Qantas has revealed it’s now primed to restart flying at short notice between Australia and New Zealand, as speculation increases over a so-called trans-Tasman bubble.
In a statement to the media on Tuesday morning, the airline said that while it’s extending staff stand-downs and domestic network cancellations to July, it had scope to restart some services at “relatively short notice”.
It comes after New Zealand Prime Minister Jacinda Ardern joined the start of Australia’s National Cabinet meeting to discuss the initiative.
Qantas chief executive Alan Joyce said, “We’re optimistic that domestic travel will start returning earlier than first thought, but we clearly won’t be back to pre-coronavirus levels anytime soon. With the possible exception of New Zealand, international travel demand could take years to return to what it was.”
The airline’s first major announcement in weeks covered its flight schedule, staff stand-downs and plans to restart flying.
As expected, international flight cancellations will be extended through to the end of July, and domestic until June. Some flights, outside government-funded routes and basic services, were due to restart in mid-May.
The group revealed that it’s now operating just 13 per cent of its domestic network, and 6 per cent of international in terms of flying hours.
However, the airline made some bold predictions as to when services could ramp up.
“The initial easing of government restrictions suggests some domestic travel may start to return before the end of July – though initial demand levels are hard to predict,” said the statement. “The group will continue to monitor the situation and can increase capacity with a minimum lead time of around one week.”
The current stand-down of employees will be extended until the end of June to match with the reduced network.
PM Ardern confirmed after the national cabinet meeting that a trans-Tasman bubble was discussed and that a fuller statement would be released later.
“We should both be proud of the efforts that have been made and the demonstration of the important Anzac bond between us,” she said.
On the weekend, New Zealand Foreign Minister Winston Peters hinted a deal could happen, calling the countries “two of the most integrated economies in the world”.
Prime Minister Ardern will join the call for at least half an hour, which will include representatives from all of Australia’s states and territories.
The wider Qantas Group also announced it had secured a further $550 million in funding against three of its wholly-owned 787-9 aircraft, following the $1 billion raised in March against seven 787-9s.
The business claims to have $2.7 billion in unencumbered debt and expects to reach a net cash burn rate of $40 million per week by the end of June.
Joyce said, “Our ability to withstand this crisis and its aftermath is only possible because we’re tapping into a balance sheet that has taken years to build.
“We’re expecting demand recovery to be gradual and it will be some time before total demand reaches pre-crisis levels. That means we need to think about what the Qantas Group should look like on the other side of this crisis in order to succeed.
“Fleet, network and capital expenditure will all have to be reviewed but our commitment to serve communities across Australia will not change.
“The Qantas Group has literally thousands of suppliers and we’ve put the smaller ones at the front of the queue. We’re grateful to many of our major suppliers, including almost all the capital city airports, who have given us a lot of flexibility.
“I want to recognise our people for their continued support and understanding in the face of this crisis. In particular, those who’ve helped bring Australians home from overseas and kept an essential domestic and regional network running, carrying on what the national carrier has done for 100 years.”
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