Coronavirus travel bans to delay Australia Post deliveries reliant on Qantas flights

Australia Post says Qantas’s decision to limit domestic routes will hit deliveries hard, delaying up to 100 tonnes of freight a day.

Australia Post Christine Holgate and Qantas counterpart Alan Joyce. Picture: Brent Winstone

Australia Post is warning delays of up to a week for the delivery of parcels, mail and urgent medical supplies as government-imposed travel bans force airlines to ground much of their passenger fleet.

After axing most of their international routes and securing a $715m rescue package from the federal government, Qantas, Virgin and other airlines are now shutting down most of their domestic business as they battle to survive the coronavirus pandemic.

Qantas’s decision to limit domestic routes will hit Australia Post hard, with the postal service relying on the national carrier to deliver its express post and same day time-sensitive parcels, such as essential medical suppliers.

The timely delivery of life saving medicine and personal protective equipment for health workers is critical now more than ever as Australia combats COVID-19, which has killed 61 Australians and infected more than 6300 others.

Australia Post boss Christine Holgate struck a seven-year air freight agreement worth $1bn with Qantas last August, which gave the postal service priority access to cargo space on Qantas passenger planes as well as eight dedicated air freighters to deliver such services.

While the dedicated freighters will continue to fly, the restrictions on passenger aircraft will result in more than 100 tonnes a day of Australia Post deliveries unable to travel by air.

Australians living in rural and regional communities would be the most disadvantaged, with Qantas’ decision blowing out delivery times in North Queensland by seven days. Meanwhile, deliveries to Perth and Brisbane will be delayed by five days and Tasmania will have a three-day lag.

“Australia Post regrets to inform customers that due to reductions in air freight capacity, there may be delays on the letters and parcels network that Australia Post operates around the country, particularly to regional and rural communities,” an Australia Post spokeswoman said.

Already, Australia Post has experienced a 60 per cent reduction in air freight availability since mid march and Qantas withdraws planes from service in the face of strict travel restrictions to limit the spread of COVID-19

Qantas, which was gradually privatised between 1993 and 1997, and Australia Post have historically been strong allies. In 2003, the pair bought Star Track Express in a 50:50 joint venture for $750m.

Qantas later sold its 50 per cent stake in the rebranded StarTrack to AusPost for $403m in 2012, as then AusPost managing director Ahmed Fahour was spending $2bn on upgrading the organisation’s parcel delivery network to counter the fast-eroding letters business.

It was a bet that paid off, with AusPost maintaining more than 80 per cent market share of the domestic parcel delivery market, while its international counterparts including the US Postal Service crumbled under private sector competition from UPS, FedEx and others, requiring government bailouts.

Mr Fahour strengthened Australia Post’s alliance with Qantas again in 2016 after the pair struck a freight agreement worth more than $500m over five years and involved six dedicated air freighter and Post having priority cargo access to Qantas’ passenger fleet.

Two more dedicated freighters have since been added, and last August, Ms Holgate and Qantas chief executive Alan Joyce extended that agreement for another seven years in a deal worth more than $1bn.