic travel is proving more resilient compared with earlier in the pandemic, despite the temporary tightening of some border restrictions.

A three-day lockdown in Perth during April cost the Group an estimated $15 million in EBITDA. This follows the $29 million impact from the Brisbane lockdown in late March and the Sydney (Northern Beaches) outbreak that resulted in an impact of around $400 million in EBITDA for the period.

Corporate travel, including the small business segment, continues to recover and is now at 75 per cent of pre-COVID levels[3] (up from 65 per cent in April). Leisure demand is growing strongly, with deferred international holidays converting into multiple domestic trips.

The Group is on track to reach 95 per cent of its pre-COVID domestic capacity for the fourth quarter of FY21. Qantas and Jetstar expect to average 107 and 120 per cent respectively of their pre-COVID domestic capacity in FY22.

To meet this demand, Qantas and Jetstar have now brought all domestic aircraft back into service. In addition, QantasLink has activated eight (of up to 14) Embraer E190 aircraft as part of its deal with Alliance Airlines. Jetstar is reactivating up to five Boeing 787-8s for domestic use as well as six A320s on loan from Jetstar Japan.

With the increase in domestic leisure travel demand, Qantas and Jetstar have now announced a total of 38 new routes since July last year.

GROUP INTERNATIONAL AND FREIGHT

Travel demand between Australia and New Zealand is rebuilding steadily. Several pauses and additional restrictions from both countries in response to small outbreaks have impacted confidence, leading to capacity being limited to around 60 per cent of pre-COVID levels. This is expected to gradually normalise, following a similar pattern as key domestic routes.

All of Qantas’ Boeing 787-9s and about half of its A330 aircraft are active, flying a mix of freight, repatriation and regular passenger services.

Qantas Freight continues to serve as a natural hedge for the downturn in international passenger travel and the cargo capacity that it normally brings. Freight is expected to exceed the revenue it achieved in the first half of FY21.

The Group has revised its expectations for the return of a significant level of international flying from end-October 2021 to late December 2021 (except Trans Tasman). This is in line with the Australian Government’s revised timeline for effective completion of the national COVID-19 vaccination program, and the Qantas Group is optimistic that the opportunities for additional travel bubbles with other countries will increase significantly from that point. We will continue to liaise with the Australian Government and adjust our planning assumptions as necessary.

The net cash cost of carrying the international division has improved with the two-way Trans Tasman travel bubble and strong performance from Freight, dropping from $5 million per week to around $3 million.

QANTAS LOYALTY

The Loyalty division continues to perform well, with strong revenue from partners and high engagement from members. It has returned to growth, with second half earnings expected to be higher than the first half of FY21 and the prior corresponding period in FY20.

Redeeming Qantas Points for domestic and now Trans Tasman flights is increasing in popularity, with redemption levels 85 per cent higher in April 2021 compared to the same month pre-COVID.

Status match promotions to attract more high tier members since late 2020 have now resulted in almost 20,000 applications from Gold or Platinum equivalent flyers from other airlines.

RECOVERY PROGRAM

The Group’s target of at least $1 billion in annual cost reduction by FY23 is well on track, with $600 million to be delivered this financial year.

Recent developments include:

  • Ninety per cent of redundancies associated with the 8,500 job losses (already announced) are complete, with the remainder finalised by the end of FY21.
  • A two-year wage freeze will apply to the next round of enterprise agreements across the Group, with 2 per cent annual increases after that compared with 3 per cent pre-COVID. Management will be subject to these same wage conditions.
  • As part of reducing its costs of sale, Qantas will lower front-end commissions paid to travel agents on international tickets from 5 per cent to 1 per cent. The change won’t take effect until July 2022, giving time for the industry to adapt. Travel agents remain an important partner and Qantas will work them on broader revenue opportunities, particularly through technology.
  • The offer of voluntary redundancy for Qantas international cabin crew. This will be run as an expression of interest program and is expected to generate several hundred applications, with the total number accepted to be balanced against retaining key capability for the longer term. This is in addition to job losses already announced.

Of approximately 22,000 roles across the Group, some 16,000 are currently stood up, including all domestic crew, all corporate employees and some international crew.

