Qantas domestic operations ‘near full recovery’, says Alan Joyce

Qantas celebrates rebound in domestic services, but CEO fears Australia may be left behind if international borders stay shut too long.

A Qantas Boeing 737 at Cairns Airport. Picture: Brendan Radke.

Qantas boss Alan Joyce has warned Australia risks lagging behind the rest of the world and suffering further economic damage from the COVID crisis by keeping international borders closed.

In a candid interview in Sydney ahead of the trans-Tasman bubble opening on Monday, Mr Joyce also revealed paranoia about competition was what motivated Qantas to raise its game.

He said the “consistency of always being on edge, making sure you assume that the worst things can happen with competition” was how Qantas had survived for as long as it had.

As doubts mounted about Australia’s readiness to reopen borders by the end of October due to delays in the COVID vaccination rollout, Mr Joyce hinted that the government should also be concerned about falling behind.

“We think there’s a real danger to our economy, to our tourism, to our business traffic if we are allowed to lag behind the rest of the world because we will fall behind economically,” Mr Joyce said.

“All the good work that was done through suppressing COVID will disappear. I think the government is aware of that.”

Mr Joyce suggested he would expect government assistance to the airline to be extended beyond October 31 if borders remained closed.

In March, Prime Minister Scott Morrison announced a $1.2bn aviation assistance package, including funds to train and support workers who remained stood down in the absence of international flying.

“The logic would say you wouldn’t waste all the money you’ve spent keeping these people until October and you wouldn’t spend all the money on training them and activating aircraft so some sort of package will have to continue I think,” said Mr Joyce.

“But that’s really up to the government and we’re yet to have the dialogue with them.”

Alan Joyce is pushing for a reopening of international borders. Picture: Gary Ramage

It remained Mr Joyce’s intention to require international travellers to be vaccinated against COVID-19 before boarding an aircraft, for the safety of fellow passengers and crew.

Qantas chief customer officer Stephanie Tully said to date the airline had received “lots” of bookings for international flights from October 31, particularly over December and January.

“There’s a lot of Australians who are really hoping they can travel in that period, particularly to London and the US,” Ms Tully said.

In the meantime, thousands of people were expected to venture across the Tasman in coming weeks and months in response to Australia’s first travel bubble.

Qantas was preparing to reopen international lounges in Sydney, Melbourne and Brisbane for eligible travellers from Monday, with the airline and low fares partner Jetstar operating more than 120 flights a week to New Zealand.

Despite strong bookings out of Australia for the services, Mr Joyce said the response from Kiwis had been more sluggish.

“They’re a bit under the doona, they need to get out,” Mr Joyce joked.

“We think it will only take a few months to get there.”

In the meantime, domestic services were going from strength to strength, with Qantas expecting to be at 107 per cent of pre-COVID capacity by next year, and Jetstar at 120 per cent.

So strong was the demand for domestic travel that Jetstar would deploy up to five of its Boeing 787-8 aircraft, usually flown on international routes, in the domestic market from mid-year until international flights return.

Mr Joyce said he was confident in the position of Qantas and Jetstar at the premium and low cost end of the market, leaving Rex and Virgin Australia to battle it out in the middle of the market.

“We’re very happy with the competitive dynamic. It just happens that two of them have picked the same territory to fight on there, and that’s really up to them in terms of their business strategy,” he said.

“We can’t influence it, they obviously think it’s going to be very profitable.”

He remained of the opinion the Australian market could only support two major carriers, having seen off Compass 1 and Compass 2, Impulse, OzJet and Strategic Airlines.

“This has played out every time the exact same way and I’m not sure history will be different in the future but that’s a personal view,” Mr Joyce said.