A sustained rebound in domestic travel demand, and the performance of its Freight and Loyalty divisions, continues to drive the Qantas Group’s recovery from the impacts of COVID-19.
Based on current trading conditions the Group expects to be statutory free cash flow positive for the second half of FY21. Net debt levels peaked in February at $6.4 billion and are expected to be lower than they were in December ($6.05 billion) by the end of the financial year.
Liquidity levels remain strong with total funds of $4.0 billion, including cash of $2.4 billion and $1.6 billion of undrawn debt facilities as at 30 April 2021.
The total revenue loss for the Group since the start of COVID is now projected to reach $16 billion by the end of FY21 – however the role of domestic travel demand in the Group’s recovery is highlighted by the fact revenue from domestic flying is expected to almost double between the first and second half of this financial year.
Assuming no further lockdowns or significant domestic travel restrictions, the Group expects to be Underlying EBITDA positive in the range of $400 – 450 million for FY21. At a statutory level before tax, the Group is still expecting a loss in excess of $2 billion, which includes the significant costs associated with previously announced redundancies, aircraft write downs and non-cash depreciation charges.
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Qantas (ASX: QAN.AX) and Jetstar are planning to restart regular international passenger flights to most destinations starting 31 October 2021 – a four month extension from the previous estimate of July, which had been in place since mid-2020.
The date change aligns with the expected timeframe for Australia’s COVID-19 vaccine rollout to be effectively complete.
Capacity will be lower than pre-COVID levels, with frequencies and aircraft type deployed on each route in line with the projected recovery of international flying. International capacity is not expected to fully recover until 2024.
The Group remains in close consultation with the Federal Government around the reopening of international borders and will keep customers updated if further adjustments are required.
Qantas is assessing the use of digital health pass apps to help support the resumption of COVID-safe international travel. The CommonPass and IATA Travel Pass smartphone apps are being trialled on the airline’s international repatriation flights.
Qantas network
Qantas is planning to resume flights to 22 of its 25 pre-COVID international destinations including Los Angeles, London, Singapore and Johannesburg from 31 October 2021.
Qantas won’t initially resume direct flights to New York, Santiago and Osaka, but remains committed to flying to these three destinations. In the meantime, customers will be able to fly to these destinations under codeshare or oneworld arrangements with partner airlines.
Jetstar network
Jetstar plans to resume flights to all of its 13 international destinations. Frequencies will be adjusted in line with the projected recovery of international flying.
Trans-Tasman
Qantas and Jetstar are planning for a significant increase in flights to and from New Zealand from 1 July 2021.
The Group has the ability to respond to travel bubbles that may open.
Additional flexibility and extension of credit vouchers
Qantas has today announced additional flexibility for international bookings to enable customers to book flights with confidence.
Qantas’ updated Fly Flexible policy (previously only available for domestic and Trans Tasman flights) now applies to international flights booked from today until at least the end of April 2021. The flight date can be changed to any available for sale at the time (up to 355 days in advance). Qantas will waive the change fee however a fare difference may apply.
Qantas has also extended credit vouchers to enable travel until 31 December 2023 on domestic or international flights, with Jetstar doing the same for vouchers issued due to COVID-19 disruptions.
Customers with international bookings impacted by cancellations will be contacted directly and offered alternatives.
Queensland and Northern Territory Aerial Services (QANTAS) today marks 100 years since it was founded in the Australian outback.
On 16 November 1920, two veterans of the Australian Flying Corps, Hudson Fysh and Paul McGinness, together with local grazier Fergus McMaster, founded what would later become the national carrier.
This happened just 17 years after the first powered flight by the Wright Brothers, two years after the end of World War One and at the tail end of the last major global pandemic, the Spanish Flu.
The new airline focused on conquering the “tyranny of distance” that was a major barrier to the growth of modern Australia. Its early chances of success were uncertain, to the point early backers called their investment “a donation”.
