- Omicron has caused turbulence for Qantas (QAN) as the group cuts around a third of domestic and international flights for the third quarter of FY22
- The group will cut domestic travel to around 70 per cent of pre-COVID levels
- International travel will also fall from 30 per cent to 20 per cent of pre-COVID levels due to increased travel restrictions in certain countries
- CEO Alan Joyce says the rapidly rising cases of COVID-19 are having an “obvious impact on consumer behaviour across various sectors”
- Qantas was down 2.35 per cent at market close on Thursday, trading at $4.99 per share
Qantas (QAN) will cut around a third of domestic and international flights scheduled in the March quarter due to the new Omicron variant of COVID-19.
The group will cut domestic travel to around 70 per cent of pre-COVID levels, which is down compared with the 102 per cent level that had been planned.
International travel, over the same period, will fall from 30 per cent to 20 per cent of pre-COVID levels. This reduction is due to increased travel restrictions in countries like Japan, Thailand and Indonesia and is mostly impacting the leisure routes of its low cost airline, Jetstar.
CEO Alan Joyce said the rapidly rising cases of COVID-19 have had an “obvious impact on consumer behaviour across various sectors.”
“Thankfully, Australia has one of the world’s highest vaccination rates and the Omicron variant is milder than its predecessors. So, as challenging as this current phase is, we’re optimistic that it is likely to fast track a return to normal,” he said.
“People are already looking beyond what’s happening now with early bookings for the Easter holidays in April looking promising for both domestic and international.
“We have the flexibility to add capacity back if demand improves earlier than expected, but 70 per cent still represents a lot of domestic flying and its a quantum improvement on the levels we faced only a few months ago,” he concluded.
An assessment on the financial impact of the changes will be given in the group’s half-year results in late February.
By that time a clearer picture will have emerged on factors such as demand levels, loosening or tightening travel restrictions overseas, and the reopening of Western Australia.
No material adjustments have been made to capacity expectations for the fourth quarter of FY22.
At market close for the day, Qantas was down 2.35 per cent and to trade at $4.99 per share.