Qantas has announced it will cut its planned domestic flight capacity by another 10 per cent through to the end of March, due to Western Australia’s delayed border reopening.
The decision means that Qantas’ overall domestic capacity forecast for the first quarter of the 2022 calendar year will fall to 60 per cent of its pre-COVID capacity, down dramatically from the 102 per cent initially forecast late last year.
The new cuts are in addition to those announced earlier this month, when Qantas announced that it had been forced to slash flight capacity by over 30 per cent through to March to “better match travel demand” amid Australia’s ongoing COVID outbreak.
It also comes as Western Australia Premier Mark McGowan announced late on Thursday that his government would no longer reopen its domestic and international borders on 5 February as previously planned.
McGowan said the decision was made due to the Omicron variant being far more transmissible than its predecessors. No new date has been set for the border opening.
Qantas said that despite operating at a fraction of pre-COVID levels, it will continue to operate flights to and from Perth, to support essential workers, freight operations and those with exemptions.
The airline said it will conduct up to 15 flights per week from Sydney, Melbourne, Adelaide, Brisbane and Darwin.
Qantas said it has the ability to ramp up operations earlier than currently predicted, should demand require, or if the border situation changes.
Meanwhile, Qantas has said the timing to reinstate its popular Perth to London route, which has currently been redirected via Darwin is now “under review”.
Initially, Qantas had planned to restart Perth-London flights from late March 2022.
Singapore Airlines has similarly announced that it will no longer restart quarantine-free flights for vaccinated travellers from Singapore into Perth on 5 February, due to the reopening delay, however, will begin more regular flights from Perth to Singapore under its Vaccinated Travel Lane come 5 February.
Financial analysts at Macquarie have estimated that Qantas’ capacity-slashing movements in light of Omicron – made before this latest cut – will result in the Flying Kangaroo taking a financial hit to the tune of $1.4 billion.
It comes after the Qantas Group was forced to cancel 1,631 flights in December alone, as COVID cases began to surge dramatically, resulting in subdued customer demand and staffing shortages due to COVID-19 isolation.
“The delayed recovery will take a bite out of second half earnings, with the domestic cost base fully loaded in late 2021 to be ready to fly with the expected snap back in travel demand,” Macquarie analysts said.
Rival Virgin also revealed this month that it would cut flight capacity for January and February by 25 per cent and place its recently resumed sole international service to Fiji on hold, as it navigates the current Omicron outbreak.
According to the airline, travel demand has subdued due to the new outbreak ripping across Australia, with the country surpassing one million total cases of COVID-19 on Monday, around half of which have been recorded in the last week alone.
Meanwhile, the industry continues to face an ongoing staff shortage, with frontline workers repeatedly sent into seven-day isolation due to being deemed close contacts of confirmed COVID cases.
As a result, Virgin has slashed capacity across its network and suspended all flights on 10 of its routes, including its one international service to Fiji – less than one month after reinstating the service for the first time since the airline entered administration in 2020.
It also comes after airlines were forced to cancel dozens of flights over the holiday period, due to COVID close contact rules sending staff into isolation in droves.
State and federal governments have attempted to curb the chaos, by implementing new vaccination mandates and changing the rules for close contacts.
Aviation workers in NSW will soon be required to receive their booster shot, or third dose, of the COVID-19 vaccine, under new rules introduced by Premier Dominic Perrottet on Friday.
Meanwhile, Prime Minister Scott Morrison said on Sunday that national cabinet was considering changing close contact rules for frontline aviation workers, to ease pressure on understaffed industries.
Under the new national rules, aviation workers will be allowed to exit isolation and return to work, even if they have been exposed to COVID-19, as long as they are fully vaccinated and show no COVID symptoms.
The federal government has already changed the rules around what constitutes a “close contact” a number of times, in order to reduce pressure on heavily impacted industries and supply chains, to now only include household contacts, or anyone who has spent more than four hours continuously with a positive COVID case.