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Airlines Scale Back Operations In Australia, New Zealand

Airlines serving Australia and New Zealand are implementing drastic service cuts as a result of a steep fall in passenger demand and government announcements last weekend that all travelers entering the countries must self-quarantine for two weeks.

Benzinga · 03/17/2020 22:17

Airlines serving Australia and New Zealand are implementing drastic service cuts as a result of a steep fall in passenger demand and government announcements last weekend that all travelers entering the countries must self-quarantine for two weeks.

Qantas and subsidiary Jetstar together will cut about 90% of international passenger capacity from the end of March through the end of May, up from the 23% capacity reduction announced a week earlier due to concerns over the coronavirus. On the domestic side, the airline group is cutting 60% of flights compared to the 5% reduction previously announced. 

About 150 aircraft, including almost all of the group's widebody fleet, will be grounded.

Previously announced cuts in place from late May through mid-September remain in place and are likely to be increased, the company warned Tuesday.

Qantas said its fleet of freighters continues to be fully utilized and that it will shift some domestic passenger aircraft to freight-only flights to replace lost capacity from regularly scheduled services. 

Qantas is addressing its surplus labor situation through the use of paid and unpaid leave. Cost cuts include significant pay cuts for top executives and board members, as well as no pay for the chief executive and chairman for three months. Annual bonuses and stock buybacks are canceled.

Air New Zealand said it is reducing its long-haul network by 85% over the coming months. It will operate a minimal schedule to allow New Zealanders to return home and to keep trade corridors with Asia and North America open. 

The airline is suspending flights between Auckland and Chicago, Honolulu, Houston and San Francisco in the U.S.; Buenos Aires, Vancouver, Tokyo Narita, Denpasar, and Taipei from March 30 to June 30. It is also suspending its London-Los Angeles service beginning March 20 through June 30.

Air New Zealand's domestic network will be reduced by about 30% in April and May, but no routes will be suspended, the airline said. 

It warned that it will need to reduce headcount in partnership with the four main unions representing its 8,000-person workforce.

"We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people. We have deployed a range of measures, such as leave without pay and asking those with excess leave to take it, but these only go so far," Chief Executive Greg Foran said in a statement."These are unprecedented times that we are all having to navigate. And it is clear that if we don't take all the appropriate measures to lower costs and to drive revenue, our airline won't be in the best position to accelerate forward once we are through the worst of the impact of COVID-19."

Meanwhile, Hawaiian Airlines announced Tuesday it will temporarily suspend nonstop service between Honolulu and its Australia and New Zealand gateways starting later this month. 

Hawaiian, which currently flies five times per week between Honolulu's Daniel K. Inouye International Airport (HNL) and Sydney Airport (SYD), will suspend service through April 30. The carrier will pause three-times-weekly Brisbane service through May 31 beginning March 23.

In New Zealand, which Hawaiian also serves with three-times-weekly flights, service will stop through May 31 after the last flight from Auckland on March 22. 

The flight suspensions eliminate service for cargo, as well as passengers.

Image Sourced from Pixabay