Qantas CEO Discusses Project Sunrise, Pandemic Plans

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Qantas Alan Joyce
Image via Qantas

Qantas CEO Alan Joyce is confident that the airline is in a good position to survive the pandemic. He also believes demand will soar for the airline’s Project Sunrise ultra-long-haul flights when they launch at an as-of-yet undetermined date. Since the flights will be non-stop, there will be fewer touchpoints, and this has value during and after a pandemic.

Qantas believes that the business case for its Project Sunrise ultra-long-haul flights linking Australia’s east coast with New York, London and Paris will be even stronger in a post-COVID world. Chief executive officer Alan Joyce told delegates at the recent virtual CAPA Australia Pacific Aviation Summit that such ultra-long-haul flights without stopovers will prove popular with passengers as they start flying and aim to decrease the risk of contracting an infection.

Joyce believes the airline will get “an even better” aircraft deal than the one it was on the verge of signing with Airbus for ultra-long-range A350-1000s as the pandemic hit. Any move on Project Sunrise is unlikely for the next few years, however, with Joyce predicting the recovery of the aviation industry to continue through to 2023-24.

When Qantas does resume international flights, which is not expected until June/July 2021, the network will be much smaller than previously for some time. Joyce predicts travel bubbles between Australia and New Zealand, Japan and other Asian destinations will allow international services to restart. The Boeing 787 Dreamliner will be the right aircraft coming out of COVID, Joyce said, allowing Qantas to operate routes without stopovers, such as Perth to London and Paris.

Qantas is well-prepared to cope until the industry recovers, with A$4.5 billion (US$3.3 billion) in cash – “a very long runway to get through it.” – Alan Joyce, Qantas CEO

The airline’s Airbus A380 fleet, currently parked in California’s Mojave Desert for long-term storage, is unlikely to return to service until 2023/24 and only if those aircraft can generate cash, he said.

Joyce also believes that the crisis provides the industry with “a great opportunity to start from scratch” in terms of the environment. The airline’s ageing Boeing 747-400s have already been retired and Qantas could restart operations eliminating onboard single-use plastics, he suggested

There are reasons to be optimistic, Joyce explained, pointing to developments in a COVID-19 vaccine, as well as testing and tracing. Progress in super-fast testing, for example, could change the outlook for the airline, he added. He stressed, however, that scientific information needs to be used to allow the reopening of Australia’s borders and get the economy working again, pointing to the current situation where a number of Australian states have few to no COVID cases, but their borders remain closed.

In the meantime, Qantas is well-prepared to cope until the industry recovers, with A$4.5 billion (US$3.3 billion) in cash – “a very long runway to get through it,” according to Joyce. Qantas has taken “dramatic action,” including fleet cuts and job losses of at least 6,000, with a further 2,500 jobs on the line if Qantas goes ahead with outsourcing ground handling operations.

The airline entered the crisis following significant restructuring and cost cutting, having been “disciplined over a number of years with good profits.” It has A$4.7 billion of assets with no loans against it and just last week boosted liquidity further with a 10-year, A$500 million unsecured bond issue. Prior to COVID, Qantas was on track for a profit above A$1 billion, but instead the group suffered a A$2.7 billion statutory loss in financial year 2020.

Joyce said he is “very confident” that Qantas can come through the crisis, believing that you make your own luck and by placing Qantas in the best financial position, it is well positioned to do so.

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