Qantas Group projects domestic capacity to return to 90% of pre-COVID levels in Q4 FY21

Qantas Group has released encouraging projections for Q4 FY21, ending June 30, highlighting its recovery from the effects of the COVID-19 pandemic on air travel. While Group domestic capacity should reach 90% of pre-COVID levels for the last quarter, subsidiary Jetstar looks likely to exceed 100% thanks to a strong leisure demand. Forward projections into FY22 should see Qantas operating at 107% pre-COVID level and Jetstar at 120%.

According to Group CEO Alan Joyce: “Corporate travel, including the small business segment, is now back to around 65% of pre-COVID levels, and increasing month-on-month.” The Group had been hard hit by lockdowns during Christmas and the New Year which cost it an estimated AU$400 million (EBITDA), while the Easter lockdown that effected Brisbane cost the Group an estimated AU$29 million (EBITDA).

The Group continues to respond to new travel demand patterns, which has led to 34 new domestic routes being added since July last year. This continued focus on maintaining its strategic and competitive position, including its network and frequency advantages, puts the Group’s market share at around 70%. During this fourth quarter, 90% of the Group’s aircraft will be active, compared with just 25% at the height of the national lockdown in mid-2020. Qantas and Jetstar will have more aircraft operating on domestic and resources markets than pre-COVID, including all Boeing 737s and Airbus A320/A321s.

Preparations for the reopening of international borders and the resumption of international flights in late October (beyond flights between Australia and New Zealand) are continuing, including reactivating aircraft and training employees. “This is the longest run of relative stability we’ve had with domestic borders for over a year, and it’s reflected in the strong travel demand we saw over Easter and the forward bookings that are flowing in each week from all parts of the market,” said Joyce, adding that: “The Australian Government’s half-price fares program is having a direct and indirect impact on the sector.” In relation to international flights, Joyce commented: “The vaccination program is absolutely key to restarting international flights in and out of Australia. While there have clearly been some speedbumps with the vaccine rollout, we are still planning for international flights to resume in late October. We remain in regular dialogue with the Government.”