Qantas eyes exit from pandemic hibernation

Qantas is betting on Australia's vaccine rollout and "huge pent-up demand" for travel to kick-start overseas operations.

After 18 months closed off from the rest of the world, Australians are so keen to travel overseas that Qantas is bringing its giant A380s out of hibernation early to take on the task.

The desire to fly overseas is running at double or even triple normal levels, chief executive Alan Joyce said, citing research carried out by the airline. There’s “huge pent-up demand,” he said.

After writing down and grounding its A380s for what it said would be at least three years at the start of the pandemic in 2020, Qantas is giving the superjumbo a new lease of life. The once-unloved behemoth is now at the centre of Mr Joyce’s bold plan to restart overseas services from the end of this year.

Australia’s vaccination programme, after falling behind schedule early in the year, is now picking up. And under the Australian government’s phased reopening plan, inoculated Australians will be able to travel overseas once 80% of the eligible population are protected. At current rates, that target should be reached in December.

Flights to Covid-safe destinations such as Singapore, the US, Japan, the UK and Canada will start from mid-December, while Hong Kong services will follow in February, Sydney-based Qantas said.

Services to popular holiday destinations including Bali, Bangkok and Phuket, will be pushed back to April due to relatively low levels of vaccinations and high rates of infections, Qantas said.

Five of Qantas’ 12 A380s, which are still mostly parked in the Californian desert, will be revived to fly between Sydney and Los Angeles from July, and between Sydney and London - via Singapore - from November. Just two of the planes, which could carry more than 480 passengers, will be retired. The others could all be back in service by early 2024, according to Qantas.

“Public sentiment is changing dramatically,” Mr Joyce said. “People are saying, ‘we need to have a path out of Covid, a path back to our pre-Covid lives.’”

Qantas has a vested interest in leading the way, as it charts a recovery from a pandemic that’s expected to have cost it A$20bn (€12.3bn) in lost revenue by the end of 2021. It has reported a A$1.73bn loss for the year to the end of June, making the past two years the worst period on record for the airline.

Australia largely closed its international border in March last year and citizens allowed to return home under a capped system must quarantine for two weeks in a hotel at a cost of as much as A$3,000 for an adult. The government also barred citizens from leaving.

-Bloomberg