Initially carrying mail between outback towns, the airline was flying passengers to Singapore by the 1930’s. By the end of the 1940’s its strategic importance saw it nationalised and in the 1960’s, it was an early adopter of the jet aircraft that mainstreamed global travel. Qantas invented business class in the 1970’s, switched to an all-747 fleet in the 1980’s, was privatised in the 1990’s, founded Jetstar in 2004, went through major restructuring in 2014 and, by 2020, had recently completed several important ‘firsts’ in non-stop travel to Europe and the US.
Qantas is the oldest continuously-operating airline in the world and the only one that (normally) flies to every single inhabited continent on earth.
Planned centenary celebrations have been significantly scaled back due to the impact of COVID-19, but Qantas will still mark the occasion with a low-level flyover of Sydney Harbour on the evening of its anniversary.
The flight path is expected to pass near Rose Bay where our Empire Flying Boats took off for Singapore between 1938 and 1942.
Qantas Chairman, Richard Goyder, said: “The history of Qantas shows it’s no stranger to a challenge or a crisis. That’s often when its role as the national carrier has really come to the fore.
“We want to use this moment to say thank you to all those who have supported Qantas over the years. And, in particular, to the many people who have dedicated some or all of their careers to this great company.”
Qantas Group CEO, Alan Joyce, said: “Around the world, Qantas is probably best known for its safety record, endurance flying and long list of aviation firsts. But for Australians, there’s nothing quite like seeing the flying kangaroo at the airport, waiting to take you home. We hope to be doing a lot more of that in the months and years ahead.”
Range of measures introduced to ensure a safe travel environment and give extra peace of mind.
Masks on board, hand sanitising stations and enhanced aircraft cleaning among the improvements.
More flexibility added to bookings so people can plan with confidence.
Qantas and Jetstar will roll out a series of wellbeing improvements to give peace-of-mind in preparation for domestic travel restrictions easing.
The ‘Fly Well’ program brings together a number of temporary measures already in use by the Qantas Group, including on repatriation flights from virus hot-spots, and represents a combination of best-practice medical advice and feedback from customers.
Pre-flight
Rolling out from 12 June, the key measures at each point of the journey will be:
Information sent to all customers before they fly, so they know what to expect.
Contactless check-in (via online/app) and self-serve bag drop strongly encouraged, including use of Q Bag Tags.
Hand sanitising stations at departure gates.
Temporary changes to Qantas Lounges, including increased physical distancing, hand sanitising stations, enhanced disinfection of surfaces and adjustments to food and drink service.
Working with airports on other safeguards in the terminal, including regular disinfection of security screening points and installing hygiene screens at airline customer service desks, wherever practical.
On board
Masks provided to all passengers on each flight – while not mandatory from a safety point of view, they are recommended to be worn in the interests of everyone’s peace-of-mind.
Enhanced cleaning of aircraft with a disinfectant effective against Coronaviruses, with a focus on high contact areas – seats, seatbelts, overhead lockers, air vents and toilets.
Sanitising wipes given to all passengers to wipe down seat belts, trays and armrests themselves, if preferred.
Simplified service and catering to minimise touchpoints for crew and passengers.
Passengers asked to limit movement around cabin, once seated.
Sequenced boarding and disembarkation to minimise crowding.
In addition, the air conditioning systems of all Qantas and Jetstar aircraft are already fitted with hospital-grade HEPA filters, which remove 99.9% of all particles including viruses. Air inside the cabin is refreshed on average every five minutes during flight.
All airline employees are required to follow strict personal hygiene protocols, for the benefit of themselves and others.
All passengers are encouraged to download the Australian Government’s COVIDSafe app as part of improving the ability of health authorities to contain the spread of Coronavirus. In-line with public health advice, anyone with cold and flu like symptoms should stay at home.
The Qantas Group has completed a new round of debt funding, securing $1.05 billion in additional liquidity to strengthen its position as it manages through the Coronavirus outbreak.
This debt has been secured against part of the Group’s fleet of unencumbered aircraft, which were bought with cash in recent years. The loan has a tenure of up to 10 years at an interest rate of 2.75 per cent.
