Qantas has outlined its plans for restarting international flights in December (vaccination being the key), while posting an enormous loss after a pandemic-afflicted full year – while Air New Zealand has declared a large loss and Italian airline Alitalia has cancelled all flights from 15 October 2021 and is preparing to close for good.
In the worst year for aviation ever recorded, surviving represents a triumph of perseverance and good management. Worldwide air passenger numbers plunged 60.2% in 2020 compared to the 4.5 billion who flew in 2019. The collapse in air traffic is the worst recorded since global air travel started being tracked around 1950.
FIRST, A WORD ON ALITALIA.
Italian newspaper Corriere Della Sera estimates that about 250,000 people are due to fly with Alitalia after 15 October this year. They have two options: replace their flights with an equivalent Alitalia flight before that date, or receive a full refund.
According to Executive Traveller, a new state-backed Italian airline named ITA (Italia Trasporto Aereo) will inherit some of Alitalia’s aircraft, staff and assets such as airport lounges – “but not Alitalia’s frequent flyer program, which will be abandoned in favour of an all-new loyalty scheme to be run by a third party”.
Those with long memories might recall certain similarities with Swissair in 2002.
ITA aims to start flying on the same day Alitalia stops flying, according to the site POLITICO Europe. The same site says ITA plans to bid to buy the Alitalia brand and fly in its livery. While Alitalia employed 11,000 staff, ITA has fewer than 3000 workers but intends to hire another 2700 over the next three or four years.
NOW: QANTAS AND ITS INTERNATIONAL RESTART PLANS.
Qantas says on that on current projections, Australia is expected to reach a vaccination threshold of 80% in December 2021, which would trigger the gradual reopening of international borders. Qantas even plans to bring its A380s back into service next year.
“Similarly, key markets like the UK, North America and parts of Asia have high and increasing levels of vaccination. This makes them highly likely to be classed as low risk countries for vaccinated travellers to visit and return from under reduced quarantine requirements, pending decisions by the Australian Government and entry policies of other countries.”
Qantas said yesterday that the launch of flights to destinations that still have low vaccine rates and high levels of Covid infection will now be pushed out from December 2021 until April 2022 – including Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg.
“Levels of travel demand – and therefore, capacity levels – will hinge largely on government decisions on alternative requirements to mandatory hotel isolation for fully vaccinated travellers.
“Assuming current projections hold and the 80% vaccine threshold is met in December, Qantas and Jetstar plan to trigger a gradual restart as outlined below. If those assumptions change or dates move, the restart plans will adjust accordingly.”
SUMMARY OF QANTAS INTERNATIONAL RESTART PLANS
- From mid-December 2021, flights would start from Australia to Covid-safe destinations, which are likely to include Singapore, the United States, Japan, United Kingdom and Canada using Boeing 787s, Airbus A330s, and 737s and A320s for services to Fiji.
- Flights between Australia and New Zealand will be on sale for travel from mid-December 2021 on the assumption some or all parts of the two-way bubble will restart.
- Qantas’ ability to fly non-stop between Australia and London is expected to be in even higher demand post-Covid. The airline is investigating using Darwin as a transit point, which has been Qantas’ main entry for repatriation flights, as an alternative (or in addition) to its existing Perth hub given conservative border policies in Western Australia. Discussions on this option are continuing.
- Five A380s will return to service ahead of schedule. These would fly between Sydney and LA from July 2022, and between Sydney and London (via Singapore) from November 2022. The A380s work well on these long-haul routes when there’s sufficient demand, and the high vaccination rates in both markets would underpin this.
- Qantas will extend the range of its A330-200 aircraft to operate some trans-Pacific routes such as Brisbane-Los Angeles and Brisbane-San Francisco. This involves some technical changes that are now being finalised with Airbus.
- Flights to Hong Kong will restart in February and the rest of the Qantas and Jetstar international network is planned to open up from April 2022, with capacity increasing gradually.
- Qantas to take delivery of three 787-9s (new aircraft that have been in storage with Boeing) during FY23 to operate additional flights to key markets as demand increases.
- Jetstar to take delivery of its first three Airbus A321neo LR aircraft from early FY23, the extended range of which will free up some of its 787s to be redeployed on other markets.
MEANWHILE, QANTAS HAS POSTED A VERY BIG LOSS
Main elements:
- Underlying Loss Before Tax: AUD 1.83 billion
- Statutory Loss Before Tax: AUD 2.35 billion
- AUD 12 billion revenue impact from COVID-19 crisis in FY21
- Net debt reduced in 2H21 to AUD 5.9 billion
- Statutory Net Free Cash flow of AUD 267 million in 2H21
- Restructuring program ahead of target, delivering AUD 650 million in year one
- Total liquidity of AUD 3.8 billion, providing buffer against uncertainty
- 95% of domestic flying cash positive
- Record performance by Qantas Freight mostly offsetting cost of idling international operations
- Continued strong cash generation, growth in members at Qantas Loyalty
- Updated plan for restart of international services from end-2021
- Ongoing flexibility for customers in response to booking uncertainty
The Qantas Group said that although it had posted a substantial full year loss as a result of the Covid crisis – it had started financial year 2022 “in a fundamentally better position to deal with uncertainty and manage its recovery compared with 12 months ago”.
ACROSS THE TASMAN, AIR NEW ZEALAND ALSO ANNOUNCED A LOSS.
Before other significant items and taxation Air New Zealand’s loss was NZD 440 million for the 2021 financial year – the carrier’s first full 12-month period of operation with Covid-19 related international travel restrictions. Using the same metric, the company reported an NZD 87 million loss for the 2020 financial year.
Air New Zealand financial results summary
- Operating revenue of NZD 2.5 billion, down 48% on the prior year
- Cargo revenue up 71% on the prior year, supported by the New Zealand and Australian Government’s IAFC, MIAC and IFAM schemes (the airfreight support schemes)
- Loss before other significant items and taxation of NZD 440 million
- Loss before taxation of NZD 411 million
- Domestic capacity rebounded strongly as the year progressed, reaching 93% of pre-Covid for the three months ending July, driven by strong leisure demand and the return of corporate customers
- Latest domestic nationwide lockdown expected to negatively impact financial operating performance
- Liquidity of NZD 1.3 billion as at 24 August 2021, comprised of NZD 183 million cash and NZD 1.15 billion of undrawn funds on the Government standby loan facility
- Dividends remain suspended
- Planned capital raise deferred to first quarter of calendar year 2022
Air New Zealand chairman Dame Therese Walsh said the 2021 financial result reflected the reality of a year in which the airline was unable to fly two-thirds of its passenger network.
“In a severely constrained environment, Air New Zealand maintained cost discipline, focusing on delivering with excellence in the areas in its control. The return of a strong domestic business and growth in the cargo services that underpin our key export markets was a reminder of the airline’s crucial role in New Zealand’s infrastructure,” she said.
Air New Zealand chief executive Greg Foran said the 2021 financial year was one in which the airline played the hand it was dealt, kept planes flying every day and took some important steps in the delivery of its refreshed strategy, Kia Mau.
“Our people developed new capabilities and dexterity, adapting quickly when conditions changed. Although the return of long-haul travel seems some time away, the changes the team made this year will serve us well when it returns,” Foran said.
Written by Peter Needham
