$12 to Fly One of World’s Busiest Routes Is Cost of Recovery

(Bloomberg) -- Air fares between Sydney and Melbourne, one of the world’s busiest routes, could fall as low as A$19 ($12) to persuade the public to fly after the coronavirus pandemic, according to Qantas Airways Ltd.

Qantas’s low-cost airline Jetstar could charge between A$19 and A$39 for those tickets once Australia lifts travel restrictions, Qantas Chief Executive Officer Alan Joyce said on a call with reporters on Tuesday.

“We’ve no doubt that there’s a need for some stimulation to start a lot of the market traveling again,” Joyce said. “We’ll still cover our cash costs on those flights.”

Sydney-Melbourne is the fifth-busiest route globally, with about 10 million seats a year, according to OAG Aviation Worldwide. Jeju-Seoul in South Korea ranks top with 17.4 million seats.

Qantas expects the domestic market to open before overseas routes. As it borrowed yet more funds to weather the crisis, the airline said Tuesday that demand to fly overseas could take years to return. It has extended international flight cancellations until the end of July and is only operating at about 5% of its usual passenger capacity domestically.

Qantas shares closed up 1.7% after advancing as much as 5.6% earlier Tuesday.

©2020 Bloomberg L.P.

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