About This Source - Bloomberg QuickTake: Now
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Bloomberg Quicktake: Now published this video item, entitled “Australia’s Qantas Airlines to Emerge From Covid-19 Stronger Than Ever” – below is their description.
While losses at airlines globally from Covid-19 are set to surpass $174 billion by the end of 2021 — wiping out half a decade of profits — Qantas has become one of the most financially secure carriers anywhere in the world. Its stock has surged 120% from a March 2020 low — almost double the return of the Bloomberg World Airlines Index — and its market value has swollen to A$8.9 billion ($6.7 billion). Qantas says net debt has peaked and it’s on track to deliver an underlying profit for the year ending this month.
The 100-year-old carrier’s market position, Joyce declared on May 20, “is stronger than it has ever been.”
Qantas’ muscular recovery from a crisis that was terminal for many of its peers is a tale of commercial opportunism and political guile. Australia’s improbable feat of almost eliminating Covid-19, not to mention subsidies for fliers, created a haven for air travel that Joyce has exploited to its fullest.
Chief Executive Officer Alan Joyce’s springboard was Australia’s closure of its international borders in March last year. The government didn’t just stop visitors coming in — it also barred citizens from leaving. So within months, travel-loving Australians who’d normally jet off to Aspen or the Mediterranean started emptying their wallets at home in a domestic holiday bonanza.
Qantas, by far Australia’s largest airline, was inevitably one of the biggest beneficiaries. The boost was turbo-charged this year when the government started subsidizing 800,000 half-priced airfares to support tourism. Air travel in Australia has become so popular that Joyce said in May demand was about to surpass even pre-Covid levels.
“I don’t see any way Qantas won’t come out of this very strongly,” Ian Chitterer, a vice president at Moody’s Investors Service in Sydney, said in an interview. “You can’t imagine the opportunities would have presented themselves to the same degree were it not for the pandemic.”
Joyce, 54, hasn’t held back. A former flight scheduler himself, he’s been busy orchestrating Qantas’s biggest network expansion in a decade, adding 45 routes during the pandemic.
Sydney-Ballina is one of them. Ballina is a short drive from Byron Bay, the coastal town in New South Wales famous for attracting Hollywood A-listers like Chris Hemsworth and Matt Damon. Before Covid, Qantas hadn’t flown there from Sydney for 15 years. These days, the airline and its low-cost division Jetstar operate as many as 55 flights in and out each week to meet surging demand from Australians who can’t leave the country.
A Tuesday evening flight from Sydney to Ballina this month shows how Australia’s near-elimination of Covid is working in Qantas’s favor. The 74-seat plane was more than 80% full for the 80-minute flight. That’s a benchmark for an airline at any time, let alone mid-week, out of season in chilly June, during a pandemic.Bloomberg Quicktake: Now YouTube Channel
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