Coronavirus: Fares tipped to tumble as Qantas charts route to recovery

Qantas has flagged fares as low as $19 for Melbourne to Sydney, with Jetstar to stimulate demand when travel bans ease.

Qantas CFO Vanessa Hudson and Qantas CEO Alan Joyce in February. Picture: Adam Yip

Qantas has flagged fares as low as $19 for Melbourne to Sydney, with Jetstar to stimulate demand when travel bans ease.

Delivering a third-quarter trading update on Tuesday, CEO Alan Joyce said Qantas remained well placed to see out the coronavirus pandemic but warned it would be a much different airline in coming years to what it was in 2019. “Demand will be smaller for some time so we need to think about what the business needs to look like to succeed in the world — our fleet, our network and our structure. Like most companies, we will have to be different,” Mr Joyce said.

As a start, the airline’s Project Sunrise flights between Australia’s east coast and cities such as New York and London had been placed on hold indefinitely, along with new aircraft orders.

The non-stop services of 20 hours or longer were expected to start in early 2023, operated by new Airbus A350-1000s.

“We do think there is a huge potential for Project Sunrise but the time is not right now given the impact that COVID-19 has had on world travel,” said Mr Joyce.

“We’ll keep it under review on when is the appropriate time, when the market has recovered.”

The future of Qantas’s A380 fleet was also uncertain, with the airline halting refurbishment of the final six superjumbos still to be reconfigured to save money.

And five Boeing 747s that were to be retired at the end of 2020 ­appeared unlikely to fly again ­unless “demand came back”.

“We are looking at what the whole international fleet looks like dependent on when those international markets open,” he said.

Despite the uncertainty, Mr Joyce was adamant Qantas would help steer Australia to a recovery by reigniting the travel industry when it was possible to do so.

He said when restrictions were eased, Qantas and Jetstar would want to fill their aircraft and “get many people to travel as possible”.

“Airfares could be half of what they are today, and we’ve no doubt there’s a need for stimulation to start a lot of the market travelling again. For example on Melbourne-Sydney you could see Jetstar with $39 airfares, you could see $19 airfares and we will still cover our cash costs on those aircraft,” Mr Joyce said.

“There’s over 600,000 people employed in the tourism industry. They need people to start going to Cairns, going to the Gold Coast and to places where they have their businesses and we have an obligation as the national carrier of encouraging as many people as possible to get that part of the economy going again.”

In terms of competition, Mr Joyce said it was clear a competitor would emerge as a result of the Virgin Australia administration.

“We’ll be in a position where we have to adjust and adapt to it,” he said. “Qantas is up to that. There’s a reason why it’s the longest, continuous operating airline in the world. It has the DNA to adapt.”

Shortly after he made his comments, it was reported by Sky News that Virgin Australia’s codeshare partner, Virgin Atlantic, was cutting more than 3000 jobs — a third of its workforce — and would stop using Gatwick Airport as it battles to survive.