CEO COMMENTARY

Qantas Group CEO Alan Joyce said:

“We have a long way still to go in this recovery, but it does feel like we’re slowly starting to turn the corner.

“It’s great to see so many of our people now back at work and the majority of our fleet back in the air. Our recovery strategy of targeting cash-positive flying rather than pre-COVID margins is helping increase activity levels and repair our balance sheet.

“The fact we’re making inroads to the debt we needed to get through this crisis shows the business is now on a more sustainable footing. The main driver is the rebound of domestic travel, which now looks like it will be bigger than it was pre-COVID, at least until international borders re-open.

“Jetstar was profitable on an underlying EBIT basis in April, which was largely due to strong leisure demand over Easter and school holidays, but it’s an important sign that we’re on the right path.

“Managing costs remains a critical part of our recovery, especially given the revenue we’ve lost and the intensely competitive market we’re in.

“We’ve adjusted our expectations for when international borders will start opening based on the government’s new timeline, but our fundamental assumption remains the same – that once the national vaccine rollout is effectively complete, Australia can and should open up. That’s why we have aligned the date for international flights restarting in earnest with a successful vaccination program.

“No one wants to lose the tremendous success we’ve had at managing COVID but rolling out the vaccine totally changes the equation. The risk then flips to Australia being left behind when countries like the US and UK are getting back to normal.

“Australia has to put the same intensity into the vaccine rollout as we’ve put on lockdowns and restrictions, because only then will we have the confidence to open up.”

 

[1] As at 30 April 2021

[2] FY19 is used as a proxy for pre-COVID performance

[3] Based on May weekly intakes.

Top Copyright Photo: QANTAS Airways Boeing 787-9 Dreamliner VH-ZNJ (msn 66074) (100 Centenary) LHR (SPA). Image: 948896.

QANTAS aircraft slide show:

QANTAS is set to operate a Supermoon scenic flight on May 26

100 Centenary Scheme - "QANTAS Time Capsule Towards 2120" - Best Seller

QANTAS Airways has made this announcement:

Cosmic cocktails and supermoon cakes will be on the menu when Qantas launches a one-off B787 Dreamliner supermoon scenic flight to offer a limited number of passengers a closer viewing of the upcoming supermoon later this month.

It will be the second and last supermoon for 2021 and also coincides with a full lunar eclipse, making it a rare double phenomenon, with the moon expected to turn red against the night sky.

CSIRO astronomer Dr Vanessa Moss will work with the pilots to design the optimal flight path over the Pacific Ocean and also join the flight to provide insights into supermoons and all things space and astronomy.

The flight will depart from, and return to, Sydney and is the latest in a series of special flights Qantas has operated for travelers eager to take to the skies while the industry recovers.

Chief Customer Officer Stephanie Tully said Qantas is committed to coming up with unique flying experiences, especially while travel options are limited.

“We have been absolutely overwhelmed with the popularity of our special flights. The recent mystery flights sold out within 15 minutes with hundreds of people on waiting lists and they keep telling us they want more,” Ms Tully said.

“We are very excited to now be doing a supermoon scenic flight and the 787 has the largest windows of any passenger aircraft so it’s ideal for moon gazing. We think this flight has great appeal for anyone with a passion for astronomy, science, space photography, aviation or just keen to do something a little ‘out of this world’.”

Video:

The three-hour flight will depart from Sydney and begin with a scenic flyover of Sydney Harbour before climbing above any potential cloud cover and atmosphere pollution to a cruising altitude of 43,000 feet – the maximum cruising altitude of a Dreamliner – for supermoon and full lunar eclipse viewing.

The Moon will be at its closest point or perigree, coming within 357,311 kilometres of Earth at 11:50am AEST on Wednesday 26 May. The total lunar eclipse will occur between 9:11pm and 9:25pm AEST, when the Moon is 357,462 km from Earth.

The flight will operate with net zero emissions, with 100% of emissions carbon offset.

Just over 100 seats go on sale via Qantas.com at midday Wednesday 12 May 2021 with fares starting from $499 for economy (with a Qantas Points earn of 1,500 points plus 20 Status Credits), $899 for premium economy (Qantas Points earn of 2,500 and 40 Status Credits)  and $1,499 for business (4,000 Qantas Points earn plus 80 Status Credits).

