Qantas Cites ‘Pent-Up Demand’ in Laying Out Overseas Restart
Qantas Cites ‘Pent-Up Demand’ as It Lays Out Overseas Restart
(Bloomberg) -- After 18 months closed off from the rest of the world, Australians are so keen to travel overseas that Qantas Airways Ltd. is bringing its giant A380s out of hibernation early to take on the task.
The desire to fly overseas is running at double or even triple normal levels, Chief Executive Officer Alan Joyce said in an interview with Bloomberg TV on Thursday, citing research carried out by the airline. There’s “huge pent-up demand,” he said.
After writing down and grounding its A380s for what it said would be at least three years at the start of the pandemic in 2020, Qantas is giving the superjumbo a new lease of life. The once-unloved behemoth is now at the center of Joyce’s bold plan to restart overseas services from the end of this year.
Australia’s vaccination program, after falling behind schedule early in the year, is now picking up. And under the government’s phased reopening plan, inoculated Australians will be able to travel overseas once 80% of the eligible population are protected. At current rates, that target should be reached in December.
Read more: Qantas Lays Out Overseas Restart as Covid Jabs Pick Up Pace
Flights to Covid-safe destinations such as Singapore, the U.S., Japan, the U.K. and Canada will start from mid-December, while Hong Kong services will follow in February, Sydney-based Qantas said Thursday. Services to popular holiday destinations including Bali, Bangkok and Phuket, will be pushed back to April from due to relatively low levels of vaccinations and high rates of infections, Qantas said.
Five of Qantas’ 12 A380s, which are still mostly parked in the Californian desert, will be revived to fly between Sydney and Los Angeles from July, and between Sydney and London -- via Singapore -- from November. Just two of the planes, which could carry more than 480 passengers, will be retired. The others could all be back in service by early 2024, according to Qantas.
“Public sentiment is changing dramatically,” Joyce said in the interview. “People are saying, ‘we need to have a path out of Covid, a path back to our pre-Covid lives.’”
Qantas has a vested interest in leading the way, as it charts a recovery from a pandemic that’s expected to have cost it A$20 billion ($15 billion) in lost revenue by the end of 2021. It reported a A$1.73 billion loss for the year ended June 30 on Thursday, making the past two years the worst period on record for the airline.
Closed Border
Australia largely closed its international border in March last year and citizens allowed to return home under a capped system must quarantine for two weeks in a hotel at a cost of as much as A$3,000 for an adult. The government also barred citizens from leaving.
Still, there’s some opposition from some Australian states to opening the international border even at high vaccination thresholds, given a resurgence in cases that has sent Sydney and Melbourne, Australia’s two largest cities, back into lockdown. And quarantine arrangements for returning travelers once the border reopens aren’t yet clear, a key factor in determining actual demand.
That’s not deterring Joyce. The airline’s latest ad is as much a campaign to get vaccinated as it is a promotion for Qantas. The advertisement follows several passengers as they receive Covid-19 jabs before flying overseas to visit family or visit Disneyland.
The A380 will be “the perfect vehicle” to meet demand for flights to the U.S. and the U.K., Joyce said.
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