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.
To help stranded Moroccans around the globe get home, Emirates plans to operate two flights between Dubai and Casablanca on 8 and 9 September. Customers can also connect to these flights in Dubai from Emirates’ current network of 84 destinations across the Middle East and GCC, Asia Pacific, Europe and the Americas.
Emirates flight EK9953 on 8 and 9 September will depart Dubai at 1000hrs, arriving in Casablanca at 1530hrs. The return flight, EK9954 will depart Casablanca at 1730hrs, arriving Dubai at 0350hrs the next day.
Flights can be booked on emirates.com, through travel agents, Emirates’ sales offices and contact centre. Passengers must meet all the entry requirements to Morocco to be allowed to board the flights.
Flights from Dubai to Casablanca
Passengers who will be able to board must be Moroccan citizens, or foreign nationals holding Moroccan residency, or foreign nationals traveling to Morocco for business (holding a permit from the Moroccan Embassy in the UAE) in addition to diplomatic staff connecting from Dubai to Morocco.
Emirates customers entering Morocco must complete a PCR test (within 48 hours of travel) and a Serology test for Covid-19, with printed results to present on request at check-in and to the local authorities on arrival.
In addition, foreigners who do not require a visa to Morocco can be accepted if they provide a confirmed hotel booking.
Flights from Casablanca to DubaiThese flights will be available for passengers eligible to enter or transit through the UAE.
Ensuring the safety of travellers, visitors, and the community, COVID-19 PCR tests are mandatory for all inbound and transit passengers arriving to Dubai (and the UAE), including UAE citizens, residents and tourists, irrespective of the country they are coming from.
Air New Zealand has begun services to and from Nadi, Fiji to assist the Fijian government in repatriating its citizens.
Flight NZ952 took off from Auckland just after 11.00 this morning with Fijian passport holders on board, bound for Nadi, Fiji. The flight arrived in Fiji just after 2.00 pm, local time. A return service is also expected to repatriate New Zealanders who have been in Fiji since Covid-19 travel bans were implemented.
The repatriation flights to Fiji are being carried out in accordance with the Travel Advice issued by the Government of Fiji. On arrival in Fiji, all passengers are required to enter a government-designated quarantine facility for 14 days and will then be required to complete a further 14 days home isolation.
Air New Zealand’s Country Manager Fiji, Zeena Sahib says the airline is very happy to be supporting the Government of Fiji with the safe return of Fijians to their home country.
“There are a number of Fijian passport holders who have been in New Zealand for an extended period of time due to COVID-19 related border restrictions. Air New Zealand is very pleased to be assisting the Fijian government with ensuring their safe return home.”
Customers who wish to travel to Fiji, and who meet border restrictions for entry, are advised to contact Air New Zealand at groups@airnz.co.nz to arrange travel.
Customers already booked on an Air New Zealand flight to Fiji who do not meet entry requirements are encouraged to visit the Covid-19 FAQs section of the Air New Zealand website where they will automatically be able to put their flights into credit.
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.
Emirates is set to operate limited passenger services to Frankfurt (02, 04, 06, 09, 11, 13 May), London Heathrow (03, 05, 07, 10, 12, 14 May), Manila (3, 6, 8, 10, 13, 15, 16 May), Sao Paulo (3 May), and Shanghai (2 May). The one-way special flights will facilitate travel for residents and visitors wishing to return home.
Those who wish to travel to Shanghai must contact the embassy or consulate of the People’s Republic of China in the UAE. For all other flights, passengers can book directly on emirates.com or via their travel agent.
Only citizens of the destination countries, and those who meet the entry requirements of the destination will be allowed to board. Customers will be required to follow all health and safety measures required by the UAE authorities and the country of destination.
Similar to other repatriation flights that Emirates has operated thus far, for health and safety reasons, the airline will offer a modified inflight service that reduces contact, and the risk of infection. Magazines and print reading material will not be available. Meals on-board will be served in hygienic prepacked meal boxes, offering customers sandwiches, beverages, snacks, and desserts. A selection of hot snacks will also be served on long-haul flights.
Emirates’ Lounge and Chauffeur Drive services will be temporarily unavailable during this period and in-flight Wi-Fi service is available for purchase only. On board Emirates’ flights, seats are pre-allocated where possible with vacant seats placed between individual passengers or family groups in observance of physical distancing protocols. More information is available on emirates.com.
Cabin baggage will not be accepted on these flights. Carry-on items allowed in the cabin will be limited to laptop, handbag, briefcase or baby items. All other items have to be checked in, and Emirates will add the cabin baggage allowance to customers’ check-in baggage allowance.
Passengers are required to apply social distancing guidelines during their journey and wear their own masks when at the airport and on board the aircraft. Travellers should arrive at Dubai International airport Terminal 3 for check-in, three hours before departure. Emirates’ check-in counters will only process passengers holding confirmed bookings to the above destinations.
All Emirates aircraft will go through enhanced cleaning and disinfection processes in Dubai, after each journey.
Norwegian is pleased to announce that two Nordic banks have obtained credit committee approval to provide a guarantee for the required 10 percent for the first tranche of 300 million Norwegian kroner (NOK). Norwegian will secure the necessary headroom to pursue further guarantees from the Norwegian Government.