The flight will operate with Fly Well procedures in place.

Top Copyright Photo: QANTAS Airways Boeing 787-9 Dreamliner VH-ZNJ (msn 66074) (100 Centenary) PAE (Nick Dean). Image: 948008.

QANTAS aircraft slide show:

QANTAS to use five Embraer 190s from Alliance Airlines at Adelaide

QANTAS Airways has made this announcement:

  • Qantas to activate a further five E190 jets
  • Aircraft to be based in Adelaide, creating hundreds of jobs
  • New routes, extra 1 million seats in and out of Adelaide

Adelaide will be the home of five Embraer E190 aircraft as Qantas continues to boost domestic flights in response to growing leisure and corporate travel demand.

The E190s are 94-seat jets with a five-hour range which are being deployed on Qantas’ network as part of a three-year deal with Alliance Airlines. The deal provides the national carrier with the capacity provided by up to 14 jet aircraft, depending on market conditions. This announcement brings the number of aircraft activated as part of the agreement to eight.

The aircraft will be painted in QantasLink livery and will help Qantas to grow its domestic capacity to 107 per cent of pre-COVID levels in FY22.  Jetstar is expected to reach 120 per cent of its pre-COVID capacity as the only dedicated low cost carrier in Australia and the uptick in local leisure demand.

Note: The aircraft will be operated by Alliance Airlines.

NETWORK

The decision means Qantas will launch a new Adelaide-Gold Coast service in time for the winter school holidays.

From June 25, 2021, South Australians will be able to fly direct to the Gold Coast with Qantas, with four return services per week, increasing to daily during school holiday peaks. To celebrate the launch Qantas is offering special fares from $149 one-way*.

A number of additional routes from Adelaide will be announced in the coming weeks.

Qantas will also begin flying between Darwin and Canberra using E190 aircraft from June 21, 2021.

The two new routes bring the total number Qantas and Jetstar have announced since the start of the pandemic to 38, responding to the fact more Australians are holidaying domestically.

The five E190 aircraft can carry almost 1 million additional passengers to-and-from Adelaide each year.

The use of E190s will also free up Qantas’ Boeing 737-800 aircraft to be redeployed across the domestic network. All Qantas domestic crew have returned to flying.

Qantas is also today announcing a number of capacity increases for South Australia, including an additional daily return flight from Adelaide to Sydney and Melbourne.

The national carrier will also more than double services between Adelaide and Mt Gambier from five to 12 flights per week from July 1, 2021.

Route Map – June 2020:

Top Copyright Photo:

QANTAS and Jetstar to resume flights to New Zealand

Jetstar Airways (Australia) Boeing 787-8 Dreamliner VH-VKH (msn 36233) DPS (Pascal Simon). Image: 943879.

QANTAS Airways and Jetstar Airways will restart flying to all pre-COVID 19 destinations in New Zealand when the two-way Trans-Tasman bubble opens later this month.

The national carrier will also launch two new routes direct from Auckland to Cairns and the Gold Coast, providing travelers with more options for holidays in Queensland and New Zealand.

From April 19, 2021, Jetstar and QANTAS will initially operate up to 122 return flights per week across the Tasman on 15 routes, offering more than 52,000 seats each week.

As part of the existing one-way bubble, the Qantas Group has been operating less than 3 per cent of its pre-COVID capacity on the Trans-Tasman. Flights announced will see this increase to 83 percent – a level that reflects a high level of expected demand for what will be Australia’s only international destination for at least the next six months, moderated by the fact that international tourists (beyond Australia and New Zealand) normally account for about 20 percent of the passengers flying between the two countries.

QANTAS and Jetstar schedules

Jetstar will initially operate to Auckland from Melbourne, Gold Coast and Sydney using its Airbus A320 aircraft, with schedules of both airlines connecting on to Jetstar’s New Zealand domestic network of more than 120 return flights per week to five destinations. Jetstar will resume flights on the remainder of its pre-COVID routes from the middle of the year.

QANTAS’ schedule includes year-round direct flights to Auckland, Wellington, Christchurch and Queenstown including direct flights from Brisbane and Melbourne to Queenstown, routes which Qantas traditionally only operated seasonally for the ski season peak.

