Qantas extends flight cancellations, more pain for 20,000 staff

Marco Green
May 5, 2020

The airline's ambitious Project Sunrise was set to take wing in early 2023, but Qantas Group CEO Alan Joyce has confirmed to Executive Traveller that "we will be putting Project Sunrise on hold". This means Customers booked on Qantas and Jetstar flights disrupted by the Coronavirus crisis will be able to split travel credits across multiple future bookings.

Qantas has put plans for non-stop flights to London, Paris and NY on hold due to uncertainty over travel demand in the post-coronavirus world.

Governments worldwide have devoted more than $85 billion to propping up airlines as the virus wipes out travel demand and grounds fleets.

Domestic cancellations have been extended until the end of June, amid some speculation the country could be travelling interstate by July.

"There is huge potential for Project Sunrise but the time is not right now given the impact Covid-19 has had on world travel", Chief Executive Officer Alan Joyce said on a call with reporters Tuesday (May 5), referring to the plan to introduce direct services connecting Sydney with London and NY.

Speaking during the company's third quarter trading update, Joyce said Qantas is in a good position to ride out the crisis and that "life on the other side" could include massively discounted flight prices.

Qantas in March furloughed most of its 30,000-strong workforce and scrapped virtually all worldwide flights.

Still, new infections in Australia have slowed to a trickle and the government is due to discuss a potential global air corridor with New Zealand on Tuesday.

New Zealand Prime Minister Jacinda Ardern has labeled the proposal a "trans-Tasman travel bubble".

Qantas has announced it is extending its global flight cancellations through to the end of July, as the airline admits it is now burning cash at a rate of $40 million per week during the coronavirus shutdown.

This follows the $1.05 billion raised in March against seven 787-9s.

In a market update to the ASX, the airline, which is now operating at 5% of its pre-crisis domestic capacity and 1% of pre-crisis global capacity, said it would continue to stand down staff through to at least the end of June, supported by the JobKeeper payment.

Qantas shares were up 2.4% at A$3.65 at 2:09 Sydney, paring an earlier gain of 5.6%. The Brisbane-based carrier collapsed into voluntary administration last month under A$6.84 billion of debt and administrators are looking for new owners.

Cost cutting at Qantas should reduce its weekly net cash burn to A$40 million by the end of June, the airline said.

Qantas said that as at close of business May 4, 2020, total short-term liquidity stands at $3.5 billion, including a $1 billion undrawn facility.

The airline is now operating about 5.0 per cent of its pre-crisis domestic network and 1.0 per cent of its global network.

Other reports by Click Lancashire

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