Category Archives: QANTAS Airways

QANTAS Airways parks its five Boeing 747-400 ERs

Type Retired: March 29, 2020 (flight QF28 SCL-SYD with VH-OEE)

QANTAS Airways, due to the coronavirus and sudden downturn in travel, has decided to park its five remaining Boeing 747-400 ERs. Previously it was planning to retire the type in February 2021. The airline hopes to operate some Boeing 747 revenue flights later this year when traffic returns.

On Thursday, March 26, 2020, a QANTAS Boeing 747-400 ER performed a flypast over Sydney Harbour before landing at SYD as a final salute to its hometown.

The last revenue flight (for now) was flight QF28 from Santiago, Chile to Sydney today (March 29). The flight was operated with the pictured Boeing 747-406 ER VH-OEE (top). Flight QF28 arrived in Sydney at 1730 (5:30 pm) local time on Sunday, March 29, 2020.

QANTAS previously retired the standard Boeing 747-400 in October 2019.

"City of Canberra", delivered on July 30, 1971

Above Copyright Photo: QANTAS Airways Boeing 747-238B VH-EBA (msn 20009) (Bruce Drum Collection). Image: 944371.

QANTAS has been an operator of the Boeing 747 since 1971. The first 747-238B (VH-EBA), named “Canberra” (above), was delivered to the airline on July 30, 1971 and arrived in Sydney on August 16, 1971. The type was introduced on the Sydney-Melbourne-Singapore route.

The 1995 blue version of "Nalanji Dreaming"

Above Copyright Photo: QANTAS Airways Boeing 747-338 VH-EBU (msn 23223) (Nalanji Dreaming) SYD (John Adlard). Image: 930000.

QANTAS has operated the 747-200B, 747SP (below), 747 Combi, 747-300 (above), 747-400 and the 747-400 ER.

"City of Gold Coast - Tweed" - Delivered on January 19, 1981

Above Copyright Photo: QANTAS Airways Boeing 747SP-38 VH-EAA (msn 22495) (Boeing – Christian Volpati Collection). Image: 944958.

When Cyclone Tracy devastated the city of Darwin on Christmas 1974, QANTAS established a world record for the most people ever carried on a single aircraft when it evacuated 673 people on a single Boeing 747 flight.

The first Boeing 747-400 arrived in 1989.

Top Copyright Photo: QANTAS Airways Boeing 747-438 ER VH-OEE (msn 32909) LAX (Michael B. Ing). Image: 931607.

QANTAS Airways aircraft slide show:

QANTAS Group secures $1.05 billion in additional funding, secured by seven Dreamliners

QANTAS Group has made this announcement:

The QANTAS Group has completed a new round of debt funding, securing $1.05 billion in additional liquidity to strengthen its position as it manages through the Coronavirus outbreak.

This debt has been secured against part of the Group’s fleet of unencumbered aircraft[1], which were bought with cash in recent years. The loan has a tenure of up to 10 years at an interest rate of 2.75 percent.

David Gray /Getty Images for Qantas

This funding increases the Group’s available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available.

The Group’s net debt position remains at the low end of its target range, at $5.1 billion, with no major debt maturities until June 2021. In line with the rest of the QANTAS debt book, the new funding contains no financial covenants.

With a further $3.5 billion in unencumbered assets, the QANTAS Group retains flexibility to increase its cash balance as a prudent measure in the current climate. As previously announced, various steps have been taken to significantly reduce activity levels and costs given the dramatic revenue impact of the Coronavirus pandemic and the related travel restrictions on Jetstar and Qantas passenger services.

QANTAS Group CEO Alan Joyce said: “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances. Everything we’re doing at the moment is focused on guaranteeing the long term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”

[1] Seven of the Group’s 11 wholly-owned Boeing 787-9s have been securitised against this funding.

QANTAS Airways aircraft photo gallery:

 

QANTAS and Jetstar to suspend scheduled international flights, all A380s. 747s and Dreamliners grounded

QANTAS Group has made this announcement:

  • QANTAS and Jetstar to suspend scheduled international flights from late March, following latest government travel advice; some ongoing ad hoc services possible.
  • 60 percent reduction to domestic flights, focused on cutting frequency.
  • Two-thirds of employees to be temporarily stood down to preserve as many jobs as possible longer term.
  • Payment of $201 million shareholder dividend deferred until September 2020.