This funding increases the Group’s available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available.
The Group’s net debt position remains at the low end of its target range, at $5.1 billion, with no major debt maturities until June 2021. In line with the rest of the Qantas debt book, the new funding contains no financial covenants.
With a further $3.5 billion in unencumbered assets, the Qantas Group retains flexibility to increase its cash balance as a prudent measure in the current climate. As previously announced, various steps have been taken to significantly reduce activity levels and costs given the dramatic revenue impact of the Coronavirus pandemic and the related travel restrictions on Jetstar and Qantas passenger services.
Qantas Group CEO Alan Joyce said: “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances. Everything we’re doing at the moment is focused on guaranteeing the long term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”
Seven of the Group’s 11 wholly-owned Boeing 787-9’s have been securitised against this funding.
Qantas Group shares came perilously close to dropping below $2 on the day the airline announced it was suspending two-thirds of its staff.
Shares plummeted from $2.53 on Wednesday to a low of $2.03 before making a partial recovery to close out the day on $2.14. In December, stocks in Qantas were selling for $7.46.
Virgin Australia had a difficult day itself, with shares closing down 12 per cent to just $0.059.
Earlier in the day, Qantas Group dramatically said it was cancelling all international flights from late March and “standing down” 20,000 employees.
Jetstar group chief executive Gareth Evans says he is encouraged by the strong start to the low-cost carrier’s (LCC) new nonstop Gold Coast-Seoul Incheon service.
The inaugural flight departed Gold Coast Airport at a little past 1200 local time on Sunday, with Boeing 787-8 VH-VKF receiving an Airservices Aviation Rescue and Fire Fighting (ARFF) monitor cross prior to taking off as the JQ49 bound for Seoul Incheon.
Some nine hours and a half hours later, the 787-8 touched down at Seoul Incheon just before 2030 local time.
And after about two and a half hours on the ground, the Dreamliner took off as the reciprocal JQ50 bound for the Gold Coast.
Evans expressed confidence that the route would do well, given the stimulatory impact of low fares and South Koreans’ being among the most frequent travellers per capita of any country in the world.
Similarly, Australians were increasingly becoming aware of South Korea as a place to visit for food, history and popular culture influences such as K-Pop.
“There will be a lot of demand from Korea. But we are betting on huge increases in demand from Australians as well,” Evans told reporters at Gold Coast Airport on Sunday prior to the inaugural flight.
“The start to the route has been fantastic so we are off to a very good footing.”
Jetstar’s Gold Coast-Seoul Incheon flights have been scheduled on Wednesdays, Fridays and Sundays.
The 787-8s serving the route have 335 seats comprising 21 business class recliners in a 2-3-2 configuration with 38-inch pitch and 314 economy class seats at nine abreast with 30-inch pitch.
Currently, Asiana Airlines and Korean Air are the only two airlines with year-round nonstop flights between Australia and South Korea.
Asiana flies to Sydney, while Korean Air has nonstop flights to Brisbane and Sydney.
Qantas – Jetstar’s parent company – last served South Korea with its own aircraft in the mid-2000s when it flew Boeing 767-300ERs on seasonal services between Brisbane and Seoul. It also had year-round flights to Seoul in the late 1990s.
Ansett Australia also flew to Seoul in the late 1990s.
Evans said the stimulatory impact of low fares offered by Jetstar compared with those of full-service carriers Asiana and Korean Air would help grow the market.
Currently, the Australia-South Korea market was split 70 per cent South Korean travellers and 30 per cent Australian.
Looking ahead, Evans said he expected the directional flow to become more evenly balanced over time in a similar way the Australia-Japan market has evolved.
“We will grow both ends of the market but particularly we will grow the Australian end of the market,” Evans said.
“Japan sort of started about 70-30 now it is 50-50. We would imagine over time – a number of year – this market would move to a more 50-50 split.”
Further, a partnership with South Korea’s largest LCC Jeju Air, which has added its 7C airline code on the Jetstar flight as part of a hard block codeshare agreement, would also help raise awareness of the route in the South Korean market.
