Australia’s Qantas Group has continued its ability to deal with the short and likely long-term impacts of the Coronavirus crisis. The airline has also extended flight cancellations from end-May through to the end of July, which was still at pre-Coronavirus levels — but some capacity can be added back in if domestic and Trans-Tasman restrictions ease in coming weeks.
Given the consequences of this crisis for aviation, Qantas released a more detailed update of its liquidity position in place of a quarterly trading update. The announcement supersedes assumptions outlined at Half Year Results in February 2020.
The Qantas Airbus A380 Fleet Limbo
Qantas has a newly refurbished A380 fleet. The birds were expected to fly until the end of this decade when the airline intended to have fully-fledged Project Sunrise operations up and running. But with recent developments, it is now unclear how many of their superjumbos (they have 12 in total) will return to service, as Qantas recomputes the size and composition of its long-haul fleet for a post-lockdown world. Qantas’ A380 planes fly the routes to the United States, Singapore, and London.
The initial easing of government restrictions suggests some domestic travel may start to return before the end of July – though initial demand levels are hard to predict. The Group will continue to monitor the situation and can increase capacity with a minimum lead time of around one week.
The Group is also providing early access to annual and long service leave in addition to the significant leave balances among long-standing workers. A variety of other welfare mechanisms remain available.
According to Qantas Group CEO Alan Joyce, “Our cash balance shows that we’re in a very strong position, which under the circumstances we absolutely have to be. We don’t know how long domestic and international travel restrictions will last or what demand will look like as they’re gradually lifted.”
After initially scrambling to come to terms with the magnitude of the situation and the grounding of almost entire fleets, airlines are beginning to regroup and make plans for post-crisis recovery scenarios.
The airline Group CEO added that the company has not made any decisions yet and that the outcome of the fleet review would depend on when international markets open.