Australian airlines slash domestic capacity as omicron torpedoes demand

Just as most Australian states open up their internal borders, soaring COVID-19 case numbers are disrupting the network recoveries achieved in recent months by the country's major airlines, proving once again how fragile such rebounds can be.

In Australia there have been record numbers of COVID-19 infections, thanks to the rapid spread of the Omicron variant of the virus. Virgin Australia was first to announce network capacity cuts in response to the latest coronavirus pandemic wave, with Qantas following soon after by scaling back its domestic and international capacity plans.

The two airlines had essentially reached pre-pandemic domestic capacity levels over the holiday period, but they will not be able to sustain this success in the first quarter of 2022 due to Omicron. It would not be a surprise if further cuts are also announced.

The main ray of hope is the possibility that the Omicron outbreak could be quicker to peak and subside than the previous Delta variant wave, allowing the airlines to resume their recovery trajectories.

The main question is when this will occur.