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This is not the best time to be flying overseas – Qantas and Jetstar are poised to slash international capacity by around 90% until at least the end of May 2020 and the federal government is urging Australian travellers abroad to return home.

Quarantine restrictions are getting so heavy in overseas destinations that even the Central African Republic is demanding that visitors “self-isolate” for 14 days after arrival. Countries are beginning to seal their borders.

The Australian dollar dived to a near two-decade low of 59.9 US cents (market mid-rates this morning). The Australian unit is worth 49.5 British pence and 54 European cents. It is now on par with the New Zealand dollar.

A statement by Australia’s Department of Foreign Affairs and Trade (DFAT) issued today states:

“We now advise all Australians: do not travel overseas at this time. This is our highest advice level (level 4 of 4).

“If you are already overseas and wish to return to Australia, we recommend you do so as soon as possible by commercial means.

“Regardless of your destination, age or health, if your overseas travel is not essential, consider carefully whether now is the right time.

“As more countries close their borders or introduce travel restrictions, overseas travel is becoming more complex and difficult. You may not be able to return to Australia when you had planned to. Consider whether you have access to health care and support systems if you get sick while overseas. If you decide to return to Australia, do so as soon as possible. Commercial options may become less available.”

Virgin Australia will suspend all international flights at the end of this month and Qantas flights will be cut to the bone. A Qantas Group statement blamed the looming capacity cuts on “significant falls in travel demand due to Coronavirus, and new government restrictions across multiple jurisdictions in recent days”.

To be phased in from the end of March 2020 onwards:

  • Total Qantas Group International capacity will be cut by around 90% until at least the end of May 2020. This is up from a 23% reduction for the fourth quarter of FY20 announced last week and largely reflects the demand impact of severe quarantine requirements on people’s ability to travel overseas.
  • Total Group Domestic capacity will be cut by around 60% until at least the end of May 2020. This is a major increase from the 5% reduction for the fourth quarter of FY20 and reflects a rapid decline in forward travel demand due to government containment measures, corporate travel bans and a general pullback from everyday activities across the community.
  • This represents the grounding of around 150 aircraft, including almost all of the Group’s wide-body fleet.
  • Previously announced cuts in place from end-May through to mid-September remain in place and are likely to be increased, depending on demand.

The route-by-route detail of these changes across Qantas and Jetstar is currently being worked through and will be announced in coming days.

A statement said that despite the deep cuts, the national carrier’s critical role in transporting people and goods on key international, domestic, routes would be maintained.

“This includes using some domestic passenger aircraft for freight-only flights to replace lost capacity from regular scheduled services. Qantas’ fleet of freighters will continue to be fully utilised.”

 PEOPLE IMPACT

The precipitous decline in demand and resulting cuts to flying mean that the Qantas Group is confronted with a significant labour surplus across its operations. Travel demand is unlikely to rebound for weeks or possibly months and the impact of this will be felt across the entire workforce of 30,000 people.

The Qantas Group is working to manage this impact as much as possible, including through the use of paid and unpaid leave. This will be in addition to measures already announced, including three months of no pay for the CEO and Chairman, significant pay cuts for Group Executive Management and Board members, and cancelling of annual bonuses and an off-market buy back.

CUSTOMER IMPACT

The Group has issued a wide-ranging booking waiver for customers wanting to suspend their travel plans.

Customers with existing bookings on any domestic or international flight until 31 May 2020, who no longer wish to travel, can cancel their flight and retain the value of the booking as a travel credit voucher. This needs to be processed by 31 March 2020.

Customers who make a new domestic or international booking and later decide they no longer wish to travel, can cancel their flight and retain the value of the booking as a Qantas travel credit or Jetstar travel voucher. This applies to bookings made from 10 March 2020 until 31 March 2020 for travel before 31 May 2020.

To access this offer, Qantas has advised:

  • Qantas customers should visit Manage Booking on Qantas.com, select ‘Cancel’ and then ‘Voucher’.
  • Jetstar customers should go to Manage My Booking on Jetstar.com.

The carrier advises that if flights were booked through a travel agency or third-party website (e.g. Webjet, Booking.com), customers will need to contact them directly to make changes to their booking.

“Customers should not call the contact centres,” Qantas adds.

“Due to high demand, we are experiencing long call wait times.”

Edited by Peter Needham