The QANTAS Group has outlined the customer and employee impact of a huge drop in travel demand triggered by the public health response to the Coronavirus crisis.

Earlier this week, cuts to 90 percent of international flying and about 60 per cent of domestic flying were announced by QANTAS and Jetstar. With the Federal Government now recommending against all overseas travel from Australia, regularly scheduled international flights will continue until late March to assist with repatriation and will then be suspended until at least the end of May 2020. As the national carrier, Qantas is in ongoing discussions with the Federal Government about continuation of some strategic links.

More than 150 aircraft will be temporarily grounded, including all of QANTAS’ A380s, 747s and 787-9s and Jetstar’s 787-8s.  Discussions are progressing with airports and government about parking for these aircraft.

Essential domestic, regional and freight connections will be maintained as much as possible.

QANTAS’ fleet of freighters will continue to be fully utilised. Some domestic passenger aircraft will also be used for freight-only flights to replace lost capacity from regular scheduled services. There is no impact on Qantas Loyalty’s operations as a result of today’s announcement.

INTERNATIONAL NETWORK CHANGES

The QANTAS Group is making the following changes:

  • All regularly scheduled QANTAS and Jetstar international flights from Australia will be suspended from end March until at least end May 2020. Some flights may continue in order to maintain key links, based on ongoing discussions with the Federal Government.
  • Jetstar Asia (Singapore) will suspend all flights from March 23 to at least April 15, 2020.
  • Jetstar Japan has suspended international flights and cut domestic flying.
  • Jetstar Pacific (Vietnam) has suspended international flights and will significantly cut domestic flying.

DOMESTIC NETWORK CHANGES

The Group will maintain connectivity to almost all Australian domestic and regional destinations that QANTAS, QANTAS Link and Jetstar currently operate to. The 60 percent reduction in capacity will come mostly from a significant reduction in flight frequency, but also route suspensions and postponing a number of new route launches.

(The route-by-route detail of these changes can be found here.)

PEOPLE IMPACT

In order to preserve as many jobs as possible longer term, QANTAS and Jetstar will stand down the majority of their 30,000 employees until at least the end of May 2020.

During the stand down, employees will be able to draw down on annual and long service leave and additional support mechanisms will be introduced, including leave at half pay and early access to long service leave. Employees with low leave balances at the start of the stand down will be able to access up to four weeks’ leave in advance of earning it. Unfortunately, periods of leave without pay for some employees are inevitable.

Senior Group Management Executives and the Board have increased their salary reductions from 30 per cent to 100 per cent until at least the end of this financial year, joining the Chairman and Group CEO in taking no pay. Annual management bonuses have also been cancelled.

SHAREHOLDER IMPACT

Given the current extraordinary circumstances, a decision has been made to defer payment of the shareholder dividend announced on 20 February from 9 April until 1 September 2020. This is in addition to the cancellation of the off-market buy back, previously announced.

CEO COMMENTARY

Comments from Qantas Group CEO Alan Joyce:

“The efforts to contain the spread of Coronavirus have led to a huge drop in travel demand, the likes of which we have never seen before. This is having a devastating impact on all airlines.

“We’re in a strong financial position right now, but our wages bill is more than $4 billion a year. With the huge drop in revenue we’re facing, we have to make difficult decisions to guarantee the future of the national carrier.

“The reality is we’ll have 150 aircraft on the ground and sadly there’s no work for most of our people. Rather than lose these highly skilled employees who we’ll need when this crisis passes, we are instead standing down two-thirds of our 30,000 employees until at least the end of May.”

“Most of our people will be using various types of paid leave during this time, and we’ll have a number of support options in place. We’re also talking to our partners like Woolworths about temporary job opportunities for our people.

“This is a very hard set of circumstances for our people, as it is for lots of parts of the community right now.

“No airline in the world is immune to this, with the world’s leading carriers making deep cuts to flying schedules and jobs. Our strong balance sheet means we’ve entered this crisis in better shape than most and we’re taking action to make sure we can ride this out.

“Since this crisis started, there has been overwhelming support from our customers. That gives me even more confidence that we’ll get through this,” added Mr Joyce.

CUSTOMER INFORMATION

Customer contact centres are currently experiencing long wait times from people seeking to change their travel plans as a result of the Coronavirus. To help manage the demand we ask that customers only call if they have travel within the next 48 hours.

