Qantas, Virgin restart flights with $165m Govt subsidy

A 'minimum domestic network' operated by Qantas and Virgin will be underwritten by the Australian government.

By David Flynn, April 17 2020

Qantas, Virgin restart flights with $165m Govt subsidy

Qantas and Virgin Australia are ramping up their domestic flights with a $165 million assist from Federal Government putting some meat back onto the skeleton schedule adopted by both airlines just prior to Easter.

Under the package, Qantas and Virgin will reinstate over 220 flights per week on routes serving all capital cities and 36 larger regional centres across all states and territories to create what's called a 'minimum domestic network'.

The first restarted flights will take wing on Friday April 17, with planes now rolling out of the hangar and hundreds of pilots, cabin and ground crews clocking back in after being stood down.

The network will stand for eight weeks, until June 7, 2020, with airlines and the federal government reviewing the schedule before it ends to consider if an extension is warranted.

In addition to reconnecting Australia's capital cities, the regional network focuses on towns that are more than two hours’ drive from key transportation hubs.

"We are ensuring secure and affordable access for passengers who need to travel... as well as supporting the movement of essential freight such as critical medicine and personal protective equipment," Deputy Prime Minister and Transport Minister Michael McCormack said.

However, McCormack repeated that "Australians are asked to stay home unless absolutely necessary."

Although the government funding will ensure the restarted flights don’t operate at a loss, the airlines won’t see a profit either – this ‘minimum domestic network’ is positioned as a break-even affair.

"While travel restrictions mean most passenger flights are not commercially viable at the moment, there remains a need for some essential travel – particularly given the distances between most Australian cities," a Qantas spokesperson said.

Flights will be sold as normal commercial fares, with passengers earning the appropriate serve of frequent flyer points and status credits, although travellers should expect a scaled-back meal service and social distancing in seat assignments.

In addition to carrying passengers, the flights will also boost overall freight capacity, which has fallen significantly as Australia's commercial air networks have shrunk.

Qantas' new domestic schedule

Qantas will roll out 164 flights per week to all capital cities plus 36 regional destinations, using a mix of Qantas Boeing 737s and Airbus A330s, QantasLink Dash 8 turboprops and Jetstar Airbus A320s.

The primary 'trunk routes' are:

Sydney – Adelaide
Sydney – Brisbane
Sydney – Canberra
Sydney – Melbourne
Sydney – Perth
Melbourne – Adelaide
Melbourne – Brisbane
Melbourne – Canberra
Melbourne – Hobart
Melbourne – Perth

The regional routes are:

New South Wales

Albury – Sydney
Armidale – Sydney
Ballina – Sydney
Coffs Harbour – Sydney
Dubbo – Sydney
Lord Howe Island – Sydney
Tamworth – Sydney
Wagga Wagga – Sydney

Victoria & Tasmania

Melbourne – Mildura
Melbourne – Launceston

Queensland

Brisbane – Cairns
Brisbane – Emerald
Brisbane – Gladstone
Brisbane – Mt Isa
Brisbane – Longreach
Brisbane – Mackay
Brisbane – Moranbah
Brisbane – Roma
Brisbane – Rockhampton
Brisbane – Townsville
Cloncurry – Mt Isa
Cloncurry – Townsville
Cairns – Horne Island
Cairns – Townsville
Cairns – Weipa
Charleville – Roma
Mt Isa – Townsville
Mackay – Rockhampton
Mackay – Townsville
Townsville – Rockhampton

South Australia

Adelaide – Kangaroo Island
Adelaide – Port Lincoln
Adelaide – Whyalla

Northern Territory

Alice Springs – Darwin
Alice Springs – Sydney
Brisbane – Darwin

Western Australia

Newman – Perth
Broome – Perth
Geraldton – Perth
Kalgoorlie – Perth
Learmonth – Perth
Port Hedland – Perth
Karratha – Perth

Virgin Australia's new domestic schedule

Virgin Australia will fly 64 return services each week between April 17 and June 7.

Sydney – Melbourne (seven return services per week)
Sydney – Brisbane (seven return services per week)
Sydney – Gold Coast (three return services per week)
Canberra – Melbourne (three return services per week)
Melbourne – Adelaide (three return services per week)
Melbourne – Brisbane (seven return services per week)
Melbourne – Canberra (three return services per week)
Melbourne – Perth (seven return services per week)
Melbourne – Sydney (seven return services per week)
Brisbane – Melbourne (seven return services per week)
Brisbane – Sydney (seven return services per week)
Brisbane – Cairns (three return services per week)
Brisbane – Mackay (five return services per week)
Brisbane – Rockhampton (three return services per week)
Brisbane – Townsville (three return services per week)
Adelaide – Melbourne (three return services per week)
Perth – Melbourne (seven return services per week)
Perth – Broome (three return services per week)
Perth – Port Hedland (two return services per week)
Perth – Newman (two return services per week)
Perth – Karratha (two return services per week)
Perth – Kununurra (two return services per week)
Perth – Kalgoorlie (two return services per week)

To check the days on which those flights operate, visit travel.virginaustralia.com.

Virgin Australia says "passengers seeking to travel between 17-29 April inclusive will be provided with additional flexibility, including the ability to rebook their ticket to any day or service within that period with any applicable fare differences waived."

PREVIOUS [April 12, 2020] | The Federal Government is preparing to subsidise Qantas and Virgin Australia for domestic flights, following a drastic reduction in services by both airlines in recent days.

Both airlines have been in discussions with Deputy Prime Minister Michael McCormack, who serves as Minister for Infrastructure, Transport and Regional Development, over the establishment of what's described as a "minimum domestic network" intended to bring more flights back to more cities and regional towns for the purpose of essential travel.

McCormack has confirmed ongoing discussions with the CEOs of Qantas and Virgin to ensure Australians returning from overseas can get home once they complete the mandatory 14 day quarantine period at their point of entry into the country, adding that "we also need, of course, to transfer people around from capital city to capital city.

More flights, less cash burn

Qantas has pared its domestic operations to the bone, with CEO Alan Joyce telling staff on Wednesday April 8 "for the next few weeks we’ll essentially be flying three aircraft – a Qantas 737, a Jetstar A320 and a QantasLink Dash 8 – so that will be the entire domestic network."

During the same briefing, Joyce and Qantas Domestic CEO Andrew David both flagged the government's involvement in underwriting a "minimum network".

David said the airline was prepared to "make further reductions on top of the reductions we’ve already made, if those services continue to burn cash, but in the meantime we continue to engage with the government to get a minimum network in place, that they agree to underwrite in the same way they’ve done with the international network."

Joyce added that Qantas "will still be burning some cash for operating that network. It's all about minimising that cash burn until the government has that minimum network in place, and then we're hopeful the network can be a bit bigger than that. It won't be much bigger than that, but it will be a bit bigger than that going forward and we won't be burning cash operating it."

Virgin pushes for equal treatment

It's uncertain if the government's intention was for Qantas to be the sole airline to operate this network, but Virgin Australia is also in the ring.

In a message to staff on a private Virgin Australia Facebook group posted this evening, and seen by Executive Traveller, CEO Paul Scurrah noted "I am aware that Qantas communicated to their people that they had been 'directed' by the Australian Government to operate a 'minimum domestic network'."

"Upon hearing this I immediately contacted the Deputy Prime Minister, who denied any such deal was in place and that both airlines will be treated equally."

"The good news is that he called me tonight to say we will be offered the opportunity to operate a 'minimum domestic network' subsidised by the Australian Government," Scurrah continued. "We will be in discussions with the Australian Government tomorrow to work through the detail."

Subsidised flights add to a $1bn rescue plan

Virgin's own timetable now consists of a single return flight between Sydney and Melbourne, which runs once per day except for Saturdays, as the airline stretches to preserve its dwindling cash balance in the face of what Chief Operations Office Stuart Aggs described as "little to no demand."

The airline has also approached the Federal Government for a $1.4 billion bailout.

Deputy PM McCormack last Thursday cited the "significantly reduced" networks of both Qantas and Virgin Australia, and said "we continue to talk to airline executives on a regular basis as we navigate this unprecedented situation.”

The government has already pledged more than $1 billion in support to Australia's aviation sector, including a $298m lifeline for regional airlines and a $715m waiver of fuel excise and government charges.

Executive Traveller has approached Qantas, Virgin Australia and the Department of Infrastructure, Transport and Regional Development for comment.