A new daily service from the Gold Coast to Auckland will commence when the bubble opens, marking QANTAS’ first ever international flights from Gold Coast Airport. The new Cairns-Auckland route will launch in time for the June long weekend, operating three days per week. Flights will initially operate for nine weeks until late July, and Qantas will look to add more flights beyond this period if there is demand.

QANTAS will initially operate a mix of Boeing 737-800s as well as the wide-body Airbus A330s.

Jetstar and QANTAS will look to grow capacity and the number of routes as the market recovers.

Top Copyright Photo: Jetstar Airways (Australia) Boeing 787-8 Dreamliner VH-VKH (msn 36233) DPS (Pascal Simon). Image: 943879.

Jetstar aircraft slide show:

QANTAS and Jetstar prepare to resume international flights in October

QANTAS Airways has made this announcement:

  • Flights to most international destinations to now resume late October 2021
  • Trans-Tasman flying to ramp up from July 2021
  • New flexibility for international bookings, with unlimited flight date changes

QANTAS Airways and Jetstar Airways are now planning to restart regular international passenger flights to most destinations from October 31, 2021 – a four month extension from the previous estimate of July, which had been in place since mid-2020.

The date change aligns with the expected timeframe for Australia’s COVID-19 vaccine rollout to be effectively complete.

Capacity will be lower than pre-COVID levels, with frequencies and aircraft type deployed on each route in line with the projected recovery of international flying. International capacity is not expected to fully recover until 2024.

The Group remains in close consultation with the Federal Government around the reopening of international borders and will keep customers updated if further adjustments are required.

QANTAS is assessing the use of digital health pass apps to help support the resumption of COVID-safe international travel. The CommonPass and IATA Travel Pass smartphone apps are being trialled on the airline’s international repatriation flights.

QANTAS network

QANTAS is planning to resume flights to 22 of its 25 pre-COVID international destinations including Los Angeles, London, Singapore and Johannesburg from October 31, 2021.

QANTAS won’t initially resume direct flights to New York, Santiago and Osaka, but remains committed to flying to these three destinations. In the meantime, customers will be able to fly to these destinations under codeshare or oneworld arrangements with partner airlines.

Jetstar network

Jetstar plans to resume flights to all of its 13 international destinations. Frequencies will be adjusted in line with the projected recovery of international flying.

Trans-Tasman

QANTAS and Jetstar are planning for a significant increase in flights to and from New Zealand from July 1, 2021.

The Group has the ability to respond to travel bubbles that may open.

  • Underlying Loss Before Tax: $1.03 billion
  • Statutory Loss Before Tax: $1.47 billion
  • $6.9 billion revenue impact from COVID-19 crisis in HY21 (down 75%)
  • Underlying operating cash flow: $1.05 billion
  • Total liquidity of $4.2 billion, providing capital for restructuring and buffer against uncertainty
  • Domestic airlines generating positive underlying cash flow
  • Losses in Qantas International offset by record Qantas Freight performance
  • Continued strong cash generation by Qantas Loyalty
  • Restructuring program on track to deliver $0.6 billion in cost benefits in FY21
  • International flying now aiming to restart end-October 2021

The Qantas Group has continued to navigate the impacts of the COVID crisis as it positions the company for recovery and balance sheet repair.

In the six month period – which covered Victoria’s extended lockdown and nationwide border closures – the Group managed to limit a $6.9 billion drop in revenue into a $1.03 billion Underlying Loss Before Tax.

The Group generated Underlying EBITDA of $86 million, reflecting the fundamental resilience of the portfolio.

The Group’s Statutory Loss Before Tax was $1.47 billion. This included further redundancy and restructuring costs of $284 million (in addition to the $642 million provided for in FY20) and a further $71 million write down of the A380 fleet in-line with its Australian dollar market value.

CEO COMMENTS                                                                                          

Qantas Group CEO Alan Joyce said: “These figures are stark but not surprising.

“During the half we saw the second wave in Victoria and the strictest domestic travel restrictions since the pandemic began. Virtually all of our international flying and 70 per cent of domestic flying stopped, and with it went three-quarters of our revenue.