“The reason we are partnering with Jeju is because right now Jetstar brand has very little penetration in the Korean market so you need a strong partner to provide you with that brand strength and distribution in the market,” Evans said.
“That’s what Jeju brings.”
When Jetstar launched the route in May, it offered introductory fares of $179 one way. Since then, Evans said ticket prices for travel between the Gold Coast and Seoul Incheon have been in the $300 to $400 range.
“It’s those low fares that stimulate demand and open up markets,”Evans said.
“It has happened with us on a number of markets around Asia – Japan, Vietnam, Thailand. It will happen with Korea as well.”
Asked why Gold Coast was chosen as the city to launch flights to Seoul Incheon, Evans said that was where the demand was, noting inbound travellers from Asia loved to visit the Queensland city.
Further, Gold Coast was also able to act as a hub and gateway for the airline, offering convenient connections to other parts of Australia in both directions.
“The geography of the Gold Coast and the operation that we have got here into the Gold Coast means that we are building the Gold Coast as a hub for our Australian traffic,” Evans said.
“We are also seeing great demand from customers in Melbourne and Sydney connecting through the Gold Coast.”
Queensland Airports Ltd chief executive Chris Mills said the Jetstar flight opened up another new and exciting destination for locals on the Gold Coast, as well as new nonstop option for South Koreans travelling to Australia.
“South Koreans will have a direct link to our stunning beaches and hinterland, delivering significant benefits to our economy,” Mills said in a statement.
Queensland Tourism Minister Kate Jones noted the number of South Korean visitors to Queensland had grown by about 20 per cent to 76,000 visitors a year in the 12 months to June 2019, compared with 63,000 visitors in the prior corresponding period.
The new route was supported by the Queensland government’s attracting aviation investment fund, Queensland Airports and Destination Gold Coast.
Jones said the negotiations were completed over an 18-month period.
“Because it is taxpayers’ dollars to secure these new flights we always make sure that we believe that they meet our expectations for taxpayers,” Jones said.
“From our perspective we back flights that we know will attract and bring new tourists to Queensland.”
Oct 31 (Reuters) – VietJet Aviation has ordered 20 Airbus long-range A321XLR aircraft that the budget carrier hopes will support its international expansion as Vietnam’s aviation market heats up.
VietJet expects the first aircraft to be delivered in 2023, it said in a statement on Thursday, adding that it will be the “first carrier in the world” to operate the new long-range version of the single-aisle A320neo family jets.
Industry sources said VietJet would be among the first to put the XLR into service.
Vietnam’s largest conglomerate in August applied to launch an airline next year, intensifying competition in one of the fastest-growing aviation markets.
The sector includes Vietnam Airlines, Jetstar Pacific Airlines and Vietnam Air Services Co.
The airline also signed a separate agreement in Toulouse, France, for two A320/A321 aircraft simulators.
VietJet’s order book for Airbus aircraft now totals 186, the airline said.
In September, Reuters reported that Airbus sold 15 A321XLR jets to VietJet.
Airbus on Thursday confirmed that VietJet had placed a new order for 15 XLR and said another 5 would be converted to the new jet from the A321neo model.
VietJet CEO Nguyen Thi Phuong Thao said Thursday’s order will “modernise VietJet’s fleet as we look to strongly grow our international flight network.”
The airline currently flies to destinations including Japan, Hong Kong, Singapore, China and India.
(Reporting by Nikhil Kurian Nainan in Bengaluru; Additional reporting by Tim Hepher; Editing by Jason Neely and Dan Grebler)
FORT WORTH, Texas — A trip to the breathtaking landscape of the majestic Southern Alps will become much shorter when American Airlines launches the only nonstop service from Los Angeles International Airport (LAX) to Christchurch, New Zealand (CHC), next October. The airline is also adding the only direct service between Dallas Fort Worth International Airport (DFW) and Auckland, New Zealand (AKL), which will increase connecting opportunities for more customers across the United States. These routes are a direct result of the recently approved joint business with Qantas, which delivers new customer benefits like enhanced codeshare opportunities and increased frequent flyer benefits for American and Qantas customers.
