Qantas and Virgin Australia have signaled further flight cuts as they scramble to reassess capacity and extend fare waivers in response to the sudden introduction of new travel restrictions over the weekend.
As Air New Zealand announced an unprecedented cut to international capacity of 85 percent early Monday local time, Qantas and Virgin Australia confirmed they are also reassessing their operations.
READ: Unprecedented Air New Zealand cuts see most long-haul routes suspended.
The Australasian airlines were caught off guard by the announcement on Saturday that New Zealand would require most international visitors to isolate for 14 days due to the COVID-19 pandemic and Australia’s follow-up call to require all international arrivals to self-isolate.
Qantas, which extended its fare waiver Sunday, said the new restrictions announced over the weekend would have a major impact on international and domestic travel which would require further cuts to the Qantas flying schedule beyond those announced last week.
“We’ve moved immediately to offer a booking waiver to our customers and we’re working through the implications for our schedule now given the expected impact on demand, with a view to announcing more detail as soon as possible,” a spokesman said.
Virgin Australia said it was assessing its response to the new restrictions.
“We understand these restrictions may affect guests’ travel plans,” a spokesman said.
“Virgin Australia guests with international bookings from now until June 30, 2020, who no longer want to travel, have the option to change their flight to a later date and/or to a different destination, without incurring a change fee.
“They’ll just need to cover the difference if the value of the new fare is greater than the original.
“If they want to cancel their flight, they are eligible to receive credit to a Travel Bank with no cancellation fee.”
Rating agency S&P has lowered its ratings on Virgin Australia to B- to reflect its view that rapidly deteriorating industry conditions are spreading from the international to the Australian domestic market.
S&P said that it believes the Australia’s economy will grow at just 1.2 per cent in 2020, which is the weakest economic outlook in 20 years.
“An immediate cash outflow is likely despite sound fundamentals in Australia’s domestic aviation market,” it said.
“Virgin Australia, together with other industry players, have signalled their intention to reduce capacity in the face of weaker demand conditions.
It noted that Virgin Australia management “is taking appropriate steps to restructure its cost base in the face of the deteriorating operating environment” but cautioned that Australia’s airlines may not have “the ability to fully protect against the material exogenous shock currently underway.”
On the upside for Virgin, S&P said that the airline had “relatively low exposure to international routes, which is bearing the brunt of the COVID-19 fallout” and has a lower share of the corporate and government domestic travel market.”
S&P said: “Virgin’s large cash balance and limited debt maturities provide important flexibility to accommodate the evolving operating environment” and the cash reserves should provide adequate flexibility to accommodate the group’s cash requirements.”
International carriers serving Australasia have also been hit and Hawaiian Airlines announced Monday that it was suspending nonstop flights to Australia and New Zealand as a result of the new Australasian flight restrictions.
The airline’s five-times weekly Honolulu-Sydney flights will be suspended from March 22 to April 30, while three-times-weekly Brisbane service would be suspended until May 31 after a last flight from Brisbane on March 23.
Flights between Auckland and Honolulu will also stop until May 31 after the last flight to Honolulu on March 22.
Hawaiian is helping affected passengers with travel waivers, re-accomodating them on alternative flights and refunds.
“We respect the efforts of our Australian and New Zealand neighbors to institute stringent public health measures, and we remain dedicated to resuming our service as we continue to closely monitor evolving market conditions and regulations,” said Theo Panagiotoulias, the airline’s senior vice president for global sales and alliances.
American Airlines had already announced it was suspending its Los Angeles-Sydney service and a Singapore Airlines spokesman confirmed there would be an impact on the airline’s operations.
“But what that impact looks like, we just don’t know,” he said.
Singapore Monday issued a global waiver that allows passengers to cancel their existing flight itineraries, retain the value of their ticket and rebook their travel at later date. They will need to complete travel by March 31, 2021, and may have to pay a fare difference.
The waiver applies to fares already booked on the airline as well as new SIA and SilkAir tickets e booked between now and March 31.
The airline said it would continue to review its waiver policy and retained the flexibility to extend the cut-off date of 31 May 2020 as it assessed the impact of the COVID-19 outbreak on global air travel in the coming weeks.
Customers can contact the airline through an online form and those who booked through the airline can tact their local Singapore Airlines reservations team.
Those who booked their tickets through travel agencies are advised to contact their agents for assistance.
“Due to the high volume of incoming requests, we seek our customers’ understanding that it may take longer than usual for our service agents to respond,’’ the airline said.
“Customers are encouraged to only contact us if their flight is departing in the next 72 hours in order for our agents to focus on and assist those with urgent flight changes. We apologize for any inconvenience caused.”