“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.

“Qantas Loyalty still had significant income because the program has evolved to the stage where the vast majority of points are earned from activity on the ground. 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.

“These factors couldn’t overcome the massive impact of this crisis, but they have softened it.

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.

“Our priorities remain the safety of everyone who travels with us, getting as many of our people back to work as possible and generating positive cash flow to repair our balance sheet.

“The COVID vaccine rollout in Australia will take time, but the fact it’s underway gives us more certainty. More certainty that domestic borders can stay open because frontline and quarantine workers will be vaccinated in a matter of weeks. And more certainty that international borders can open when the nationwide rollout is effectively complete by the end of October.”

GROUP DOMESTIC

The Group’s domestic flying operations across Qantas, QantasLink and Jetstar generated positive underlying cashflow despite a circa 70 per cent decline in both revenue and capacity.

Underlying EBITDA was positive $71 million, with depreciation and amortization taking this to an EBIT loss of $407 million.

Improved planning processes have allowed rapid network and schedule changes that minimize exposure to sudden border closures and maximize revenue opportunities within a patchwork of restrictions. Twenty-three new domestic routes were announced in response to changing demand patterns as people looked for opportunities to travel within Australia. More new routes are planned in the second half.

Continued demand from the resources sector provided strong cashflow, with four additional Airbus A320s moved to Western Australia to support growth.

Broader restructuring will deliver significant and ongoing unit cost improvements across Qantas and Jetstar, with further cost reductions to be realized in the second half.

The Group’s domestic market share rose to around 70 per cent, helped by the addition of more than 20 large corporate accounts as well as growth in small-to-medium enterprises choosing Qantas in particular.

Both Qantas and Jetstar saw extremely strong leisure demand during periods when travel restrictions eased. Jetstar saw a trebling of bookings in November, with more than 250,000 bookings during sale activity.

GROUP INTERNATIONAL AND FREIGHT

Continued border closures meant international operations remained largely grounded throughout the first half, resulting in an Underlying EBITDA loss of $86 million for Group International, with depreciation and amortization taking this loss to $549 million. This was mostly driven by the cost of carrying the assets in these businesses but partly offset by a record performance by Qantas Freight.

The lack of passenger flights has created a temporary global shortage of space for cargo at a time when e-commerce is also surging – which Qantas Freight has been able to capitalize on. While this will ease when more international passenger services resume, much of the increased demand for e-commerce is expected to continue.

Qantas Freight received its first of three Airbus A321 freighters in October, taking its total operational fleet to 19. In addition, some of the Group’s passenger A330s and 787s are being used for freight-only operations.

Repatriation services operated on behalf of the Australian Government, plus flights to New Zealand as part of a one-way bubble arrangement, meant the Qantas Group operated 8 per cent of its pre-COVID flying – providing important operational readiness for the eventual opening of borders.

Jetstar airlines in Asia had their own COVID-related impacts, which couldn’t be softened to the same extent as Australian-based parts of the Group. In response, cash outflows and fleet sizes are being reduced, including six A320 aircraft from Jetstar Japan that will be relocated to the Australian domestic market given opportunities locally for cash positive flying.

QANTAS LOYALTY

Qantas Loyalty generated a strong cash contribution of $454 million despite limitations on travel redemptions and a 10 per cent decline in total credit card spending on Qantas Points Earning Credit Cards – two of its main revenue drivers.

Underlying Earnings Before Interest and Tax were $125 million (down 29 per cent versus pre-COVID).

Loyalty’s performance showed the benefits of diversifying the program in recent years, as well as high levels of engagement from members continuing to earn points on the ground.

Qantas health insurance grew in a generally static market and an expansion into home insurance was launched in December 2020. Shifts in consumer behavior during lockdown saw record revenue for Qantas Wine (up 74 per cent) and the Qantas Rewards Store (up 41 per cent).

Frequent Flyers continue to prioritize using their points for travel, with record levels of redemptions for flights (up 2.5 times) when domestic travel restrictions eased in November. A further spike is expected once international travel resumes, which will also drive earnings.

