Qantas, Jetstar to slash Asia flights as coronavirus hits bottom line
Qantas and Jetstar will cut back flights to Asia as the deadly coronavirus continues to cause chaos, with the airline’s bottom line set to take a $150 million hit.
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Qantas and Jetstar will cut the number of flights to Asia by about 15 per cent and wind back domestic services in response to the coronavirus outbreak.
The airline has also warned the outbreak is set to wipe between $100 million and $150 million from its bottom line in the second half of this financial year.
It had already announced it would suspend its Sydney-Shanghai service – its sole route to mainland China – until at least the end of May.
Chief executive Alan Joyce this morning said Qantas would cut its wider Asian capacity by 16 per cent until at least the end of May, impacting flights from Australia to China, Hong Kong and Singapore.
Jetstar will reduce its capacity to Asia by 14 per cent, impacting flights to Japan and Thailand.
“Coronavirus resulted in the suspension of our flights to mainland China and we’re now seeing some secondary impacts with weaker demand on Hong Kong, Singapore and to a lesser extent Japan,” Mr Joyce said.
“Other key routes, like the US and UK, haven’t been impacted. We’ve also seen some domestic demand weakness emerging, so we’re adjusting Qantas and Jetstar’s capacity in the second half.”
Qantas will reduce its domestic capacity by 2 per cent and flights to New Zealand by 6 per cent amid softer travel conditions.
It said it will contact impacted travellers to offer them alternative flights.
Mr Joyce also struck a defiant tone on industrial action disrupting Jetstar, saying the airline will not sweeten its existing offer.
Jetstar was forced to cancel about 50 flights on Wednesday as ground staff and baggage handlers walked off the job.
“Our position on wages is crystal clear,” Mr Joyce said.
“We’re offering 3 per cent a year, which is above inflation and above what most companies are offering. No amount of industrial action will change our stance, because we can’t afford to lose our discipline on costs.
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“That would ultimately have a very negative impact on jobs, and the challenges facing all airlines right now underscores why.”
Qantas this morning reported a 6.2 per cent fall in net profit to $648 million for the six months to December.