Qantas and Jetstar to cut flights to Asia, lose up to $150m due to coronavirus crisis

The Federal Government has responded to Qantas and Jetstar’s decision to cut services to Asia due to the coronavirus crisis.

Australia’s trade minister says it’s “disappointing but understandable” Qantas will slash its services to Asia due to the coronavirus crisis.

Qantas announced today flights to Asia will be cut by 16 per cent until May at least, impacting flights to mainland China, Hong Kong and Singapore.

At the same time, Jetstar will cut its capacity to Asia by 14 per cent, affecting flights to Japan and Thailand.

Domestic services will also be reduced in response to weaker demand due to the coronavirus outbreak.

Qantas estimates reduced travel due to coronavirus will slice between $100 million and $150 million from its earnings this year, although it said that would be softened by lower fuel prices.

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Trade Minister Simon Birmingham said today’s announcement was “disappointing but understandable”.

“I welcome the decision by Qantas to keep all of their routes across Asia and within their domestic network open, and that these temporary reductions in capacity will not result in any job losses,” he said.

“By keeping all of their routes across the network operational, it will be easier for Qantas to again increase the capacity and frequency of flights when conditions improve and traveller confidence picks up.”

Qantas announced the flight cuts as it reported a statutory half-year profit of $445 million for the six months to December, which was down 4 per cent on the same period last year.

Qantas Group chief executive Alan Joyce said the flight cuts were due to reduced travel due to coronavirus.

“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 today.

Qantas and Jetstar will slash flights to Asia in response to lower demand caused by the coronavirus outbreak.

Qantas and Jetstar flights between Australia and New Zealand will be cut by about 5 per cent and domestic services will be cut by 2.3 per cent for the second half of the financial year, due to “domestic demand weakness”.

Routes to the United States and the United Kingdom will not be affected.

“What’s important is that we have flexibility in how we respond to coronavirus and how we maintain our strategic position more broadly,” Mr Joyce said.

“We can extend how long the cuts are in place, we can deepen them or we can add seats back in if the demand is there. This is an evolving situation that we’re monitoring closely.

“We know demand into Asia will rebound. And we’ll be ready to ramp back up when it does.

“These past few months have been extraordinarily difficult for the tourism industry and we’ve tried to minimise the impact of our capacity reductions as much as possible.”

Earlier this month, Qantas announced it was suspending two direct services to mainland China — from Sydney to Beijing and Sydney to Shanghai — due to travel restrictions prompted by the emerging coronavirus crisis.

Mr Joyce said mainland China represented about 2 per cent of Qantas’ total international network.

He praised the crew who took part in repatriation flights to bring Australians home from the coronavirus-hit Diamond Princess docked off Japan and the virus epicentre of Wuhan in China.

“It took literally thousands of hours to plan complex operations like these,” Mr Joyce said.

“The crew were all volunteers and they did us proud.”

WHAT FLIGHTS ARE BEING CUT?

Qantas’ Sydney-Shanghai route, which is its only route to mainland China, will remain suspended “until the end of May and possibly longer,” Mr Joyce said.

There will be half the number of Sydney-Hong Kong flights each week. Brisbane-Hong Kong return flights will be reduced from seven per week to four.

Melbourne-Hong Kong flights will be cut from seven return flights per week to five and Melbourne-Singapore flights will now be serviced by smaller Boeing 787s instead of Airbus 380s.

Meanwhile, Jetstar will cut Cairns-Tokyo Narita, Cairns-Osaka, Gold Coast-Tokyo Narita and Melbourne and Sydney-Phuket return flights by two each week.

Each of the Jetstar airlines in Asia – Jetstar Asia (Singapore), Jetstar Japan and Jetstar Pacific (Vietnam) – have suspended flights to mainland China and are cutting flights across Asia.

Customers with existing bookings who are impacted by the reductions will be contacted directly and offered alternatives.