Qantas may get more aid, eyes short-haul fleet renewal

Josh Frydenberg, Australia’s federal treasurer, is considering further measures to support coronavirus-hit companies such as Qantas (QF, Sydney Kingsford Smith) when the government’s JobKeeper wage subsidy expires on March 28. “We are looking at other measures that we can put in place post-JobKeeper to support a range of industries including the aviation sector,” he told Sky News on February 28. So far, the flag carrier has received AUD459 million Australian dollars (USD355.8 million) under the JobKeeper scheme, which pays firms to retain staff. With international flights currently at 8% of capacity – consisting of government-funded repatriation flights and cargo services – the company has said that 7,500 people will still be grounded between when the subsidy ends and the end of October when international borders are expected to reopen. “There’s no doubt that the aviation industry has been hit, and hit hard, and Qantas having a 75% reduction in their revenue is testament to that,” Frydenberg said, adding that the domestic market would improve as vaccines are rolled out. The airline swung to an underlying pretax loss of AUD1.03 billion (USD797.6 million) for the six months ending December 31 from a profit of AUD771 million (USD597 million) the previous year. Last week, Qantas revealed that it was considering launching a tender process for the renewal of its domestic fleet later in 2021. This would start an evaluation of new short-haul aircraft to replace its seventy-five B737-800s. According to the ch-aviation fleets advanced module, the B737s have an average age of 12.9 years, and 33 of them are between 15 and 19.2 years of age. Of the 75, which form the backbone of the carrier’s domestic and New Zealand operations, 59 are owned and 16 are leased. Speaking at a press briefing on the half-year results, Vanessa Hudson, the airline’s chief financial officer, said that the selection process would start later this calendar year. Such a competition, for an estimated order of AUD6.6 billion (USD5.1 billion), would be between the Airbus A320neo family and the Boeing B737 MAX family. Qantas CEO Alan Joyce said, according to the Sydney Morning Herald: “If you look at it from an opportunity point of view, given the [MAX] is going to be very safe, what will Boeing do to get the safest airline in the world to buy the aircraft?” In related news, the Transport Workers Union of Australia (TWU) has said it believes that the country’s Federal Court may order Qantas to re-hire 2,000 groundhandlers made redundant in January, when the court rules on the case in April.