Tag Archives: Jetstar Airways

QANTAS and Jetstar update their flight schedules, Perth-London route rerouted

The Qantas Group has updated its flying schedule in response to the reopening plans and latest border assumptions in Victoria, New South Wales and Western Australia.

The key domestic changes are:

  • Bringing forward the reopening date for travel between Victoria and New South Wales from 1 December to 5 November 2021, based on Victoria’s reopening plan.
  • Significantly increasing regional flying within New South Wales from 25 October 2021, in line with the State Government’s roadmap, to around 40 per cent of pre-COVID levels.
  • Delaying the restart of domestic flying between Western Australia and Victoria / New South Wales by two months to 1 February 2022, based on border assumptions.

Qantas will continue to operate five return flights a week between Perth and both Sydney and Melbourne to maintain minimum connections for those with permits to travel.

There is no change to Qantas or Jetstar flights between WA, Tasmania, Northern Territory and South Australia. Flights between WA and Queensland will increase once border restrictions are removed, hopefully in coming weeks. The Group is ready to adjust its schedules in response to changes by states as various restrictions ease in the weeks ahead.

Internationally, flights are still on track to gradually restart from 18 December 2021 onwards when Australia is expected to have reached National Cabinet’s ‘Phase C’ vaccination threshold of 80 per cent. However, as previously flagged, Qantas will temporarily reroute its flagship Perth-London service until at least April 2022 due to the latest WA border settings and assumptions.

Qantas is in detailed discussions with the NT Government and Darwin Airport to assess operating the direct London flight from Darwin during this time. The national carrier has successfully used Darwin as a hub for its repatriation flights to various destinations across Europe, Asia and the Middle East over the past 12 months.

The discussions for what would be a daily Melbourne-Darwin-London service focus on the logistics of domestic and international transit under the current NT Government Plan for COVID-Management at Stage 3 of the National Plan. If this service can’t operate through Darwin, it will instead fly Melbourne-Singapore-London until at least April 2022. A decision on the exact routing is likely to be made within the next two weeks.

Qantas Group CEO, Alan Joyce, said: “It’s great to see plans firming up for some domestic borders opening given the success of the national vaccine rollout.

“We’re now planning to ramp up flying between Melbourne and Sydney, which is usually the second busiest air route in the world, almost a month earlier than expected.  There are also a lot of regional destinations that will open up for the first time since June, which is great news for tourism as well as family and friends who can’t wait to see each other again.

“Get ready to see some emotional reunions at airports from late-October onwards.

“Based on our discussions with Western Australia we know their borders won’t be open to New South Wales and Victoria until early next year, so we’ve sadly had to cancel the flying we had planned on those routes in the lead-up to Christmas. We will maintain a minimum service for people with permits to travel, though, as we have throughout the pandemic.

“At this stage, WA doesn’t intend to open to international travel until sometime next year, so we’ll unfortunately have to temporarily move our Perth-London service until at least April 2022. Instead of operating from Melbourne to Perth and then on to London as it usually does, this flight will operate from Melbourne to London via either Darwin or Singapore, depending on conversations we’re having with the NT in the coming weeks. We look forward to operating this flight via Perth again when circumstances allow.

“We’re in regular discussions with all the states and territories, and will continue to make adjustments, including increasing flying as soon as border settings allow.

“The pace of the vaccine rollout means we’re still on track for international flying to restart from 18 December onwards. People are clearly keen to travel. We saw a 175 per cent spike in web searches in the week after we announced our plans and we’ve seen strong bookings for December and January for our flights to London, Los Angeles and Singapore in particular.

“The key factor in determining the ongoing demand level for international flying will be what the quarantine arrangements are for Australians when they return. The seven day home quarantine trial in New South Wales is a great step forward and we’re hoping the system evolves quickly for vaccinated travellers from low-risk countries to not have to quarantine on arrival, particularly given Australia itself is on track to have one of the highest vaccination rates in the world. That’s fast becoming the standard between many countries overseas.

“The reason we’re putting a lot of sale fares in the market as more domestic destinations open up is to help fast track the recovery by stimulating demand and getting our people back to work sooner. Jetstar sold thousands of $20 fares from Melbourne to Sydney, Byron Bay and Newcastle within hours of going on sale this week.  This is good news for the tourism industry, which has taken such a huge hit throughout the crisis.”

