Qantas Summer Update

There has been no summer break for Qantas. In fact, quite the opposite with lots of developments since school broke up.

On the plus side there has been plenty of Christmas cheer for Qantas.

There is much pent-up demand for travel, especially from people wanting to see family and friends and except for WA the Premiers are finally keeping borders open.

Qantas has lodged its biggest aircraft order with European manufacturer Airbus as part of a decade-long domestic fleet renewal. A fleet of 134 A320neo and A220 jets will replace Qantas’s existing domestic Boeing 737s and 717s. As well as having a range of 8700km compared to the 737’s 5425km which could unlock new routes these new planes are much quieter and more spacious. In addition, Qantas A380s which many thought would not survive the pandemic will be back in 2022 on the Sydney to Los Angeles route.

Qantas also announced that they will be switching to sustainable aviation fuel on its flagship London route which is estimated to help reduce its carbon emissions by around 10 per cent.

Despite the reduction in flying, Qantas had managed to reduce net debt from $5.9 bn in June 2021 to $5.65 bn, thanks in part to the sale of land at Mascot. As a result, analysts including Macquarie Bank are very bullish about Qantas and believe the airline will emerge from the pandemic with higher earnings than before. The investment bank’s research team said Qantas had become a structurally better business.

However, it hasn’t been all smooth flying for Qantas over summer. This period has presented Qantas with several significant challenges.

Qantas has slashed capacity by a third as rising Omicron cases hampers the demand for Australians to travel by air. Qantas now expects domestic capacity to be at around 70 per cent of pre-Covid levels, down from the 102 percent that had been planned. International capacity is expected to fall from 30 per cent to around 20 percent of pre-Covid levels. This reduction is driven by increased travel restrictions in countries like Japan, Thailand and Indonesia and is mostly impacting Jetstar’s leisure routes.

Qantas international cabin crew have overwhelmingly rejected a new four-year pay deal, that sought to freeze wages for two-years and roster staff on more standby shifts. Qantas has taken the unprecedented step of applying to terminate the current EBA to achieve new rostering arrangements for international cabin crew. The Fair Work Commission will consider the views of employees as well as Qantas in making its decision on the application to terminate. Under the Fair Work Act, the FWC must find that it is appropriate and not contrary to the public interest to do so.

Qantas also flagged an expected loss of more than $1.1 bn for the first half of the 2022 financial year due to the crippling of travel by the pandemic. The last six months had been the worst of the pandemic for the company, Mr Joyce said, with Qantas and Jetstar reduced to just 18 percent of earlier levels.

Source: Qantas move to become more sustainable by Emily Cosenza The Australian Dec 14th, Qantas fleet renewal to deliver new domestic travel experience by Robyn Ironside The Australian Dec 16th, Qantas flying high after Covid by Matt Bell The Australian Dec17th, Qantas cabin crew reject new pandemic pay deal by R Ironside The Australian Dec 22nd, Airbus A380 making a comeback by R Ironside The Australian Dec 29th, Qantas to dump EA for 2500 Cabin Crew by R Ironside The Australian Jan 20th.