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Joyce sees 'huge pent-up demand' for travel, tips international flights by July 2021

Business

Qantas CEO Alan Joyce has called for a national strategy to trigger the closing and reopening of state borders, removing “different rules for different states” and provide greater certainty for the travel and tourism industry’s recovery.

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Joyce said Queensland Premier Annastacia Palaszczuk’s snap decision on Wednesday to add Sydney to the list of Queensland’s COVID-19 hotspots forced Qantas to cut a third of its August schedule.

From 1am Saturday, anybody who has been in Sydney, Liverpool, Fairfield, Campbelltown or the whole state of Victoria in the past 14 days is banned from entering Queensland.

Speaking at the first of a new Griffith University conversation series at HOTA on the Gold Coast, Joyce told interviewer Kerry O’Brien that the border uncertainty was hampering the airline’s capacity to capitalise on “huge pent-up demand for travel”. “The principle we all agree is that health has to be the top priority,” Joyce said.

“What we’d like to see, and I think what everybody in the tourism industry would like to see, is real certainty over what’s going to happen with borders.”

He said the strategy of suppression, not elimination of coronavirus, should allow triggers to be set for border shutdowns.
“What’s the criteria for closing the border down and what’s the criteria again for opening it up if we are going after suppression, which is the strategy,” he said.

Joyce told an audience of aviation and tourism heavyweights including Tourism Australia Chair Bob East, Flight Centre CEO Graham “Skroo” Turner, Gold Coast airport boss Chris Mills and Destination Gold Coast chairman Paul Donovan, that Qantas had an ambitious and aggressive three-year plan to turn the airline around and return it to pre-COVID status.

But the plan did need the “dramatic, drastic and very heart-breaking decisions,” including cutting 6000 jobs, standing down a further 15,000 employees, retiring the Boeing 747 jumbo jets, and parking the airline’s fleet of Airbus A380 super jumbos, the world’s largest passenger airliner, in the Mojave Desert for around three years.

He said Qantas trimmed a lot of fat from the business following the SARS crisis in 2013, but would have to shrink by 20 per cent to make it through the COVID turndown.

“We were on a trajectory all the way through of growing, people, aircraft, investment and network, and this knocked us for six,” Joyce said.

“This (20 per cent cutbacks) is less than nearly every other airline in the world is doing because we are in a stronger position. But this is what survival looks like.”

Having signed on for another three years in the job, Joyce said he was optimistic Qantas would be back flying internationally by July next year.

Before Victoria had the second wave, Qantas had 45 per cent of its domestic capacity back flying and had expectations domestic travel would be back to around 90 per cent by the end of the calendar year. He said before COVID-19, Qantas was also building up its presence on the Gold Coast.

Joyce said he anticipated Virgin would come out of administration and move back down market to a no-frills carrier closer to its Virgin Blue days, which meant more opportunity for Qantas in the Gold Coast and other Queensland leisure and corporate markets.

“We’re also finding in places like Hamilton Island, Maroochydore, we put Qantas back in and nearly overnight it’s been making money. So, the dynamic has changed and I think it will change even more so when Virgin comes out of administration.”

Private equity firm Bain Capital, which is in the process of a takeover of Virgin, is expected to reveal its business plan for the airline in the next week.

This article is supported by the Judith Neilson Institute for Journalism and Ideas

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