The Qantas Group says it is seeing “A strong, sustained recovery in travel demand” as Australia transitions to living with the virus and more of us travel with less trepidation.
In a market update published today for the last trading quarter from January to March 2022, Qantas said the return of domestic travel demand ahead of expectations, solid international performance, and strong contributions from Qantas Loyalty and Freight drove significant levels of positive free cash flow.
While the Group said it still expects to post a significant full-year loss for this financial year that includes the worst of the Delta and Omicron impacts as well as one-off restart costs, the business is on track for the second half of 2022 to deliver between $450 million to $550 million based on current expectations.
What are the domestic booking trends Qantas and Jetstar are reporting?
All categories of domestic travel are performing well. Leisure demand is very strong, with Qantas and Jetstar operating at approximately 110 per cent of pre-pandemic capacity over the Easter school holidays.
The rebound in travel for business has been above expectations, with small businesses now above pre-pandemic levels and corporate travel at 85 per cent.
With the reopening of Western Australia in early March and the return of east-west flying, the Group says its overall domestic market share has increased and is expected to be 70 per cent between the two main competitors.
Qantas Group CEO Alan Joyce said: “After a few false starts, we’re finally seeing a sustained recovery in travel demand.
“People have confidence in domestic borders now that we’ve shifted to living with COVID and that’s bringing us back towards pre-pandemic levels of flying.
“The Easter peak shows how strongly the leisure segment is performing, notwithstanding the temporary resourcing constraints we faced in some areas.
“The recovery in business traffic has been faster than we expected. Once mask mandates were removed and people went back to the office, there was a clear uptick in demand.
“We’re now at around 85 per cent of pre-COVID levels for domestic corporate travel and more than 100 per cent for small businesses,” he said.
What about internationally?
The group says demand for international travel has also continued to recover, particularly as more restrictions ease.
The removal of Australia’s pre-flight testing requirement and the early opening of New Zealand’s borders provided tailwinds during April.
Meanwhile, bookings for markets including London, Los Angeles, South Africa and Bali are all remarkably above pre-pandemic levels and Jetstar has restarted more than 60 per cent of its international routes as more leisure destinations in Asia have re-opened.
“As expected, international flying is slower to recover because several markets remain closed or heavily restricted. But key routes like London, Los Angeles and Johannesburg are performing above pre-COVID levels and early signs on our newest direct routes to India, Europe and Korea are very positive,” said Mr Joyce.
Qantas has today also announced details of its new fleet including ordering 12 Airbus A350-1000s to operate Project Sunrise – the long-held plan for non-stop flights from Australia to destinations including London and New York from 2025, starting in Sydney.
“The major fleet decisions we’ve announced today are a huge vote of confidence in the future of the national carrier, and will deliver for our people, customers and shareholders,” said Mr Joyce.
For more, head to www.qantasnewsroom.com.au
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