Qantas Loyalty signed multi-year deals with three of the major banks, including a significant expansion with Commonwealth Bank to be rolled out later this calendar year. A new and much broader partnership with Accor will also launch in mid-2021.

LOOKING AFTER CUSTOMERS

Looking after customers remains core, with a focus on creating COVID-safe environments across Qantas and Jetstar and offering high levels of flexibility to help offset uncertainty on borders. Recent initiatives and improvements include:

  • Fly Well – using technology to minimize physical contact at airports; social distancing in lounges; providing masks and sanitizing wipes on board; and enhanced cleaning throughout. (The allied Work Well program applies COVID-safe principles for employees in both frontline and office-based roles.)
  • Fly Flexible – offering unlimited date changes on all Qantas domestic and international fares through to at least February 2022, removing the biggest barrier to booking while border uncertainty persists.
  • Rewarding loyalty – a further 12 month status retain offer for Frequent Flyers; offering status match to high-tier members of other airline programs; and increasing the number of reward seats on domestic flights by 50 per cent.
  • Better value – extending complimentary drinks service on all Qantas domestic flights, in addition to existing inclusions like free Wi-Fi on 737s; eligible customers have access to 35 domestic lounges compared to the main competitor’s seven; Jetstar domestic fares as low as $19.
  • Extension of flight vouchers – Qantas has extended credit vouchers to enable travel until 31 December 2023 on domestic or international flights, with Jetstar doing the same for vouchers issued due to COVID-19 disruptions.
Jetstar Airways aircraft slide show:

QANTAS and Jetstar add flights as Western Australia eases restrictions

QANTAS Airways has made this announcement:

Qantas and Jetstar will operate more than 65 additional return flights from Perth to Melbourne and Sydney each week following the Western Australian Government’s decision to ease border restrictions.

The extra flights commence from December 14, 2020 compared with just nine return flights currently operated by the airlines each week. Qantas flights to Perth from Sydney and Melbourne are increasing from around five per week to almost five times daily.

The Qantas Club at Perth Airport will reopen in early December, joining the Business Lounge which is already open.

In the wake of the COVID-19 pandemic, Qantas has introduced a number of initiatives to help customers to book with greater flexibility, including allowing a flight to be moved free of charge, as well as introducing additional health and safety measures  through its Fly Well program.

QANTAS to outsource around 2,000 ground handling jobs at 10 airports

QANTAS Airways has made this announcement:

QANTAS has notified around 2,000 employees that it will move to outsource ground handling operations at 10 airports across Australia as it works to recover from the COVID crisis.

In August, the airline announced its reasons for needing to restructure its ground handling operations, which includes baggage handling and aircraft cleaning, and commenced a review of external bids from specialist ground handlers and in-house bids from employees and their representatives.

The bids were required to meet the following objectives:

  • Reducing the overall cost of ground handling operations (as QANTAS anticipated it could save approximately $100 million annually, based on pre-COVID levels of flying, through the use of third-party providers)
  • Avoiding large spending on ground handling equipment such as aircraft tugs and baggage loaders ($80 million over five years)
  • Better matching our ground handling services, and their cost, with fluctuating levels of demand.

The Transport Workers Union (TWU) submitted a bid on behalf of employees in accordance with terms in the enterprise agreement. Teams from some individual airports submitted local proposals. Unfortunately, none of these bids met the objectives.

QANTAS granted three separate extensions to the original deadline for the bid following requests by the TWU, doubling the total period to 12 weeks.

Their resulting national bid was, by their own admission, ‘theoretical’ with no roadmap of how projected cost savings would be achieved. For instance, the proposal resulted in 1 million surplus labour hours – or around 900 roles – but no details on how to deal with that surplus.  It also did not meet the objectives relating to capital expenditure on ground services equipment nor matching the ground handling services (and their cost) to fluctuating levels of demand.

While proposals from employees at various ports did include detailed plans that would save around $18 million, there remained a significant gap compared to what was offered by third party providers.

A number of external bidders, some of whom already provide these services at 55 airports across Australia, were able to meet all of the objectives, including reducing annual costs by approximately $103 million. The preferred bidders are being notified today and, subject to consultation and finalising contract terms, transition is intended to occur in the first quarter of 2021.