The gateway to the South Island
Christchurch is the largest city in the South Island of New Zealand, and as the only carrier to operate this route, American will introduce its customers to one of the world’s most unique destinations.
“The South Island sums up everything that our customers are looking for in New Zealand — adventure, culture and wildlife found no where else,” said Vasu Raja, American’s Senior Vice President of Network Strategy. “We want to make their lifelong dreams a reality and bring New Zealand’s beauty even closer as the gateway to the South Island where you can drive, hike, cruise and fly to a variety of classic New Zealand experiences.”
American will fly to CHC three times per week from October 2020 through March 2021 on a Boeing 787-8. The 787-8 features 20 Flagship Business seats and 28 Premium Economy seats, providing additional comfort for the 13-hour flight. The aircraft offers a variety of entertainment options for customers, with access to power at every seat, live television, and hundreds of movies, music, games and TV shows.
LAX to CHC creates unique one-stop connections to the South Island not previously available by any other carrier. Qantas and Jetstar will connect passengers from CHC on to Wellington and Melbourne — some of the most popular destinations in the Pacific.
A new way to New Zealand
American currently operates seasonal service from LAX to AKL and will add new service from DFW next year. Flights will be operated with American’s state-of-the-art 787-9, with 30 Flagship Business seats and 21 Premium Economy seats. New flights from DFW to AKL will enable new one-stop connections to New Zealand from more than 70 cities across the United States.
“Now, we’re able to get customers from places like Louisville, Savannah or Monterrey, Mexico, all the way to New Zealand with just one stop,” said Raja.
As American enhances its commitment to the region, seasonal LAX to AKL service will resume earlier next year — Oct. 7 — adding three weeks of service to the increasingly popular destination.
“The South Island is a must-see for any international visitor to New Zealand,” said Stephen England-Hall, Tourism New Zealand’s Chief Executive. “Thanks to the new nonstop flights from Los Angeles to Christchurch and Dallas-Fort Worth to Auckland, it’s is now easier than ever before to experience all that unique and welcoming New Zealand has to offer.”
Benefits of the Qantas Joint Business
American and Qantas recently received final approval to form a joint business, which promises significant customer benefits not possible through any other form of cooperation. The carriers have already rolled out improved frequent flyer benefits, including higher earning rates for points and status credits on each airline’s network, and have expanded codeshare routes on each other’s network. Qantas will also increase from six weekly flights between Sydney, Australia (SYD), and DFW to daily service by mid-2020. Additionally, Qantas announced new service from San Francisco International Airport (SFO) and Chicago O’Hare International Airport (ORD) to Brisbane, Australia (BNE), which will launch in February and April respectively. Qantas will have its code on American’s new flights to New Zealand, giving Qantas frequent flyers more opportunities to earn and redeem Qantas points and status credits on American. Next year, American and Qantas will provide the most service to Australia and New Zealand from the United States.
LAX–AKL flights beginning in Oct. 2020 will be available for purchase starting Nov. 9. New LAX–CHC and DFW–AKL flights will be available for purchase starting Nov. 30.
What does this mean at LAX?
American and its partners serve more destinations to Asia/Pacific from LAX.
Customers traveling through LAX can take advantage of the most premium amenities of any carrier with three Admirals Club lounges, Flagship Lounge and Flagship Dining.
The new route launches a few months after the American Airlines Plaza opens at SoFi Stadium in Inglewood, California. The 298-acre world-class sports and entertainment destination is just three miles from the airport.
What does this mean at DFW?
In addition to new routes, American continues to invest in airport construction and development to deliver a world-class customer experience.
Customers can get cozy in five Admirals Club lounges and recently opened Flagship Lounge and Flagship Dining.
American’s growing network connects customers across the globe to more than 225 destinations in 31 countries from DFW.
