Qantas to cut capacity as travel demand falls with Omicron surge

SYDNEY • Qantas Airways has pared about a third of planned domestic and international capacity in the March quarter to better match travel demand after a rise in Covid-19 infections, it said yesterday.

The airline, which ends its financial year in June, said it will provide more details on the impact of the changes when it issues half-year results late next month.

It has not made material capacity adjustments for the fourth quarter, it said.

The Australian carrier is the latest airline globally to make major March-quarter capacity cuts as the highly infectious Omicron variant of the coronavirus spreads globally, dampening travel demand and leading to more sick calls among staff.

Rival Virgin Australia on Monday said it would cut capacity by 25 per cent this month and next month.

In Europe, Finnair said on Wednesday that it would reduce next month's capacity by 20 per cent, following earlier cuts by Ryanair and Lufthansa, while in the United States, airlines have cancelled thousands of flights amid an increase in sick calls.

Qantas said it would run 70 per cent of its pre-Covid-19 domestic capacity in the third quarter, down from a prior forecast of 102 per cent, at a time when Australia is reporting record numbers of cases because of a runaway Omicron outbreak.

International capacity will fall to 20 per cent of pre-Covid-19 levels from 30 per cent, owing to tighter travel restrictions in countries such as Japan, Indonesia and Thailand, Qantas added.

"We have the flexibility to add capacity back if demand improves earlier than expected, but 70 per cent still represents a lot of domestic flying and it's a quantum improvement on the levels we faced only a few months ago," Qantas chief executive Alan Joyce said in a statement.

He said early bookings for the Easter holidays in April were promising for domestic and international flights.



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A version of this article appeared in the print edition of The Straits Times on January 14, 2022, with the headline Qantas to cut capacity as travel demand falls with Omicron surge. Subscribe