To avoid further inconvenience, we’re converting all bookings on cancelled flights to a travel credit, which can be used anywhere on our network.  Affected customers will be contacted directly from next Monday.  Any customers travelling before the end of May who wish to change their booking are also eligible to receive a travel credit instead.

If flights were booked through a travel agency or third-party website (e.g. Webjet, Booking.com), customers will need to contact them directly to make changes to their booking.

QANTAS Airways aircraft photo gallery:

QANTAS Group cuts international flying by 90%, grounds around 150 aircraft

QANTAS Group has made this announcement:

As a result of significant falls in travel demand due to Coronavirus, and new government restrictions across multiple jurisdictions in recent days, QANTAS Airways and Jetstar Airways will make further and much larger cuts to domestic and international flying schedules.

To be phased in from the end of March 2020 onwards:

  • Total Group International capacity will be cut by around 90 percent until at least the end of May 2020. This is up from a 23 per cent reduction for the fourth quarter of FY20 announced last week and largely reflects the demand impact of severe quarantine requirements on people’s ability to travel overseas.
  • Total Group Domestic capacity will be cut by around 60 percent until at least the end of May 2020. This is a major increase from the 5 per cent reduction for the fourth quarter of FY20 and reflects a rapid decline in forward travel demand due to government containment measures, corporate travel bans and a general pullback from everyday activities across the community.
  • This represents the grounding of around 150 aircraft, including almost all of the Group’s wide-body fleet.
  • Previously announced cuts in place from end-May through to mid-September remain in place and are likely to be increased, depending on demand.

The route-by-route detail of these changes across QANTAS and Jetstar is currently being worked through and will be announced in coming days.

Despite the deep cuts, the national carrier’s critical role in transporting people and goods on key international, domestic, routes will be maintained.  This includes using some domestic passenger aircraft for freight-only flights to replace lost capacity from regular scheduled services. QANTAS’ fleet of freighters will continue to be fully utilized.

PEOPLE IMPACT

The precipitous decline in demand and resulting cuts to flying mean that the QANTAS Group is confronted with a significant labor surplus across its operations. Travel demand is unlikely to rebound for weeks or possibly months and the impact of this will be felt across the entire workforce of 30,000 people.

The QANTAS Group is working to manage this impact as much as possible, including through the use of paid and unpaid leave. This will be in addition to measures already announced, including three months of no pay for the CEO and Chairman, significant pay cuts for Group Executive Management and Board members, and cancelling of annual bonuses and an off-market buy back.

CUSTOMER IMPACT

The Group has issued a wide-ranging booking waiver for customers wanting to suspend their travel plans.

Customers with existing bookings on any domestic or international flight until May 31, 2020, who no longer wish to travel, can cancel their flight and retain the value of the booking as a travel credit voucher. This needs to be processed by March 31, 2020.

Customers who make a new domestic or international booking and later decide they no longer wish to travel, can cancel their flight and retain the value of the booking as a QANTAS travel credit or Jetstar travel voucher. This applies to bookings made from March 10, 2020 until March 31, 2020 for travel before May 31, 2020.

QANTAS Airways aircraft photo gallery:

QANTAS Group makes drastic cuts leaving only two Airbus A380s flying

The QANTAS Group has announced further cuts to its international flying, reducing capacity by almost a quarter for the next six months.

The latest cuts follow the spread of the Coronavirus into Europe and North America over the past fortnight, as well as its continued spread through Asia, which has resulted in a sudden and significant drop in forward travel demand.

These additional changes will bring the total international capacity reduction for QANTAS and Jetstar from 5 percent to 23 percent versus the same time last year and extend these cuts until mid-September 2020.

The biggest reductions remain focussed on Asia (now down 31 percent compared with the same period last year). Capacity reductions to the United States (down 19 percent), the UK (down 17 percent) and Trans-Tasman (down 10 percent) will also be made in line with forward booking trends.

CHANGES TO SERVICES

Rather than exit routes altogether, QANTAS will use smaller aircraft and reduce the frequency of flights to maintain overall connectivity.

This approach results in eight of the airline’s largest aircraft, the Airbus A380, grounded until mid-September. A further two A380s are undergoing scheduled heavy maintenance and cabin upgrades, leaving two of its A380s flying.

