Australians look set to have good overseas flights in the coming months, but may pay more for regional travel when Covid lockdown restrictions are eased.
Qantas is now taking bookings for international flights before resuming in mid-December, with Sydney to Singapore being one of the first to be available.
The federal government has yet to lift the March 2020 ban on traveling abroad for a holiday, but the flying kangaroo airline is confident that 80 percent of the workforce and adult population will be fully vaccinated before Christmas.
The Covid pandemic has seen Qantas bolster its market share, to the point that it had 74 percent of the domestic market by March 2021, while its main rival Virgin Australia struggled to survive.
Australians appear to have good overseas flights but may pay more for regional travel when Covid restrictions are relaxed
However, Qantas is not nearly as dominant in the international space with Singapore Airlines, Air New Zealand and British Airways set to provide a lot of competition.
IBISWorld aviation analyst Tom Youl said Qantas would likely offer good deals in late 2021 and early next year to allow Australians to fly abroad again, after being kept at home for nearly two years.
‘That’s a possible strategy. There is a pretty good case that discounts are the way to boost travel again,” he told the Daily Mail Australia.
“We’re talking about that international market, getting people back on the air and building that scale, where scale is essential to airline profitability.”
During its past fiscal year, Qantas posted an after-tax loss of $1,728 billion with international holidays banned and state borders closed, on and off.
As of late 2020, after Melbourne came out of its major lockdown, Qantas offered domestic airfare to lure travelers before prices rose again.
Qantas is now taking bookings of international flights before resuming in mid-December, with Sydney to Singapore being one of the first to be available (Pictured is the Rain Vortex Backwater at Changi Airport)
Qantas International Travel Plan
MIDDLE OF DECEMBER: Singapore, United States, Japan, United Kingdom and Canada with Boeing 787s
New Zealand as travel bubble reopens with Australia
Airbus A330s and 737s and A320s for services to Fiji
FEBRUARY 2022: Hong Kong
APRIL 2022: Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg
APRIL 2022: Budget subsidiary Jetstar resumes international flights
JULY 2022: Sydney to Los Angeles on A380s
NOVEMBER 2022: Sydney to London via Singapore with Darwin instead of Perth as possible transit point
Mr Youl said that strategy was likely for overseas flights.
“As domestic flights picked up again, cheap flights became available, but from there we saw prices rise quite steadily, airfare rates a little higher than what we saw prior to the Covid pandemic,” he said.
“We’ll probably see a similar playbook implemented by Qantas.”
Before the pandemic, Australians were offered cheap airfares as Virgin Australia lost year after year to take market share from Qantas.
Virgin is now under the control of US private equity group Bain Capital, meaning it is more focused on cutting costs than challenging Qantas’ dominance.
Regional airline Rex has since moved to the more lucrative routes of Sydney, Melbourne and Brisbane, as Qantas competed more actively on the less profitable regional routes to become the dominant player outside the capitals.
With competition on regional routes easing, prices were expected to rise as Covid restrictions within Australia were gradually eased.
“There will be a fairly high demand for domestic travel even if international borders open,” said Mr Youl.
“In terms of aviation space, there will be strong demand there, so there are pretty strong arguments for domestic airfare, especially to regional areas, to be increased over the next two years.”
Some overseas flights are cheaper than flying to parts of regional Australia.
An economy one-way Qantas flight from Sydney to Singapore on Thursday, December 18 was available for $741.
Some overseas flights are cheaper than flying to parts of regional Australia. An economy one-way flight from Sydney to Singapore on Thursday, December 18 was available for $741
By comparison, a return flight from Sydney to Broken Hill on Rex in September and October costs $778, which is certainly a lot more expensive per kilometer than Singapore
By comparison, a round trip flight with Rex from Sydney to Broken Hill, in the far west of New South Wales, in September and October costs $778, which is certainly a lot more expensive per kilometer than Singapore.
Qantas announced on Thursday that it would fly from Australia to Australia from mid-December high vaccination coverage first world destinations including the United States, Canada, the UK, Singapore, Japan and New Zealand, along with Fiji.
The resumption of international flights is also based on the removal of the National Cabinet’s limits on returning Australian travelers who have been fully vaccinated.
Qantas chief executive Alan Joyce admitted on Thursday that a requirement for fully vaccinated Australians to quarantine for 14 days on their return from abroad posed a threat to profitable international travel.
Qantas CEO Alan Joyce admitted on Thursday that a requirement for fully vaccinated Australians to quarantine for 14 days after returning from abroad posed a threat to profitable international travel.
“One of the biggest unknowns in all of this is the quarantine requirements for fully vaccinated travelers entering Australia and there are a number of trials starting across the country,” he said.
“If it’s still 14 days in a hotel, the demand will be very low and this schedule is not feasible.”
Qantas announced that flights to cities in Asia and South Africa with low vaccination coverage and high numbers of Covid-19 cases would not restart until April 2022.
Those destinations include Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg.
What are the four stages of opening?
A. Vaccinating, preparing and testing (from 14 July)
Arrival caps halved to 3,035 per week; early, severe and short lockdowns if outbreaks occur; trials of seven-day home quarantine for vaccinated arrivals in South Australia; medicare vaccination certificates available in apps like Apple Wallet
B. Post-vaccination phase (when 70 percent will be stung, expected by the end of this year)
Lockdowns less likely but possible’; vaccinated people face reduced disabilities; limits for unvaccinated arrivals increased; a larger limit for vaccinated arrivals with ‘reduced quarantine requirements’; limited entry for students and economic visa holders
C. Consolidation Phase (when 80 percent is pricked, time not announced)
Removal of all outbound travel restrictions for vaccinated travellers; no limits for vaccinated arrivals; increased limits for students and visa holders; more travel bubbles arise with countries like Singapore; booster shots rolled out
D. Final phase (percentage or time not disclosed)
Unlimited arrivals for vaccinated people without any quarantine and unlimited arrivals for unvaccinated people with pre-departure and on-arrival testing