Nearly all the Qantas fleet has been grounded due to Covid-19 restrictions. Photo / Bloomberg
Nearly all the Qantas fleet has been grounded due to Covid-19 restrictions. Photo / Bloomberg
Qantas chief executive Alan Joyce says the crisis hitting airlines has turned into survival of the fittest, a battle in which he's confident his airline can be a winner.
And he said Qantas was also ready to step up operations across the Tasman if a border bubble between New Zealandand Australia is formed.
Regular flights between Australia and New Zealand could begin soon after more Australian domestic routes were reopened, he said.
Qantas is currently operating only 5 per cent of its pre-crisis domestic passenger network and 1 per cent of its international network, reductions which are due to be extended to the end of June.
New Zealand was Australia's second biggest market for visitors (following China) and Australia the biggest source of visitors for this country with more than a million people travelling each way a year.
''It gives people a destination from Australia that they're comfortable flying to and I think New Zealand's destination that they'll fly to here,'' Joyce said.
Today Prime Minister Jacinda Ardern and her Australian counterpart Scott Morrison said they were committed to a trans-Tasman bubble when health and other protocols had been developed.
Speaking shortly before the prime ministers' announcement Joyce said it could happen ''pretty soon'' after a domestic reboot in Australia.
''It's a positive we weren't expecting up till now and hopefully it can be established as a model to open part by part the international network when various countries have a control on Covid-19, like the New Zealanders have and it could be a very good model to see the international market up in phases.''
If travel restrictions came off, the airline would only add capacity if there was sufficient demand.
''If it was to come off in June at seven days' notice, we can add flights back to 10 per cent, maybe at two weeks' notice up to 20 per cent,'' said Joyce.
''We would only add that back if we believe from the numbers we are seeing and the demand we are seeing, the research we are seeing, that we can do that in a cash positive position.''
Because of the extension by a month of limits to flying, about 25,000 staff would remain stood down to at least the end of June with those in international operations almost certainly longer than that.
''All the hard decisions we've made in the past few months have been focused on making sure that Qantas Group survives this crisis and we have to make sure that it's also well placed for the recovery,'' said Joyce.
The airlines that would emerge from the crisis were those that can survive long periods with very little cash coming through the door.
''By that measure, Qantas is one of the fittest airline groups in the world,'' he said.
Alan Joyce gave up his salary for the second half of the financial year. Photo / Getty
Qantas had borrowed $A1 billion ($1.06b) in March against seven of its Boeing 787s that it had bought with cash. It announced it had raised another $A550 million today against three 787s and Joyce said it had a further $A2.7b in unencumbered assets that it could secure finance against.
He said weekly cash burn would be reduced to $40m in June, among the lowest for an airline of Qantas' size.
''This means we're very well placed to ride this out and to take part in the recovery when it arrives. Because Australia has flattened the curve, there's some hope that travel demand will come back faster than expected,'' he said.
It was hard to predict what the demand would look like and recovery was likely to be slow, but it was encouraging to ''see some light at the end of the tunnel''.
He said the future was uncertain for the biggest aircraft in its fleet - the ageing Boeing 747 jumbo jets and Airbus A380s.
The jumbos could fly by the end of the year but it was planning to retire them by then so there is a likelihood that they won't come back. It was leaving options open with its A380s.
Six had been remodelled but work on the remaining six had been paused to save cash.
The planes would be part of a recovery into Britain and the United States but it was uncertain when that would happen.