In response to strong customer demand for the direct Perth-London service, the existing Sydney-Singapore-London return service (QF1 and QF2) will be temporarily re-routed to become a Sydney-Perth-London service from April 20, 2020.

The start of QANTAS’ new Brisbane-Chicago route will be delayed from April 15 to mid-September.

Jetstar will make significant cuts to its international network, including suspending flights to Bangkok and reducing flights from Australia to Vietnam and Japan by almost half. Jetstar’s daily Gold Coast to Seoul flight was suspended last week.

(See table below for more detail of international network changes.)

Domestically, QANTAS and Jetstar capacity reductions will be increased from 3 per cent to 5 per cent[1] through to mid-September 2020, in line with broader economic conditions.

In total, this is the equivalent of grounding 38 Qantas and Jetstar aircraft[2] across the international and domestic network. The Group’s total capacity reduction changes from 4 per cent (announced on February 20) to 17 percent for the last quarter of FY20.

Given the reduced flying across the QANTAS Group fleet, maintenance work will be brought forward where possible to make best use of this time.

IMPACT ON FINANCIAL PERFORMANCE

The Group is taking decisive action to mitigate the significant adverse impact of Coronavirus on demand, including longer range capacity cuts that improve the business’ ability to reduce costs. However, given the dynamic and uncertain nature of this situation, it is not possible to provide meaningful guidance at this time on the size of that impact on Group earnings for the remainder of FY20.

In line with its Financial Framework the Group is in a strong position, with low debt levels and a long debt maturity profile, $1.9 billion in cash plus a further $1 billion in undrawn facilities and $4.9 billion in unencumbered assets.

To help maintain this position in the face of current uncertainty, the Board has decided to cancel the off-market buyback announced in February, which will preserve $150 million in cash. The interim dividend of 13.5 cents per share will still be paid on 9 April.

COST REDUCTION MEASURES

In addition to cutting capacity, a number of cost reduction measures will be triggered across the QANTAS Group, including:

  • Annual management bonuses set to zero for FY20.
  • For the remainder of FY20:
    • QANTAS Chairman will take no fees.
    • Group CEO will take no salary.
    • QANTAS Board will take a 30 percent reduction in fees.
    • Group Executive Management will take a 30 percent pay cut.
  • Freeze of all non-essential recruitment and consultancy work.
  • Asking all QANTAS and Jetstar employees to take paid or unpaid leave in light of reduced flying activity.

A material drop in fuel price has provided a significant cost benefit in addition to the saving from lower consumption. The Group’s total fuel cost is now expected to be $3.74b[3] (excluding the benefit of capacity reductions compared with the same time last year) with limited participation to further falls in Brent crude prices.

CEO COMMENTARY

Announcing the changes, QANTAS Group CEO Alan Joyce, said: “In the past fortnight we’ve seen a sharp drop in bookings on our international network as the global coronavirus spread continues.

“We expect lower demand to continue for the next several months, so rather than taking a piecemeal approach we’re cutting capacity out to mid-September. This improves our ability to reduce costs as well as giving more certainty to the market, customers and our people.

“We retain the flexibility to cut further or to put capacity back in as this situation develops.

“The QANTAS Group is a strong business in a challenging environment. We have a robust balance sheet, low debt levels and most of our profit comes from the domestic market. We’re in a good position to ride this out, but we need to take steps to maintain this strength.

“When revenue falls you need to cut costs, and reducing the amount of flying we do is the best way for us to do that.

“Less flying means less work for our people, but we know coronavirus will pass and we want to avoid job losses wherever possible. We’re asking our people to use their paid leave and, if they can, consider taking some unpaid leave given we’re flying a lot less.

“Annual management bonuses have been set to zero and the Group Executive team will take a significant pay cut for the rest of this financial year.

“It’s hard to predict how long this situation will last, which is why we’re moving now to make sure we remain well positioned. But we know it will pass, and we’ll be well positioned to take advantage of opportunities when it does.”

ADVICE FOR CUSTOMERS

QANTAS and Jetstar will contact customers affected by these changes in the coming week. Customers who booked via a travel agent (including online travel agents) will be contacted by their agent rather than the airline.

Typically, customers flying internationally will be offered an alternative flight via another capital city or a partner airline, or an alternative day. Disruption to domestic passengers is expected to be minimal given the continued high frequency on most routes.