As required under its enterprise agreement, QANTAS will now consult with its ground handling employees and their representatives on the next steps. Affected employees will be entitled to a redundancy package and given support to transition to new jobs outside the business. It’s expected that there will be a range of opportunities for some impacted team members with suppliers in the sector as travel demand gradually recovers.

Jetstar has already transitioned its ground handling operations at six airports to external suppliers – a decision that was announced at the same time QANTAS announced its review process.

In August, we also announced a separate proposal to outsource crew bus services in-and-around Sydney Airport, potentially affecting around 50 employees. This review process is ongoing with a decision expected before the end of the year.

This announcement follows a $2.7 billion statutory loss for the Group in FY20 due to COVID-19 and associated border restrictions. Further significant losses are projected in FY21 due to a drop of revenue in excess of $10 billion. Since the beginning of the pandemic, the QANTAS Group has taken on in excess of $1.5 billion in additional debt.

This announcement unfortunately brings job losses across the Group as a result of the COVID crisis and associated border closures to around 8,500 of its 29,000 pre-COVID workforce.

Comments from Qantas Domestic and International CEO Andrew David:

“This is another tough day for QANTAS, particularly for our ground handling teams and their families. We thank every one of them for their professionalism and contribution over the years supporting our customers and operations.

“Unfortunately, COVID has turned aviation upside down. Airlines around the world are having to make dramatic decisions in order to survive and the damage will take years to repair.

“While there has been some good news recently with domestic borders, international travel isn’t expected to return to pre-COVID levels until at least 2024. We have a massive job ahead of us to repay debt and we know our competitors are aggressively cutting costs to emerge leaner.

“The TWU’s in-house bid claimed that significant savings could be made but it failed to outline sufficient practical detail on how this might be achieved, despite us requesting this information multiple times throughout the process. Even with the involvement of a large accounting firm, the bid falls well short of what the specialist external providers were able to come up with.

“We have used these specialist ground handlers at many Australian airports for decades and they’ve proven they can deliver a safe and reliable service more efficiently than it’s currently done in-house. This isn’t a reflection on our people but it is a reflection of economies of scale and the urgent need we have because of COVID to unlock these efficiencies.”

 

QANTAS RESPONSE TO THE TRANSPORT WORKERS UNION’S CLAIMS

 

UNION CLAIM – These specialist ground handlers are unsafe.

FACT – This is not true and ignores the fact they have been safely supporting Qantas’ operations (as well as other airlines) at airports around the country, in some cases for decades. Outsourced ground handlers are required to abide by Qantas Group policies and procedures. The data shows that external ground handlers are no less safe and in some cases their safety performance is better. Take aircraft loading, which is a core part of what ground handlers do. An average of 0.4 aircraft damage events per 1000 flights for outsourced operations compared with 0.8 for Qantas staffed airports.

UNION CLAIM – The in-house bid process is a sham process.

FACT – The TWU requested that this process be added to the enterprise bargaining agreement back in 2012 and it has been approved by the union and employees in two subsequent agreements. At the request of the TWU, the deadline for the bid was extended on three separate occasions, allowing a total period of over 12 weeks.

Over the past three months we have provided the TWU with access to extensive data, met with them on nine occasions and thoroughly considered and costed their proposals. 23 employees were released on full pay to prepare the in-house bid.

Extracts from 2012 Workplace Determination:

[68] The TWU seeks the insertion of what is described as “the ACTU Protocol” – a revised version of a protocol dealing with contracting out and outsourcing developed first in 1996.


[69] The TWU contends that the key feature of the clause is the requirement to provide an opportunity for employees to prepare an in-house bid to demonstrate that savings can be generated without outsourcing.

UNION CLAIM – This is really about lowering workers’ wages and conditions.

FACT – This is not true. This has never been about employee terms and conditions – it is about overall efficiencies. Specialist ground handlers charge on a ‘per aircraft turn’ basis, which costs us around 40 per cent less than doing the work in house. This is due to their economies of scale and the fact that they can spread overheads and equipment costs over the many airlines they serve.

UNION CLAIM – QANTAS has violated the intent of the JobKeeper scheme, and abused taxpayers money. They should pay it back.