Government measures On Thursday 19 March, the Norwegian Government proposed a guarantee of NOK 6 billion for the Norwegian airline industry, of which up to NOK 3 billion is directed to Norwegian. The guarantee will be up to 90 percent from the Norwegian Government provided that financial institutions contribute with the remaining 10 percent. The guarantee scheme will consist of three tranches with a maximum two years maturity.
Since Thursday evening Norwegian has worked with banks and financial institutions and is pleased to announce that two Nordic banks have obtained credit committee approval to contribute with the 10 percent required in guarantee for Tranche I and to provide the NOK 300 million in financing backed by the guarantee from the Norwegian Government. The Company is working with the banks and the Norwegian Export Credit Guarantee Agency (“GIEK”), who will administrate the guarantee scheme, on the documentation in order to obtain the NOK 300 million in liquidity as soon as possible.
The Company is now working with GIEK and the Ministry of Trade, Industry and Fisheries to clarify the criteria and terms related to the remaining tranches under the scheme and to obtain further guarantees from financial institutions in order to back such remaining tranches. Norwegian will update the market with its further plan of action and implications for its stakeholders as soon as the criteria and terms have been finalized. The Government guarantee scheme is crucial for the Company as the current state of the capital markets in combination with the challenging times for the airline industry limit the options available. The first NOK 300 million will create necessary headroom to pursue the remaining tranches of the guarantee scheme.
Operational update Currently, most of the fleet is grounded and Norwegian has reduced its operations to a minimum. The airline will now primarily operate domestically in Norway and Sweden and between the Nordic capitals, in order to deliver on its corporate responsibility of maintaining critical infrastructure so that people and necessary goods and medical supplies can be transported during this unprecedented crisis. The limited schedule will remain in place until further notice. In addition, Norwegian has conducted repatriation flights together with the authorities in order to get citizens of Norway, Denmark and Sweden back home.
In order to reduce cost, Norwegian has temporarily laid off approximately 90 percent of its workforce and will continue to implement additional cost measures going forward.
Since the COVID-19 outbreak began, Emirates and dnata have been adapting operations in line with regulatory directives as well as travel demand.
The airline has aimed to maintain passenger flights for as long as feasible to help travellers return home amidst an increasing number of travel bans, restrictions, and country lockdowns across the world. It continues to maintain vital international air cargo links for economies and communities, deploying its fleet of 777 freighters for the transport of essential goods including medical supplies across the world.
With many of its airline customers dramatically reducing flights or ceasing services altogether, dnata has also significantly reduced its operations, including temporarily shutting some offices across its international network.
HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group said: “The world has literally gone into quarantine due to the COVID-19 outbreak. This is an unprecedented crisis situation in terms of breadth and scale: geographically, as well as from a health, social, and economic standpoint. Until January 2020, the Emirates Group was doing well against our current financial year targets. But COVID-19 has brought all that to a sudden and painful halt over the past 6 weeks.
“As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re-open their borders, and travel confidence returns. By Wednesday 25 March, although we will still operate cargo flights which remain busy, Emirates will have temporarily suspended most of its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services.”
Having received requests from governments and customers to support the repatriation of travellers, Emirates will continue to operate passenger and cargo flights to the following countries and territories until further notice, as long as borders remain open, and there is demand: the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, USA, and Canada. The situation remains dynamic, and travellers can check flight status on emirates.com.
Sheikh Ahmed added: “Emirates Group has a strong balance sheet, and substantial cash liquidity, and we can, and will, with appropriate and timely action, survive through a prolonged period of reduced flight schedules, so that we are adequately prepared for the return to normality.”
Cost reduction measures
The Emirates Group has undertaken a series of measures to contain costs, as the outlook for travel demand remains weak across markets in the short to medium term. This includes:
Postponing or cancelling discretionary expenditure
A freeze on all non-essential recruitment and consultancy work
Working with suppliers to find cost savings and efficiency
Encouraging employees to take paid or unpaid leave in light of reduced flying capacity
A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%. Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction
Presidents of Emirates and dnata – Sir Tim Clark and Gary Chapman – will take a 100% basic salary cut for three months
The Emirates Group has strong liquidity, with a healthy cash position but it is prudent that it take steps to reduce costs at this time. Emirates remains committed to serving its markets and looks forward to resuming a normal flight schedule as soon as that is permitted by the relevant authorities.
Safeguarding customers, employees, and communities
Emirates Group closely monitors the situation and keeps in regular contact with all relevant authorities, so that it can implement the latest guidance to keep travellers and its employees safe and healthy.
The company has strongly discouraged its employees from non-essential travel, implemented work from home policies for all employees where operationally feasible, enhanced cleaning and disinfection protocols at its facilities, introduced temperature screening at its key office entry points, and launched internal educational campaigns on hand hygiene and health practices to reduce risk of COVID-19.
Over the past weeks, the airline has also implemented enhanced cleaning and disinfecting measures on all of its aircraft departing Dubai as a precaution, and worked closely with airports to implement screening measures as required by the local authorities.
Frontline employees such as crew and airport teams have also been provided with support to stay safe while on duty, including providing hand sanitizers and masks where required.
The Emirates Group fully supports all initiatives to safeguard the health of communities in every market where it operates, including the UAE’s national COVID-19 response.
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.