The latest information will be published on Qantas and Jetstar websites. Customers are encouraged to check this before calling the airline.

To provide customers with greater flexibility and confidence when they book, Qantas and Jetstar will waive change fees for new international bookings made from today until the end of March, if customers change their travel plans[4]. This applies to travel commencing up to June 30, 2020 and is limited to one free change per customer. Customers will need to pay any fare difference.

SUMMARY OF QANTAS GROUP NETWORK CHANGES

Route Change Effective dates (until mid-Sept 2020)
Asia
Sydney-Tokyo (Haneda) B747 replaced by smaller A330 30 March
Melbourne-Singapore  – 7 return flights per week cancelled (QF 37/38)

– B787 replaced by larger A330 on 7 return flights per week (QF 35/36)

– 20 April– 4 May
North America 
Brisbane-Chicago Route launch postponed Was to start 15 April
Brisbane-San Francisco Route suspended (3 return flights per week) 18 April
Sydney-San Francisco B787 replaced by larger B747 18 April
Melbourne-San Francisco Route suspended (4 return flights per week) 18 April
Sydney-Dallas/Fort Worth A380 replaced by smaller B787 20 April
Melbourne-Los Angeles A380 replaced by smaller B787 1 June
Sydney-Vancouver Seasonal service suspended (3 return flights per week) June and July only
United Kingdom
Sydney-London (Heathrow) – Flights to operate via Perth (instead of Singapore)then non-stop to London.

– Perth-London to become double daily as a result.

– A380 replaced by smaller B787

20 April
South America
Sydney-Santiago Delaying planned B787 introduction and continuing with B747 1 August

Note: The suspension of the A380 and First Class from Singapore routes will see the QANTAS First Lounge in Singapore close temporarily, with customers instead invited to use the adjacent QANTAS Business Lounge.

Note: QANTAS Boeing 787 has approx. 250 less seats than an A380.  

 

QANTAS – Extension of previously announced cancellations

(Until mid-Sept 2020 unless stated)

Route Change
Sydney-Shanghai Route continues to be suspended until at least mid-July (7 flights per week)(sole route to mainland China)
Sydney-Hong Kong Reduced from 14 to 7 return flights per week
Melbourne-Hong Kong Reduced from 7 to 4 return flights per week (1 additional cancellation per week from previously announced cuts)
Brisbane-Hong Kong Reduced from 7 to 3 return flights per week (1 additional cancellation per week from previously announced cuts)

 Note: Further capacity reductions will also be made on flights to Japan and New Zealand, with other Asian routes under evaluation.

 

Jetstar Airways – Summary of New Changes

Routes Change Effective date (until end June but may be extended)
Asia
Melbourne-Bangkok Route suspended 1 May
Sydney/Melbourne-Ho Chi Minh Flights reduced by over 50 per cent 1 May
Japan routes Flights reduced by almost 40 per cent 20 May
Brisbane-Bali Minor flight reductions 1 May

Note: Further capacity reductions will also be made on flights to New Zealand, with other Asian routes are under evaluation.

 

Jetstar Airlines in Asia – Summary of changes

Jetstar Asia (based in Singapore) will cut capacity by almost 40 percent with reductions in frequencies across the network. Singapore to Taipei and Osaka routes will be suspended.

Jetstar Japan has suspended its international services to Hong Kong, Taipei and Shanghai until at least the end of May and will reduce flights to Manila. Further reductions will be made to its Japanese domestic network.

Jetstar Pacific (based in Vietnam) has also suspended all international routes to the end of April, with the exception of Ho Chi Minh-Bangkok where flights have been halved. Further reductions are being made to its Vietnamese domestic network.

[1] Versus Q4 FY19.

[2] Includes seven Jetstar Asia (Singapore) aircraft and nine aircraft across Jetstar Japan and Jetstar Pacific (Vietnam).

[3] Compared with estimate of $3.85b at 20 February 2020.

[4] Changes need to be made at least three days before the date of travel.

 

QANTAS Airways aircraft photo gallery:

Sydney Morning Herald: QANTAS cleaning standards are a coronavirus risk

From the Sydney Morning Herald:

QANTAS Airways has been ordered to improve how it cleans its aircraft after a safety inspection by SafeWork NSW revealed it was potentially putting its passengers and workers at risk.

Read the full report.

QANTAS Airways aircraft photo gallery: