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Part 3: The year that changed Australian aviation

written by Adam Thorn | December 23, 2020
A file image of Jetstar Airbus A320 VH-VGZ. (Medhi Nazarinia)
A file image of Jetstar Airbus A320 VH-VGZ. (Medhi Nazarinia)

On 31 December 2019, Chinese authorities treated a small number of citizens for a mysterious illness in Wuhan. Fast forward to 23 March 2020, and Australian Prime Minister Scott Morrison announced an outright ban on all international flights leaving the country. This is the story of how coronavirus took our industry by surprise in 2020, as told through snippets of our news stories.

In part three, we report on how airlines cut record jobs and NSW shut its border to Victoria. Click the following links to read parts four and five or part one and two.

19 May

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Federal Tourism Minister Simon Birmingham appears to criticise Queensland Premier Annastacia Palaszczuk’s suggestion that her state’s borders may remain closed until September. “If one or two states were to hold out, then they will be answerable to their tourism industry and will ultimately need to provide additional support to that industry,” says Minister Birmingham.

20 May

Fly in, fly out charter operator Alliance says its ability to adapt planes for coronavirus helped it to increase profits this financial year by $7 million. The business adds its “pioneering” measures, including social distancing seating plans, new cleaning regimes and passenger temperature checks, have been adopted by much of Australia’s industry.

“The swift and flexible response has seen Alliance capitalise on additional demand for flights in the resource sector and, particularly, increases in flight schedules of contracted clients,” Alliance says in a statement to the ASX. This financial year, Alliance expects to make $40 million in profit before tax, up from $32.8 million in 2019. Its board calls the result “exceptional” and says it will award most of its employees, other than senior management, $1,000 in free shares, which are now trading at a four-month high.

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2 June

Virgin Australia’s administrator announces he’s whittled down the four prospective bidders to two: Bain Capital and Cyrus Capital Partners. Deloitte’s Vaughan Strawbridge says both parties “are well-funded, have deep aviation experience, and see real value in the business and its future”. The decision means that private equity firm BGH Capital and US aviation company Indigo Partners are knocked out, ahead of a 30 June deadline for a binding agreement to be reached.

4 June

Qantas and Jetstar announce they are planning to add 300 more return flights per week by the end of June. The business also announces it could increase capacity “up to 40 per cent” by the end of July depending on demand and the lifting of state border restrictions. Qantas Group chief executive Alan Joyce says, “We know there is a lot of pent up demand for air travel and we are already seeing a big increase in customers booking and planning flights in the weeks and months ahead.” Currently, Qantas and Jetstar are operating just 5 per cent of pre-pandemic capacity but the June increase will shift that up to 15 per cent.

9 June

Air New Zealand confirms it will drop social distancing imminently after the country lowered its coronavirus restrictions today. Now the country is in ‘Alert Level 1’, passengers will be able to eat hot food in the airline’s lounges, and unaccompanied minors can travel domestically again. Prime Minister Jacinda Ardern announced earlier that, from midnight, New Zealand could return to mostly normal lives after its last remaining case recovered.

15 June

Qatar Airways’ share of passengers travelling to and from Australia leapt from just 3 per cent to 44.5 per cent in April. The jump means the carrier, owned by the namesake state, is now by far the biggest in terms of passengers carried – with previous number one Qantas slumping from 17.9 per cent to just 2.9 per cent. The independent figures, recently released by the Australian government’s Bureau of Infrastructure, appear to confirm statements from the airline itself that it’s now the world’s biggest. Qantas and Virgin virtually suspended all international operations at the end of March as the coronavirus pandemic caused nations to shut their borders.

19 June

Australia’s domestic aviation industry roars back into life as 10,000 Jetstar $19 tickets sell out in just four hours. The special offer is part of a wider sale on 200,000 seats, with 70,000 selling out by early afternoon at a rate 40 times higher than a typical day. The Qantas Group says the news highlights the “huge pent up demand” for air travel and will be seen by many as a sign that consumers are now confident to begin flying again. Chief executive Alan Joyce adds, “We have a lot of aircraft on the ground with fixed costs attached to them, so if we can put some of them back in the air by offering special fares, it’s a positive for us, for our people, for tourism and for consumers.”

22 June

Victoria records more than 160 new cases of COVID-19 in a week, leading to Queensland Premier Annastacia Palaszczuk claiming that the state’s decision to re-open its border to the rest of the nation on 10 July could be overturned.

23 June

Health Minister Greg Hunt heavily hints Australia’s international borders will remain closed until a coronavirus vaccine is developed. Talking to the ABC on Tuesday morning, Minister Hunt says, “I do think that the international border closures will remain in place for a very significant time.” The words come after an apparent second wave of cases in Victoria spooks states into playing down interstate travel, too.

25 June

The Qantas Group announces it will cut 6,000 jobs altogether, or nearly 20 per cent of its workforce, and continue stand-downs for a further 15,000 employees. In a statement released on Thursday morning to announce its post-pandemic strategy, the business adds it will ground 100 aircraft for up to 12 months, including most of its international fleet. Chief executive Alan Joyce says, “Adapting to this new reality means some very painful decisions. The job losses we’re announcing today are confronting. So is the fact thousands more of our people on stand-down will face a long interruption to their airline careers until this work returns.”

26 June

Virgin Australia’s administrator officially confirms Bain Capital has won the bidding war to acquire the airline. The formal announcement came at 11am after its only approved rival, Cyrus Capital Partners, withdrew its proposal. Bain’s winning bid will now be put to creditors in August, who will vote to confirm the deal.

30 June

Victorian Premier Daniel Andrews requests all flights to Melbourne be diverted for the next fortnight as the state battles to get to grips with an apparent second spike of coronavirus cases. The announcement comes just hours after Queensland says it will open its borders to all states except Victoria, and South Australia U-turned and insisted it will now not allow travel to NSW, Victoria and the ACT. The dramatic flurry of announcements came after another big day of COVID-19 cases in Melbourne, with 64 recorded following the 75 on Monday. The numbers, however, have corresponded with a huge testing blitz in affected suburbs.

3 July

The TWU turns on winning Virgin bidder Bain Capital after a photo emerges showing the private investment firm’s team celebrating the deal at a Sydney restaurant. In an interview with The Australian, TWU national secretary Michael Kaine says, “The private equity world may involve a culture of winners and losers, but when thousands of jobs and livelihoods are on the line we expect the gravity of the current situation to be understood and accepted.” The intervention, hours after the airline increased flights, is hugely significant given the business’ employees together account for 9,020 of the total number of creditors and are owed $451 million.

4 July

The government announces it is to introduce arrival caps for international passengers returning to Australia from abroad, to ease pressure on the country’s government isolation facilities. It comes after some blamed apparent breaches in Victoria for causing a second wave of COVID-19 cases. “There will be continuing access to Australia but the number of available positions on flights will be less and I don’t think that is surprising or unreasonable in the circumstances,” PM Morrison says. “The decision that we took to reduce the number of returned travellers to Australia at this time was to ensure that we could put our focus on the resources needed to do the testing and [contact] tracing and not have to have resources diverted to other tasks.”

6 July

Victorian Premier Daniel Andrews announces the border between NSW and Victoria will close after the state recorded 127 more coronavirus cases on Sunday – its record high. Andrews insists the decision was taken jointly after a call between himself, Prime Minister Scott Morrison and NSW Premier Gladys Berejiklian.

13 July

Brisbane Airport’s new $1 billion runway finally opens with a warbird flypast and the departure of a Virgin Australia 737-8FE to Cairns. Chief Executive Gert-Jan de Graaff says, “This is more than just a formality and a slab of very expensive asphalt. When I look at that 3.3 kilometre stretch of runway, I see hope.” Construction workers quietly finished building the $1 billion runway at the end of April. The project to build it cost more than $1 billion, took eight years of construction and demanded 3.3 million man-hours from 3,700 Australians. It’s hoped it will slowly double the hub’s passenger numbers from 23.4 million to more than 50 million by 2040, increasing daily flights to 110 aircraft movements an hour. At its peak, 650 people were on-site in mid-2019 and 324 subcontractors were hired, with around 90 per cent based in south-east Queensland. In total, the state reclaimed 11 million cubic metres of sand from Moreton Bay as part of the works.