FACT – The lion’s share of Government support we’ve received has been through JobKeeper, which has been a lifeline for our employees who were stood down. We have fully complied with the spirit and purpose of JobKeeper – including recognising when jobs aren’t coming back and making those jobs redundant.

The rest of the government support was used to maintain critical domestic and international air services – which in turn generated paid work for our people.

The TWU’s demand that QANTAS pay back government support such as JobKeeper would require us to claw it back from their members – which makes no sense.

In June, while the majority of our employees were receiving JobKeeper, Prime Minister Scott Morrison said it was obvious that jobs would have to go: “These jobs have been lost because of the coronavirus. This is the COVID-19 recession. And for a business like QANTAS, that is about flying planes around the world, when you can’t do that, that has an obvious impact.”

QANTAS Airways aircraft photo gallery:

CNN: QANTAS CEO says passengers will need to be vaccinated for international flights

From CNN:

“Australia’s national carrier Qantas will require future international travelers to prove they have been vaccinated against Covid-19 before flying.
The airline’s CEO Alan Joyce said in an interview with CNN affiliate Nine News on Monday that the move would be a “necessity” when coronavirus vaccines are readily available.
Joyce said the airline was looking at changing its terms and conditions to “ask people to have a vaccination before they get on the aircraft.”

QANTAS and Jetstar boost flights to the Sunshine State

 

QANTAS Airways and Jetstar Airways will operate more than 1200 extra return flights into the Sunshine State from New South Wales and Victoria in the lead up to Christmas, following the decision by the Queensland Government to lift border restrictions.

From December 1, 2020, the two airlines will operate more than 250 return flights per week across seven routes from Sydney. This compares with just 36 return flights per week currently.

Pending a final decision from the Queensland Government, QANTAS and Jetstar will also operate more than 160 flights per week from Melbourne from December 1. Jetstar will also operate four weekly services from Avalon to the Gold Coast from January.

The easing of border restrictions means both airlines will reinstate more than 10 routes which had been suspended providing more choice and a mix of premium and leisure travel.

The additional flights will return the Qantas Group’s flying schedule to around 60 percent of pre-COVID levels by Christmas. Both airlines will continue to monitor demand closely and look to add more flying as required.

Current route map:

Airline Route Current weekly return flights Weekly return flights December Lead-in fare (one-way)
Qantas Sydney-Brisbane 25 63 $199
Jetstar Sydney-Brisbane 4 44 $85
Qantas Sydney-Gold Coast 0 8 $153
Jetstar Sydney-Gold Coast 4 64 $69
Qantas Sydney-Hamilton Island 0 4 $233
Jetstar Sydney-Hamilton Island 0 7 $129
Qantas Sydney-Cairns 0 7 $236
Jetstar Sydney-Cairns 3 24 $144
Jetstar Sydney-Sunshine Coast 0 12 $79
Jetstar Sydney-Townsville 0 7 $124
Jetstar Newcastle-Gold Coast 4 4 $61
Jetstar Sydney-Proserpine 0 3 $109
Jetstar Melbourne-Proserpine 0 4 $146
Qantas Melbourne-Brisbane 0 28 $225
Jetstar Melbourne-Brisbane 0 35 $122
Qantas Melbourne-Gold Coast 0 7 $192
Jetstar Melbourne-Gold Coast 0 44 $114
Qantas Melbourne-Cairns 0 4 $287
Qantas Melbourne-Sunshine Coast 0 7 $199
Jetstar Melbourne-Sunshine Coast 0 15 $113
Jetstar Melbourne-Townsville 2 7 $125
Jetstar Avalon-Gold Coast 0 4 $99

In other news, QANTAS on November 23 operated its first flight between Mildura and Sydney, coinciding with the opening of the New South Wales border to Victoria.

The route was originally scheduled to start in March but was delayed due to COVID-19 and travel restrictions.

Flights will operate four days per week with the airline’s 50-seat Q300 turboprop aircraft, offering more than 20,000 seats on the route each year.

The new service will be the only direct connection between Sydney and Mildura, saving travellers around two hours compared to flying via Melbourne.

QantasLink also operates direct flights between Mildura and Melbourne.

QANTAS aircraft photo gallery: