Qantas doesn't see USA flights resuming until the end of 2021

It's likely to be 18 months until you can jump onto a Qantas flight to the USA, and that's assuming widespread vaccinations.

By David Flynn , August 20 2020
Qantas doesn't see USA flights resuming until the end of 2021

Qantas CEO Alan Joyce doesn't expect the airline to resume international flights until mid-2021, with a return to the USA being reliant on a vaccine and likely to happen towards the end of 2021.

"We believe the earliest we're going to see the international borders opening up is the middle of next year," he said at a media briefing following the airline's revelation of a $2.7 billion loss for the 2020 financial year.

This included a $1.4 billion write-down on the value of its fleet, including all twelve Airbus A380s, which Joyce said would be "parked for at least three years."

"We've also put the (Boeing) 787s in long term storage, which are our other aircraft which fly transcontinental."

Read more: Qantas to send most of its Boeing 787s to the desert for storage

Since grounding all international flights at the end of March 2020, barring some repatriation flights to bring home Australians from overseas, Qantas has already pulled most international flights from its schedule through to March 2021.

Joyce said the restart of Qantas' international flights would likely be shaped by 'travel bubbles' on country-by-country basis "where you have similar level of exposure to the virus."

"New Zealand is an obvious example that should potentially open up relatively fast, compared to the other counties around the world."

"With the US, with the level of prevalence there it's probably going to take some time and probably going to need a vaccine before we could see that happening," Joyce elaborated.

"A lot of the medical advice we have, and governments around the world have, is that we could potentially see the vaccine by the middle (or) the end of next year."

"Countries like the US may be the first country to have widespread use of that vaccine, so that could mean that the US is seen as a market by the end of 2021."

The high cost of being grounded

But the lack of international flights is going to hit Qantas hard for the next 12 months, and will tilt the tables from the slim pre-tax profit of $124 million across the July 2019 - June 2020 financial year to an substantial loss measured in actual dollars rather than a paper write-down.

"We won’t have international for this financial year 21," Joyce explained. "International typically would generate $8 billion of revenue, so there’s a $8 billion hit in revenue to us this year without international."

And even when Australia's borders reopen and the Flying Kangaroo is once again hopping across the oceans, the recovery will be drawn out.

"Our forecast is for FY22, that’s July next year to the following June, that we'll be only at 50% of our pre-COVID international schedule."

None the less, Joyce still sees light at the end of the long dark stretch ahead.

"The Flying Kangaroo’s wings are clipped for now, but it’s still got plenty of ambition," he promised.

"Coming out of this crisis, we’ll be the only Australian airline that can fly long haul. We want to expand on that when our balance sheet allows, picking up where we left off with Project Sunrise."

Also read: Post-pandemic, Alan Joyce sees Qantas Project Sunrise as a ray of hope

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Qantas - Qantas Frequent Flyer

04 Mar 2014

Total posts 148

Partly depends on the outcome of the upcoming election and the CV-19 strategy in the USA

Joe
Joe

03 May 2013

Total posts 516

Why is Qantas so pessimistic when most other carriers are being a little more bullish?

I may be mistaken but a teeny part of me cant help but think that Qantas is somewhat happy with this 'pause'  creating a fig-leaf allowing it to restructure/retrench/reset. I mean the man shut the airline down in a millisecond when the pilots revolted.

31 Mar 2014

Total posts 333

Never waste a crisis 

Qantas - Qantas Frequent Flyer

26 Nov 2012

Total posts 47

They’ve always been ultra conservative and have had a glass half empty paradigm for 25 years on routes and fleet purchasing, which has not been great for customers but reasonable for their bottom line.  But then again, I don’t run an airline, just a successful business of my own. 

Qantas - Qantas Frequent Flyer

08 Jun 2018

Total posts 10

With all of Qantas's dire warnings about how long it will take for it to be back in the air, one has to wonder whether Qantas branded credit cards are worth the annual fee!

16 Jan 2018

Total posts 100

Relying on a vaccine for a virus that is ever changing just seems to be a waste of time. Governments world wide need to look at how they can again adore travel between countries as safely as possible. 12 months ago any other virus, cold, or flu and you would still be able to fly across the world and interact with hundreds of people and infect them. Now it’s a complete standstill with no end in sight and articles like this that are really hurting a very large economy nationally and globally. Just look at the number of direct and indirect jobs being lost due to this. Not to mention the money people are not getting back from airlines and  travel vouchers that they probably will never get to use. 

05 Oct 2017

Total posts 194

Well said. The hysteria (and even the agenda they're trying to sell here) is becoming blatantly obvious.

Qantas

19 Apr 2012

Total posts 950

Syd it isn’t so much a vaccine which would be great but a reasonable treatment like for flu to limit the dire effects may be enough, so we shall see. There are some things in the wind being trialled such as an inhaler that may work. Note flu vaccines work and it is a virus always changing so there is hope. It is the dire effects that have to be ameliorated rather than getting rid of the bug as such.

21 Dec 2016

Total posts 36

Although flu vaccines "work" 40%-60% of the time, depending on the year.  So yes, they help to mitigate spread, but no, they're unlikely to eradicate the virus.

QF

04 Apr 2014

Total posts 174

Australia really needs to come up with a better way to handle international travel, perhaps something like the Cambodian approach where all arrivals have to out down a deposit but are tested immediately on arrival and if the flight is clear, results within 24-48 hrs, then you get to go home and self isolate.  

Qantas also I needs to get over this total head in the sand approach.  If they wait till mid-2021 to restart any international flights and the end of 2021 to restart the US then, pardon the pun, but the bird will have flown.  Others won’t wait that long and most of them will have far deeper pockets than Qantas to fight for market share post Covid.

Qantas

19 Apr 2012

Total posts 950

Aggie they will fly when there are passengers. With only 50 allowed on a flight they are using the A3330s for freight. They are doing a wise thing hoping for the best and planning for the worst.  They can bring the 787s back online inside a month, and will do so if they can fly full loads regulators permitting. I doubt there will be daily flights anywhere for much of next year. The Mid east carriejr can do ti as they are state owned and in the middle of a freight hub. So the 40-50 businees class passengers a couple of times a week can be done more easily.

05 Apr 2012

Total posts 22

Looking forward to Virgin having international flights via partners! 

17 Jun 2020

Total posts 75

I hope that Alan is wrong. I would like it for borders to open sooner rather than later, first in bubbles with safer countries with similar levels of virus transmission (New Zealand, Japan, Singapore etc.) then more broadly. Given the importance of USA government and trade links with Australia, cannot see all travel especially business being banned till end of 2021. Even government ministers went a couple of weeks ago during the height of the pandemic. USA will move on to trading with other countries that want to open and do business. 

If Qantas as a business is planning for end 2021 because it works for them then so be it. I do hope the government is making decisions on when people can travel overseas independent of a private company. When it is reasonably safe to travel with safeguards, travel should resume with no delay and and other airlines should fly that are ready to go. 

22 May 2011

Total posts 68

Wait, wasn’t it Qantas International that was the loss making part of the business and it was Qantas Domestic that was making most of the money?  So as long as domestic recovers much faster, shouldn’t we see profitability pick up much faster?  These write downs are accounting things and not reoccurring.

15 Aug 2018

Total posts 19

Since QANTAS doesn’t want  to fly international maybe it should be renamed TAA - for that is what it is now.

My wife and I have > $12,000+ credit for business class NYC to BNE. Must be tens of thousands like us. I worry about Qantas's balance sheet not its P&L.


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