Qantas more concerned about Coronavirus than Virgin Australia

Qantas says COVID-19 will be their biggest competitor in coming years, not a revamped Virgin Australia.

Face masks look set to become a standard feature of air travel. Picture: AAP

Qantas CEO Alan Joyce has suggested the airline’s biggest competition will come from COVID-19 rather than a revamped Virgin Australia in the years ahead.

Unveiling a new “fly well” strategy to restore confidence in domestic air travel, Mr Joyce said he had been watching the Virgin Australia administration closely.

After amassing debts of almost $7bn, the smaller airline appointed administrators Deloitte last month to restructure and recapitalise the carrier.

On Monday, Deloitte announced a shortlist of four groups in the running to buy Virgin Australia. They are private equity firms Bain and BGH Capital, Arizona-based airline investor ­Indigo Partners and New York-based hedge fund Cyrus Capital.

Mr Joyce said that looking at the bidders, Virgin Australia could emerge from administration in a variety of ways, “from full service to low cost”.

“Whatever happens I think competition has always made Qantas a better airline and Qantas will adapt and will be able to compete with whatever is out there,” he said. “Our focus is on COVID-19 being our major competitor and that will be there for a number of years.”

Mr Joyce announced a range of measures from June 12 to ensure the safety of travellers, from hand-sanitiser dispensers throughout airports to optional face masks and antibacterial wipes on board.

Social distancing would be practised in lounges when they reopen but Qantas would not block out seats on aircraft to ensure more space between travellers.

“Social distancing on an aircraft isn’t practical,” Mr Joyce said.

“The International Air Transport Association has come out and said if we take the middle seat out, airfares will probably go up by around 50 per cent.”

He said it was imperative to Australia’s tourism industry and economic recovery that airfares were kept as low as possible to ­encourage people to travel.

“We’ve done such a great job of managing COVID-19, now is the time to get parts of the economy working again,” Mr Joyce said.

“I’m glad to see the premiers talking about July being a period when this could happen and we’re getting ready for that.”

His call for a return to domestic travel was backed by Canberra Airport CEO Stephen Byron, who said a clear plan was needed to ­deliver certainty to the aviation ­industry. “Bookings for air travel have a lead time of at least two to three weeks. It’s time to develop a clear plan and a timetable which sees a phased and incremental ­approach to the return of air ­travel,” Mr Byron said.

“Aviation is crucial to the Australian economy and the restart of businesses and return to employment of thousands of Australians.”

Gold Coast Airport CEO Chris Mills also called for clarity on state border reopenings, after recording fewer than 2000 passengers for April. “We’re not saying the border should be opened tomorrow. We all understand health considerations are the first priority and the government has done well to manage this,” Mr Mills said. “But we need a clear date so airlines can sell seats, travellers can make bookings, and tourism businesses can get the income they need.”