16 July

NSW and South Australia say will charge Australians returning home from abroad $3,000 to stay in hotel quarantine, while Queensland will ask for $2,800. Premier Gladys Berejiklian says, “NSW is the gateway to Australia, with more than 35,000 Australian citizens and permanent residents returning from overseas processed through our hotel quarantine system since 29 March 2020.

“The NSW taxpayers have footed much of the bill so far, with more than $65 million spent on quarantine accommodation to house international travellers returning to Australia. Australian residents have been given plenty of time to return home – and we feel it is only fair that they cover some of the costs of their hotel accommodation.”

22 July

Qantas finally says goodbye to the very last of its active 747s, as VH-OEJ departs Sydney Airport for Los Angeles, before heading to its final resting place in the Mojave Desert. “The 747 changed world aviation, changed Qantas and changed Australia,” says the airline’s chief executive, Joyce. “It’s an aircraft with an amazing history, an aircraft that has really made a difference to a lot of people.” QF7474 departed at 3:28pm, with Qantas’ first female captain, Sharelle Quinn, leading the team. “I have flown this aircraft for 36 years and it has been an absolute privilege,” she tells reporters.

After an emotional take-off to the tune of I Still Call Australia Home, the 17-year-old Boeing 747-438 flies over Sydney’s CBD, Harbour and beaches before heading to the HARS Museum, where it dips its wings in a final salute to the first 747-400 housed at the attraction, VH-OJA. Then, unexpectedly, Quinn draws the Qantas Kangaroo in the sky as the aircraft heads off to its final resting place in the Mojave Desert, via a quick freight drop off in Los Angeles. Today, there are thought to be only 30 747 passenger jets left in service globally and 132 in storage.

29 July

Queensland Premier Annastacia Palaszczuk announces she will formally shut her border to Greater Sydney once again. NSW Premier Gladys Berejiklian quickly hits back and says the decision will hurt Queensland far more than NSW, which is in the “strongest position in the nation”.

4 August

New Zealand Prime Minister Jacinda Ardern confirms plans for a trans-Tasman bubble have now been “put on the backburner” due to Victoria’s COVID-19 resurgence. She also indicates that Australia will need to be free of unknown locally acquired cases – so-called community transmission – for at least 28 days before travel could begin. The comments mark a turnaround from June, when the country’s then Deputy Prime Minister, Winston Peters, argued flights between the two countries should restart even if some Australian states were closed.

5 August

Virgin Australia announces it will cut 3,000 jobs and axe the Tigerair brand – making the low-cost airline the country’s first major airline casualty of the COVID-19 pandemic. In an early morning announcement to the ASX, the business also says it will continue to fly international routes, will operate as a hybrid and not a low-cost carrier and will also continue to offer domestic lounges and business-class flying. Minutes later, ‘winning’ bidder Bain then confirms to Australian Aviation that it plans to retain chief executive Paul Scurrah. Unions surprisingly refuse to criticise the redundancies, arguing that the decision to avoid becoming a solely low-cost carrier is “broadly positive”.

Meanwhile, Queensland Premier Annastacia Palaszczuk announces the state will extend its border closure on Saturday morning to cover all of NSW and the ACT. “We’ve seen that Victoria is not getting better and we’re not going to wait for NSW to get worse,” Premier Palaszczuk says. “We cannot risk a second wave, we have to act decisively.” Separately, NSW announces that citizens who had travelled through Victoria will still be allowed to return home but now must undertake 14 days of hotel quarantine at their own expense.

14 August

Air New Zealand announces it will reduce services to and from Auckland after the whole city is put back into lockdown, following a cluster of cases. The rest of the country is moved into lighter ‘alert level 2’ restrictions, which limits mass gatherings to 100 people and sees the return of social distancing.

17 August

Australian Aviation reports that the TWU’s relationship with new Virgin owners Bain is unravelling because the group will not publicly comment on speculation that former Jetstar chief executive Jayne Hrdlicka could be the new chairman. Hrdlicka had a notoriously fraught relationship with unions in her role at the Qantas Group. While Bain beat out Cyrus Capital Partners in May to become the administrator’s preferred bidder for the airline, the decision won’t be rubber-stamped until a final creditors’ meeting in early September, with the TWU’s backing likely to be crucial. The business’ employees together account for 9,020 of the total number of creditors and are owed $451 million.

To continue on to read part four, click here.

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