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Qantas and Jetstar cut capacity as demand decreases

The Qantas Group has confirmed that it has cut capacity and is adjusting flying levels to better match travel demand in light of the sudden growth in COVID-19 cases in Australia.

The Qantas Group had earlier scheduled 102% of pre-COVID levels for the third quarter of FY22. However, as the demand remains low due to the sudden increase in COVID-19 cases in Australia, the group now expects domestic capacity for the third quarter of FY22 to be at around 70% of pre-COVID levels. The company says that the schedule changes are focused on reducing frequency of services and size of aircraft “to minimise inconvenience for passengers as much as possible”.

The Group’s total international capacity for the same period will fall from 30% to around 20% 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. Other markets, such as London, Los Angeles, Vancouver, Johannesburg and India (where the carrier launched flights to from Sydney and Melbourne) are continuing to perform well.

Qantas and Jetstar continue to have 100% of their available Australian-based crew stood up, which has helped to minimise the resourcing impacts of some needing to self-isolate during the summer peak. This 100% crewing level will be maintained despite the capacity reductions announced today, giving both airlines a significant buffer to manage ongoing isolation requirements and resulting in a more reliable schedule for passengers.

Related: Qantas to launch nonstop flights to Rome

Alan Joyce, CEO, Qantas Group, said:

The sudden uptick in COVID cases is having an obvious impact on consumer behaviour across various sectors, including travel, but we know it’s temporary. Thankfully, Australia has one of the world’s highest vaccination rates and the Omicron variant is milder than its predecessors. So, as challenging as this current phase is, we’re optimistic that it is likely to fast track a return to normal. People are already looking beyond what’s happening now with early bookings for the Easter holidays in April looking promising for both domestic and international.

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He added:

We have the flexibility to add capacity back if demand improves earlier than expected, but 70 per cent still represents a lot of domestic flying and it’s a quantum improvement on the levels we faced only a few months ago. Our focus on cash positive flying remains, notwithstanding some of the costs that we’ll have to absorb from this sudden drop in demand. Can I thank our people who have done an outstanding job of helping over a million Australians travel over the summer holidays, and to our customers for their ongoing understanding as we make our way through these latest challenges. This is a difficult time right across the community, but something we’ll get through.

Qantas says that an assessment on the financial impact of these changes will be given at the Group’s half year results in late February, by which time a clearer picture will have emerged on swing factors such as actual demand levels; potential loosening or tightening of travel restrictions in countries overseas; and consumer response to the reopening of Western Australia next month.

Passengers who are already booked on Qantas or Jetstar flights will be contacted directly by Qantas or their Travel Agent from late January if their booking has been impacted by a flight cancellation. The flag carrier of Australia has also stated that it is asking to please wait to hear from Qantas or their Travel Agent before taking any action, including cancelling their flight. This will help avoid long wait times on customer contact channels. The Sydney-based airline adds that when it cancels a flight, it rebooks the passenger on the next available flight to their booked destination (if possible), at no additional cost. Alternatively, they can choose a flight credit or a refund. Customers won’t be charged any change or cancellation fees.

Meanwhile, Qantas recently placed an order for 20 Airbus A321XLR and 20 A220 aircraft with purchase rights for 94 more aircraft.

Featured image by Qantas

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