Should State or Federal roadmaps change, and flights are cancelled, customers may be eligible for a refund, credit voucher or to change the date of their travel.  Further details are available on Qantas and Jetstar’s websites.

More than 400,000 fully vaccinated Australians have so far claimed their vaccination reward and gone into the draw for eight prizes of a year’s worth of flights, accommodation and fuel. Almost three quarters have chosen 1000 Qantas Points as their reward, adding almost 300 million points to frequent flyers’ accounts. The rewards are open to Australians who are fully vaccinated by the end of the year.

International flights remain subject to Government and Regulatory approval.

QANTAS expands its E190 relationship with Alliance Airlines

QANTAS Airways has made this announcement:

  • Qantas expands deal with Alliance Airlines for additional capacity using Embraer E190 jets
  • More services for Adelaide-Canberra route announced today; others to follow
  • Jetstar Airways redeploys more aircraft from Singapore

The Qantas Group is preparing for continued growth in domestic travel demand, with additional aircraft to be made available for Qantas and Jetstar flying.

Additional E190s for QantasLink

The national carrier has announced an expansion of its three-year deal with Alliance Airlines, which provides QantasLink with capacity using Alliance’s Embraer E190 regional jet aircraft and the flexibility to respond to changing market conditions.

The expanded agreement will see the airline increase its options under this deal from 14 jet aircraft to a total of 18. Of this, three are already flying with another five to enter service by October. The E190s will be painted in QantasLink livery and are part of Qantas growing its domestic capacity to at least 107 per cent of pre-COVID levels in FY22.

The first of the 94-seat E190 jets started flying on the QantasLink network last month. The jet’s five-hour range makes it well suited to linking regional centres with smaller capital cities. The introduction of E190s also frees up Qantas’ Boeing 737 aircraft to be redeployed across the domestic network, enabling the airline to launch a number of new routes and add frequencies on existing ones.

Canberra-Adelaide is the latest route to benefit from additional flights made possible by the E190, with frequencies to double from nine per week to 18 per week from mid-July.

Jetstar

Jetstar boosts its Australian-based A320 fleet

Demand for low-cost leisure travel remains strong due to closed international borders and structural changes in Australia’s aviation market. As a result, Jetstar’s Australian domestic network is set to grow to 120 per cent of its pre-COVID schedule in FY22.

To help meet the increased demand, three Airbus A320 aircraft will be temporarily redeployed from Jetstar Asia in Singapore while international travel in the region faces a slower recovery.

These aircraft join the six Airbus A320 aircraft on loan to Jetstar Airways from Jetstar Japan and up to five Boeing 787-8 aircraft set to operate domestically until international travel resumes (previously announced).

CEO COMMENTS

Qantas Group CEO Alan Joyce said:

“Since travel demand started to recover about a year ago, our strategy has been to think creatively about how we use our fleet to add capacity back in, generate revenue and get more of our people back to work. That’s why we now have 787s flying domestically and A320s on loan from Jetstar airlines in Asia.

“Expanding our long-standing relationship with Alliance gives us access to a different aircraft type without spending any capital. The E190 is perfect for connecting capital cities and regional centres. Its size, range and economics have already let us start seven new routes that wouldn’t have worked with our existing fleet.

“When you combine our fleet, network, loyalty program, lounges, and the fact we offer both full service and low fare travel options, it puts the Group in a good position to deliver for the traveling public as we emerge from COVID.

“Victoria represents about 20 per cent of our total network and with restrictions in Melbourne easing and as borders start to reopen, we expect to see a quick rebound in travel demand just as we have in other cities when lockdowns ended. Our forward bookings certainly suggest that’s going to be the case.”

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 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:

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:

QANTAS backs the Airbus A321XLR with an agreement for 36 aircraft

QANTAS Airways Limited is backing Airbus’ new extended range A321XLR with an agreement covering 36 aircraft. This includes the conversion of 26 existing A320neo Family orders plus a new firm order for 10 A321XLRs.

The aircraft will allow the QANTAS Group, which includes low-cost carrier Jetstar, to improve its network and fleet flexibility to better serve point-to-point markets in Australia, Asia and the South Pacific.

Images: Airbus.

Jetstar introduces its new Airbus A321neo LR

Jetstar Airways will receive 18 new fuel efficient aircraft between 2020 and 2022.

The longer range means direct flights from East Coast of Australia to Bali, not previously possible with A320 aircraft.