Qantas' international plans to emerge from the “Hermit Kingdom”

Summary

• Qantas is upbeat as it plans to return to international flying, as soon as Australia's vaccination rates hit 80%, expected to be in Dec-2021
• First routes to reopen will be destinations where vaccination rates are high, notably the major markets of the US and UK
• Five of its A380s are planned to return ahead of original plans, in mid-2022

Qantas prioritises vaccinated destinations as Australia prepares to reopen to the world

Australia's COVID suppression strategy has made the country an outlier in global responses to the pandemic, along with neighbouring New Zealand. It has allowed both countries to open up internally, allowing freedoms other countries have enjoyed for much of the past 18 months, and without exceeding 1,000 deaths in total (even today, the US is experiencing that level on a daily basis). But the government policy has been very controversial in restricting international movements, notably in allowing Australian nationals to return, even with very cautious quarantine requirements.

That all changed when the Delta variant came along in Jun-2021.

Australia is now belatedly - but very rapidly - getting on with a long overdue vaccination programme.

As other countries with higher risk tolerance open up, Australia is commonly being described as a hermit kingdom, shut off from the world.

While, most - but not all - resident Australians would consider the cost of that worthwhile, given the substantially open society it has enjoyed while the rest of the world was suffering much more tragically, there is now a recognition that things will have to change. Airlines and the travel industry more widely need to have some basis for planning their future, after the torrid times they have suffered.

As an operating process, the states and federal government in 2020 established a groundbreaking National Cabinet, comprising the premiers of the states and the Prime Minister. The National Cabinet last week laid out its strategy for reopening, based on achieving a vaccination threshold of 80% in Dec-2021. Described as "Phase C" of the COVID response strategy, this will permit gradual reopening of international borders. (See footnote)

Qantas' plans revolve around achievement of this condition, as well as linking with destinations where similar levels of vaccination and travel conditions apply. Clearly there are many details to be ironed out, not the least being the still-individual national travel requirements, such as testing and forms of quarantining.

Priority routes include the UK and US

Priority destinations (the "initial focus"), will include Singapore, the United States, Japan, United Kingdom and Canada. New Zealand is also targeted for mid-Dec-2021; a "bubble" temporarily existed earlier this year until outbreaks in Australia disrupted that.

Destinations "with low vaccine rates and high levels of infection" will be delayed until Apr-2022. These include Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg.

The "Sunrise" flights might have to change

The airline's very successful non-stop 787 services between Perth and London are "expected to be in even higher demand post-COVID".

But they may require some modification initially, as Western Australia (which has no cases at present) may be unlikely to permit non-quarantine operations, despite the National Cabinet agreement.

Instead, Qantas is "investigating using Darwin as a transit point". This has been the airline's main entry for repatriation flights, as an alternative. "Discussions on this option are continuing."

A380s to return ahead of schedule

Qantas grounded its A380 fleet early on in the pandemic. To cater for anticipated demand for Sydney-Los Angeles and Sydney-London (Via Singapore), five of Qantas' 12 A380s "may return" to service from Jul-2022. The A380s "work well on these long-haul routes when there's sufficient demand" and where vaccination rates are comparable.

Qantas is currently upgrading the interiors of 10 A380s with expectations to have them all back in service "by early 2024", depending on how fast the market recovers. Two of its oldest A380s will be retired.

Source: CAPA Fleet Database

Jetstar also readying to return to international flying

Qantas Group's low cost subsidiary, Jetstar, operates both domestically and internationally. The LCC has 73 orders on its books for A320neos and A321neoLRs. It plans to take delivery of its first three Airbus A321neoLRs aircraft from early in 2H2022, allowing it to swap some of its 787s for use in other markets.

Source: CAPA Fleet Database

Airlines need to plan ahead

As Qantas CEO Alan Joyce said with the announcement. "It's obviously up to government exactly how and when our international borders re-open, but with Australia on track to meet the 80 per cent trigger agreed by National Cabinet by the end of the year, we need to plan ahead for what is a complex restart process.

"There's a lot of work that needs to happen, including training for our people and carefully bringing aircraft back into service. We're also working to integrate the IATA travel pass into our systems to help our customers prove their vaccine status and cross borders."

Qantas has previously announced a requirement for full vaccination before travel.

AUSTRALIA'S NATIONAL CABINET 'PHASE C' REOPENING PLAN
- Triggered when vaccine rate among eligible Australians reaches 80 per cent
- Highly targeted domestic lockdowns only
- No caps on returning vaccinated Australians
- Lift all restrictions on outbound travel for vaccinated Australians
- Extend travel bubble for unrestricted travel to new candidate countries
- Gradual reopening of inward and outward international travel with safe countries and proportionate quarantine and reduced requirements for fully vaccinated inbound travellers