Qantas CEO calls for international borders reopening this year

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Alan Joyce celebrates the launch of the Beijing route
Alan Joyce celebrates the launch of the Beijing route

Qantas boss Alan Joyce says Australia’s vaccine rollout feels like it’s moving slower than it should and higher rates of take-up may allow borders to open by the end of the year.

Mr Joyce called for extra effort to encourage COVID-19 jabs while discussing Thursday’s news of voluntary redundancy for Qantas international cabin crew and a two-year wage freeze for employees.

The airline boss said authorities had done a great job keeping Australians safe during the pandemic, “imagine if we put the same focus on the vaccine rollout,” Mr Joyce told a media conference, “opening by the end of the year seems very achievable under those circumstances.”

The Morrison government has been reluctant to give a timeframe for vaccinations, whilst budget papers use a mid-2022 re-opening timeframe, but there are no guarantees.

Some business leaders and those with loved ones overseas say vaccine delivery should be hastened to open the borders earlier.

Mr Joyce had a similar view.

“We need to make sure we encourage as many people as possible to take the vaccine and make sure we don’t get to a stage of dosage wastage,” he said.

The rollout “feels like it’s slower than it should be”, he said.

“There is a lot more work to do on vaccinations to complete the program by the end of the year.”

More than 3.2 million Australians have now received a COVID-19 vaccination, with the daily pace of the rollout increasing as the program expands.

Meanwhile, Mr Joyce declined to say how much money the group would save from its pay freeze.

Qantas has forecast a statutory loss of more than $2 million before tax this financial year as international travel remains scarce due to the coronavirus.

“When a company loses $4.7 billion over two years, I don’t think anybody should be thinking management or employees should be getting a pay increase,” Mr Joyce said.

The redundancy offer is for long-haul international cabin crew and does not apply to pilots, the group has also reduced travel agents commission for overseas bookings. The commission will drop from five per cent to one per cent and take effect mid-next year.

Mr Joyce said this sort of reduction had happened in other parts of the world. Encouragingly for the airline, Australians are flying domestically at near pre-COVID levels. Customers flying Qantas’ trans-Tasman routes were at 60 per cent of pre-COVID levels.

Australians and New Zealanders have been able to travel between the two nations without quarantine for about four weeks.

Australians have been keen to travel to New Zealand. Many have gone skiing to Queenstown while popular skiing destinations in Japan remain off-limits.

Mr Joyce said Kiwis were reluctant to visit Australia. New Zealand has had some of the most strict COVID-19 lockdowns in the world.

Domestic travel has helped Qantas forecast underlying earnings of between $400 million and $450 million this financial year.

Mr Joyce said Qantas had started to repay some of the debt it took on to help the company get through the pandemic.

“We have a long way still to go in this recovery but it does feel like we’re slowly starting to turn the corner,” he said.

“We’ve adjusted our expectations for when international borders will start opening based on the government’s new timeline.

“But our fundamental assumption remains the same – that once the national vaccine rollout is effectively complete, Australia can and should open up.”

The airline forecast a total revenue loss of $16 billion by the end of fiscal 2021.

Despite this, Moody’s Investors Service vice president Ian Chitterer was impressed by efforts to repay debt.

He said he expected Qantas to emerge from the pandemic with a bigger share of the domestic market.

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