Qantas could drop the price of regional flights to just $19 as the airline tries desperately to recover from the coronavirus shutdown.
The airline is preparing for what the future of the company may look like after the travel industry was brought to a grinding halt when the COVID-19 pandemic escalated in March.
Qantas’ chief executive Alan Joyce said going forward, the airline would be very different than what it has previously been, with the possibility of a smaller fleet and network due to weaker demand for international travel.
He said the company was working on ways to ensure domestic travel is thriving as soon as travel restrictions within Australia are lifted.
He said they would look to stimulate demand with cheap airfares.
Prices for flights from Melbourne to Sydney on budget carrier Jetstar could fall to $39 or even $19, Mr Joyce said.
‘We’ll make sure we get as many people travelling as possible,’ he told the Sydney Morning Herald.
His comments come as the airline prepares to lose $40million a week until the travel industry recovers from the pandemic.
Qantas secured $550million in debt to help the business survive the pandemic if it lasts as long as the worst estimates.
Qantas (pictured: grounded plants in Sydney) has secured A$550 million in debt to help the business survive the pandemic
Since the pandemic escalated, Qantas has been operating at 5 per cent for its domestic capacity and daftar casino 5 per cent of its international capacity (pictured: Returning travellers in Adelaide)
The money has been secured against three of its Boeing 787-9 aircraft. The airline said it could raise another $2.7billion from other aircraft assets if needed.
The funding comes on top of the $1billion it raised in March, giving the company enough liquidity to stay afloat until December 2021.
In an announcement to the ASX, the airline said it has ‘sufficient liquidity to respond to a range of recovery scenarios, including one where the current trading conditions persist until at least December 2021’.
Since the pandemic escalated, Qantas has been operating at five per cent of its domestic capacity and five per cent of its international capacity.
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Mr Joyce said they were optimistic domestic travel will start returning earlier than first thought.
However, he said international travel, with the possible exception of New Zealand, could take years to return to normal.
‘We don’t know how long domestic and international travel restrictions will last or what demand will look like as they’re gradually lifted,’ he said.
About 25,000 of the company’s 30,000 staff will remain stood-down until at least until the end of June.
Rival Virgin Australia went into voluntary administration two weeks ago, owing almost $7billion.
Qantas’ chief executive Alan Joyce said the company was working on ways to ensure domestic travel is thriving as soon as travel restrictions within Australia are lifted
Qantas chief executive Alan Joyce said they were optimistic domestic travel will start returning earlier than first though
Coronavirus Australia: Qantas takes on $550m more debt, extends COVID-19 cancellations