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QANTAS and Jetstar Airlines Adjust Third Quarter Flight Capacity Settings

Qantas and Jetstar are adjusting flying levels to better match travel demand in light of the sudden growth in COVID-19 cases. The Qantas Group now expects domestic capacity for the third quarter of FY22 to be at around 70 per cent of pre-COVID levels, down from the 102 per cent that had been planned. The schedule changes are focused on reducing frequency of services and size of aircraft to minimise inconvenience for passengers as much as possible.

The Group’s total international capacity for the same period will fall from 30 per cent to around 20 per cent of pre-COVID levels. This reduction is driven by increased travel restrictions in countries like Japan, Thailand and Indonesia and is mostly impacting Jetstar’s leisure routes. Other markets – such as London, Los Angeles, Vancouver, Johannesburg and India – continue to perform well.

Customers will be contacted directly from late January if their booking is impacted by cancellations and offered alternative flights that in most cases are likely to be a difference of a few hours if travelling domestically.

Qantas and Jetstar continue to have 100 per cent of their available Australian-based crew stood up, which has helped to minimise the resourcing impacts of some needing to self-isolate during the summer peak. This 100 per cent crewing level will be maintained despite the capacity reductions announced today, giving both airlines a significant buffer to manage ongoing isolation requirements and resulting in a more reliable schedule for passengers.

An assessment on the financial impact of these changes will be given at the Group’s half year results in late February, by which time a clearer picture will have emerged on swing factors such as actual demand levels; potential loosening or tightening of travel restrictions in countries overseas; and consumer response to the reopening of Western Australia next month. No material adjustments have been made to capacity expectations for Q4 FY22.

To give customers more confidence when they book international and domestic flights, Qantas has extended Fly Flex, which enables customers to change their travel dates as often as they need, fee-free (a fare difference may apply).

United Airlines Suspends Some Flights to China as Demand Drops Over Virus Fears

CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> said on Tuesday it was suspending some flights between the United States and Beijing, Hong Kong and Shanghai between Feb. 1 and Feb. 8 due to a “significant decline in demand” as the new coronavirus spreads.

“We will continue to monitor the situation as it develops and will adjust our schedule as needed,” United said in a statement.

The coronavirus that originated in Wuhan, China has killed 106 people in the Asian country and spread across the world, rattling financial markets.

United’s suspension affects a total of 24 flights.

The other two U.S. airlines that fly to China, Delta Air Lines Inc <DAL> and American Airlines Group Inc <AAL>, said they had not reduced their flights at this time but were closely monitoring the situation.

(Reporting by Tracy Rucinski; Editing by Chris Reese and Bill Berkrot)

Cathay Pacific Cuts 2020 Capacity Plan as Hong Kong Unrest Continues

SYDNEY (Reuters) – Hong Kong carrier Cathay Pacific Airways Ltd <CPCAY> plans to cut passenger flight capacity by 1.4% next year, reversing an earlier plan for a boost of 3.1% because of a challenging business outlook, an internal memo reviewed by Reuters showed.

The capacity reduction follows Cathay Pacific cutting its second-half profit guidance earlier this month, the second cutback in less than a month, because of anti-government protests that began in Hong Kong in June that have discouraged travel to the city.

“Given the immediate commercial challenges and the fact that our position has deteriorated in recent weeks, we must take swift action to adjust our budget operating plan for 2020 downwards again,” Chief Executive Augustus Tang said in the memo.

“Put another way, rather than growing our airlines in 2020, for the first time in a long time, our airlines will reduce in size.”

Revenue performance continues to be disappointing and advance bookings into 2020 remain much lower than expected due to weak traffic from some of its key markets, particularly mainland China, the memo said.

A Cathay representative said the carrier had no comment.

Full-service carrier Hong Kong Airlines, backed by indebted Chinese conglomerate HNA, also said on Friday it would further reduce its capacity to mitigate the impact from the political unrest.

Several Asian airlines have also cut flights to Hong Kong, as the protests in the financial hub and an escalating China-U.S. trade war have pushed the Chinese-ruled territory into recession for the first time in a decade.

Hong Kong has enjoyed a week of relative calm since local elections on Sunday delivered an overwhelming victory to pro-democracy candidates.

But protesters stirred support for more rallies over the weekend, as police withdrew on Friday from a university campus where some of the worst clashes with security forces had occurred as part of nearly six months of unrest.

Shares in Cathay rose 0.8% on Friday, outperforming a 2% drop in the broader market.

(Reporting by Jamie Freed in Sydney; Writing by Miyoung Kim; Editing by Clarence Fernandez and Christian Schmollinger)

A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong