Australians are unlikely to fly to the United States or UK on Qantas for another year, with its chief executive outlining that this could “potentially” happen “by the end of 2021”.
“For some of our big destination like the United States and the UK, it’s going to need a vaccine given the high prevalence of the virus in both of those locations,” Qantas Group boss Alan Joyce said at the company’s AGM in Sydney on Friday.
“But we are getting more and more confident about the opportunities and the potential for a vaccine in helping getting those operations up by potentially by the end of 2021.”
He said it was “going to take some time to recover international travel back”.
Mr Joyce had previously said he did not expect that international flights, except for New Zealand, would resume before July 2021.
The company has been running some very limited international flights, largely to help the Federal Government with repatriating Australians stuck overseas.
It was also revealed that the company, which owns both Qantas and Jetstar, is expecting a further $100m in losses for the first quarter of this financial year, as border restrictions drag on due to COVID-19.
“The unexpected closure of several domestic borders in July meant our recovery has been delayed,” Mr Joyce said.
“We had expected group domestic to be operating at about 60 per cent of pre-COVID levels by now. Instead, the continued border closures mean capacity is now below 30 per cent.
“This delay resulted in a $100 million negative impact on earnings for the first quarter of FY21, and will have an impact on Q2 as well.”
The flying kangaroo recorded a $2 billion loss for 2019-20, with the coronavirus pandemic slashing its full-year revenue by 21 per cent.
The company’s chairman Richard Goyder used the AGM to criticise ongoing domestic border closures.
“Even as numbers in Victoria come under control and New South Wales shows how small clusters can be managed, there is some frustrating inertia around the Queensland and Western Australian borders,” he said.
“And that seems to ignore the broader economic and social risk involved with staying shut — especially as Federal income support winds down.”
However, Mr Joyce said that “assuming” Queensland and NSW borders open in coming weeks, the airline could go back to flying about half of its pre-COVID domestic flights by Christmas.
“We know that latent travel demand is strong,” he said.
The airline had just bought a new fleet of Airbus A380 when COVID-19 hit.
Mr Joyce said it was “heartbreaking” that the large planes with significant first class capacity had been sent straight to “the desert for storage”.
“They’ll be there for some years,” he said.
Union takes aim at virtual AGM
Around 18,000 of the company’s staff are still stood down.
The airline’s AGM was done virtually this year due to COVID-19, meaning shareholders could only write in questions.
On Friday, the Transport Workers Union held an “alternative AGM” and used an actor, complete with an Irish accent, to play Mr Joyce.
In a parody of recent events, the fake Mr Joyce addressed the union’s concerns about outsourcing workers by saying outsourcing would “take the pressure off everybody”.
Mr Goyder hit back at these claims during the AGM, dubbing the union “misleading”.
“They’ve been extremely misleading and have been overlooking the fact that COVID has presented extreme times,” he said.
Airline will chase Asian markets instead
The airline flagged plans to prioritise Asian markets as speculation mounts about Australia forming COVID-19 “bubbles” with countries with low case numbers.
Prime Minister Scott Morrison flagged last month that international arrivals from South Korea, Japan and countries in the Pacific could potentially avoid hotel quarantine.
“Both Qantas and Jetstar are keeping a close eye on new markets that might open up as a result of these bubbles — including places that weren’t part of our pre-COVID network,” Qantas chairman Richard Goyder said.
“By early next year, we may find that Korea, Taiwan and various islands in the Pacific are top Qantas destinations while we wait for our core international markets like the US and UK to re-open.”
The airline has also announced two of its board’s directors will go and will not be replaced, reducing its size by 20 per cent.
“We consider this appropriate under the circumstances when the company is scaling back at all levels,” Mr Goyder said.
Barbara Ward and Paul Rayner have been on the company’s board since 2008.