The Federal Tourism Minister says short-term international visitors will probably not be allowed into Australia until at least next year.
That has prompted Qantas to cancel all its international flights up to late-October, with the potential exception of flights to and from New Zealand that may be facilitated if a travel “bubble” between the two countries is put in place.
“With Australia’s borders set to remain closed for some time, we have cancelled most international flights until late October,” a Qantas spokesperson told AAP in a statement.
“We still have some flights scheduled across the Tasman in the coming months, with the expected travel bubble between Australia and New Zealand.
“Should travel between Australia and other countries open up and demand return, we can add more flights back into our schedule.”
11 airlines down, $130b to prop-up others
For airlines, that’s probably the least of their worries. Thanks to COVID-19, survival is now the name of the game.
Already 11 airlines, including Virgin Australia, have collapsed and many others are on the brink.
Governments around the world have poured in about $130 billion to keep some of the biggest names in aviation alive as the industry heads for its worst year on record with total losses of around $120 billion.
“Some of the most vulnerable carriers are from South-East Asia,” said Peter Harbison from airline consultancy CAPA.
“Ones that have been struggling for years — Garuda, Malaysian, Thai, which is already in bankruptcy effectively.”
And it’s not just those three who are symptomatic of an industry that’s ill-prepared for shocks like that delivered by COVID-19.
“The whole industry is established on low fares and high traffic and very low yields,” Hong Kong-based aviation analyst Joanna Lu told the ABC.
“The whole industry was not very profitable before the pandemic,” she added.
Qantas and Virgin (when it re-emerges), with their big domestic networks, will be somewhat protected in an environment where seeing Australia will be the only option for travel.
“Any airline that doesn’t have a domestic network is going to be struggling because they have to reconstitute their global network, and that’s going to be hard,” said CAPA’s Peter Harbison.
Which means the flightpath ahead for industry giants like Emirates and Singapore, plus others like Etihad and Cathay Pacific, who only fly internationally, is going to be extremely turbulent.
Passengers ‘fear’ to fly
But even when international airlines get the green light to fly, their problems will be far from over.
At the top of the agenda is persuading people to come back.
“You basically have a fear now to travel,” Ms Lu said.
“It’s nothing to do with the airline industry itself. It’s just that people don’t dare to go out to travel.”
No passengers means no revenue for an industry that’s chewing through hundreds of millions of dollars a day while its planes are on the ground.
Joanna Lu believes the only way to restore confidence among the travelling public is the development of a COVID-19 vaccine.
But that could be years away and, even if it’s not, there’s another major roadblock to recovery.
“We’re going into a deep recession globally and having enough people to spend enough discretionary money, and corporates to spend business money [on flights], is going to be very, very difficult,” Mr Harbison said.
Only one out of 10 Australians say they would feel very comfortable getting into an aeroplane.
