Qantas reaches break-even, breaks out of the pandemic, and CEO

The airline’s CEO is able to reach a break-even point and get out of the pandemic ahead of his rivals due to the clever handling of Australia’s Covid-19 and the tough phone calls from Qantas management. It says it was done.

Alan Joyce told the Financial Times that he expects seats to return to half of pre-virus levels by Christmas as the border reopens its borders with the country on the verge of eliminating local virus transmission. ..

This should allow Australians to reach the break-even point, begin rebuilding their balance sheets and look for opportunities to follow the worst crisis in aviation history, he said.

“We are very optimistic. Opening the border will result in a surge in demand,” said Joyce, who will launch the Qantas 100th Anniversary Ceremony in Sydney on Monday.

Joyce said passenger numbers on airlines in Europe, the United States and the Middle East were declining due to the Covid-19 surge, while domestic rival Virgin Australia was still recovering from power. The reopening of Australia, which accounts for two-thirds of Qantas’ profits, will allow airlines to capture 70% of the domestic market, up 10 percentage points from pre-Covid-19 levels, he said.

“We think it can be well over 50% [seat capacity] Set goals by the time you reach Christmas. This is one of the major amounts of capacity being added anywhere in the world at this time, “Joyce added.

Qantas has been hit hard by the virus, and Australia has closed its borders to non-residents and restricted interstate travel. In May, airlines burned A $ 40 million ($ 29 million) a week, revealing that most international routes will remain closed until mid-2021.

Until last month, 70% of domestic travel was banned or subject to hotel quarantine, according to UBS. In other words, the capacity was only 25% of the pre-Covid level. This is the lowest level in developed countries.

This limit has led carriers to implement cost savings of A $ 1 billion. Raised A $ 3.5 billion from shareholders and fixed income markets. Reduced 8,000 jobs. Trade unions have accused Joyce of using Covid-19 as an excuse to downgrade working conditions.

Joyce said management must take decisive action during the crisis. Otherwise, Qantas could be among the 40 percent of airlines that some analysts warned could go bankrupt.

“Qantas has survived for 100 years to adapt to evolution, change models as needed, and take the necessary steps,” says Joyce.

He said low prices would bring passengers back on air travel, downplaying concerns that the virus could stop people from flying. A study by the International Air Transport Association found only 44 cases of in-flight transmission of the virus among 1.2 billion travelers, he said.

“The risk is one in 27 million,” said Joyce, who opposes the implementation of social distance in flight, a move that reduces profitability, and pre-flight testing in Australia is necessary due to the small number of cases. It states that it is not.

In the post-covid world, Qantas restarts its delayed “project sunrise” strategy of launching direct flights from Sydney to New York and London as more international passengers adopt direct ultra-long haul routes. I added that I can do it.

Qantas reaches break-even, breaks out of the pandemic, and CEO

Source link Qantas reaches break-even, breaks out of the pandemic, and CEO

Back to top button