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Qantas expects to resume international flights from December to highly-vaccinated countries

Australia’s flag carrier Qantas has announced it intends to resume international travel with plans “linked to the vaccine rollout in Australia and key overseas markets”.

Destinations such as North America, the UK, Singapore and Japan, with high vaccination rates will be the flight carrier’s initial focus.

That is based on projections Australia will reach the National Cabinet’s Phase C vaccination threshold of 80 per cent in December 2021, triggering the gradual reopening of international borders.

It is also hoping for unrestricted domestic travel a month earlier, with the country’s overall vaccination rate expected to hit 70 per cent in November.

Vaccination rates
Qantas CEO, Alan Joyce has linked the ability to travel with vaccine uptake, forecasting New South Wales and Victoria will be sectioned off from the rest of Australia until early-December.

“When Australia reaches those critical vaccination targets later this year and the likelihood of future lockdowns and border closures reduces, we expect to see a surge in domestic travel demand and a gradual return of international travel,” CEO Alan Joyce said on Thursday.

In line with those plans, Qantas will bring five A380s, its largest passenger aircraft, back into service from mid-2022 to fly on the Sydney to Los Angeles route, followed by Sydney to London from November 2022.

The company projects the carrier’s ability to fly non-stop between Australia and London will grow in demand amid rising vaccination rates, prompting the airline to investigate using Darwin as a transit point as an alternative or in addition to its existing Perth hub.

In a statement, Qantas detailed this was due to Western Australia’s “conservative border policies”.

However, the airline still does not expect to start flying to more risky destinations such as Bali, Jakarta, Manila, Bangkok and Johannesburg until April next year.

Financial losses
Qantas’ optimistic outlook follows a harrowing year of losses amid “diabolical” conditions as the coronavirus pandemic continues to weigh on the carrier.

It posted a full-year net loss of $1.73 billion, with revenue for the 12 months to June 30 sliding 58.4 per cent to $5.93 billion as international and domestic border closures significantly disrupted air travel.

On an underlying basis, which excludes one-off costs such as redundancies and aircraft write-downs, Qantas swung to a pre-tax loss of $1.83 billion from a profit of $124 million a year ago.

The airline said it had lost a total of $16 billion in revenue due to COVID-19 so far, with minimal international travel and multiple waves of domestic border restrictions continuing to hit travel demand.

Its domestic division posted an underlying earnings loss of $669 million as outbreaks of the virus triggered a series of state lockdowns.

The international and freight division reported an underlying earnings loss of $1 billion for the year.

“Despite the uncertainty that’s still in front of us, we’re in a far better position to manage it than this time last year. We’re able to move quickly when borders open and close. We’re a leaner and more efficient organisation,” Mr Joyce said.

Despite this, Qantas has warned recent domestic and trans-Tasman border closures will result in a $1.4 billion hit to group earnings in the first half of 2021/222.

The airline will extend the stand-downs of domestic crew and airport staff beyond the eight weeks, as previously announced, if borders remain closed.

The airline will not pay any dividend for the year.