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Qantas sees domestic flights back at 90% capacity this quarter

Australian carrier enjoys local travel revival as country controls COVID spread

Qantas Airways expects domestic passenger capacity to exceed pre-COVID levels in the next fiscal year.   © Reuters

SYDNEY -- Australian carrier Qantas Airways projects that passenger capacity for domestic flights will climb to 90% of pre-COVID levels during the April-June quarter thanks to the return of leisure and business traffic.

This revival reflects Australia's success at controlling the spread of infections in urban areas. Last month, the government debuted half-off discounts on air tickets for major tourist destinations such as the Gold Coast and Cairns as a way to stimulate those local economies.

"The current environment is characterized by extremely strong leisure demand," Qantas said Thursday. Corporate travel, including from small businesses, has rebounded to 65% of pre-coronavirus levels as well, the carrier said.

But domestic travel demand also benefits from a shift among customers who normally would book international trips. Australia still imposes a general entry ban on foreigners, and Australian citizens traveling overseas are required to quarantine for two weeks upon return.

On Monday, Australia will open a quarantine-free travel bubble with New Zealand, which has achieved similar success in containing the virus.

Qantas predicts that domestic passenger capacity will exceed pre-COVID levels for the next fiscal year ending June 2022. The capacity at its budget carrier Jetstar is projected to be 20% above pre-pandemic levels and 7% above for Qantas itself.

"We're now seeing really positive signs of sustained recovery," Qantas Group CEO Alan Joyce said in a statement.

Yet Joyce noted that the pandemic wiped out more than 11 billion Australian dollars ($8.46 billion) in revenue. In the fiscal year through June 2019, international travel accounted for roughly 40% of the group's AU$17.9 billion in sales.

The loss in revenue "will keep growing until international travel recovers," Joyce said.

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