Qantas eyes pivot to Asia destinations in Covid-19 recovery

Qantas is eyeing new international destinations and a larger share of Australia’s domestic market as it emerges from the Covid-19 crisis, company executives said Friday. The airline is keeping an eye on the potential for travel bubbles with parts of Asia, chairman Richard Goyder said at the flag carrier’s annual general meeting. “By early next year, we may find that [South] 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 reopen,” he states. CE Alan Joyce said the unexpected closure of state borders in July to cope with a fresh wave of Covid-19 cases had delayed Qantas and Jetstar’s domestic recovery plans. Domestic capacity is running at under 30% of what it was pre-Covid-19, whereas the group had expected it to be back to about 60% by now. “This delay resulted in a A$100m negative impact on earnings for the first quarter of FY21, and will have an impact on Q2 as well,” he told shareholders. Still, he expects the upturn in demand to be swift once Australian states reopen their borders and says Qantas has the liquidity to manage the situation. “Because our cash flow from continuing operations is positive before one-offs like redundancies, we could continue at this level of flying for a very long time – if we had to,” he adds. Joyce predicts that the group will be at up to 50% of domestic capacity by Christmas if Queensland opened its borders to New South Wales. He adds that due to changes in strategy at main rival Virgin Australia, Qantas Group’s share of the domestic market could rise from 60% to 70% over time.<br/>