Melbourne lockdown sets aviation back months

Victoria’s latest lockdown has delivered a major setback to the aviation industry’s Covid recovery, with more than 1000 flights cancelled in a week.

Victoria’s two-week lockdown will have significant repercussions for Melbourne Airport, which has seen close to 1000 flights cancelled in the last week. Picture: James Gourley/AAP

The recovery of the aviation industry has been set back months by Victoria’s latest lockdown, with more than 1000 flights scrapped and airlines again counting their losses.

As recently as last month, Qantas, Jetstar, Virgin Australia and Rex had dared to hope such crippling lockdowns were behind them, with the vaccination rollout gathering pace and the trans-­Tasman bubble opening up.

The Melbourne-Sydney route had just returned to the top five busiest city pairs in the world, and a string of new routes had begun operating out of the Victorian capital.

Qantas Group chief executive Alan Joyce announced his airlines would exceed 100 per cent pre-Covid capacity in July and Virgin chief executive Jayne Hrdlicka was hopeful of reaching 80 per cent this month.

But the two-week lockdown has cast a tall shadow over those forecasts, after hundreds of flight cancellations delivered another blow to the already fragile confidence in air travel.

Melbourne Airport confirmed that 872 services did not go ahead between Monday and Thursday, on top of more than 150 cancellations over the first weekend of the lockdown.

Although Mr Joyce told Qantas employees this week it was too early to say what the fallout would be from the lockdown, Victoria is considered critical to the airline’s success, with the state representing 22 per cent of the domestic market.

Similar disruptions have cost Qantas dearly, as revealed in a recent market update. Sydney’s Northern Beaches outbreak in December amounted to a $400 million hole in Qantas’s earnings before interest and tax, and Brisbane’s three-day lockdown before Easter cost $29 million.

As the newest competitor in the capital city market, Rex had the most to lose, and a spokesman confirmed that the extended lockdown was having a negative impact on passenger numbers across the network.

“As a consequence we have reduced capacity on routes from Melbourne to Sydney, Adelaide and the Gold Coast,” he said.

He said Rex’s regional network had also been affected by the lockdown in Melbourne, while the new Melbourne-Canberra service due to start on June 10 was likely to be postponed.

Virgin Australia had been similarly affected, reporting reduced travel demand and the cancellation of about half the airline’s services out of Melbourne.

For Melbourne Airport, the lockdown came just as the gateway was seeing strong growth in passenger numbers after a dismal 2020. In April, the airport recorded its biggest number of domestic passengers in a year, with 1.4 million people passing through.

International travellers more than doubled, jumping from 10,787 in March to 27,904, thanks to the trans-Tasman bubble.

Quarantine-free flights from New Zealand have now been suspended and it is unclear when they will resume.

Airport chief executive Lyell Strambi said the recovery of the aviation industry remained fragile, and called for a more aggressive approach to the vaccination rollout. “It is increasingly likely that Australia will be left behind as countries around the world reopen to one another on the back of high vaccination rates,” Mr Strambi said.

“In the short term, our splendid isolation is ultra-safe from Covid, but in the long term it will act as a handbrake on the economy, jobs and opportunities for Australians.”

With school holidays due to begin in Victoria in a few weeks, it was expected airlines and airports would be holding their collective breath to see if the lockdown ended and confidence returned.