Qantas (ASX:QAN) budget flights to exceed pre-COVID levels by March

With a new monopoly, Jetstar is putting on so many domestic flights that it’ll soon be flying more than it did in 2019.
The post Qantas (ASX:QAN) budget flights to exceed pre-COVID levels by March appeared first on The Motley Fool Australia. –

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Qantas Airways Limited (ASX: QAN)’s budget brand Jetstar has revealed it will already exceed pre-COVID volume of flights within 3 months.

The stunning announcement was made Tuesday, with the airline citing a pent-up demand for domestic travel with international transit still closed.

“Travel demand to popular holiday spots is bouncing back in the lead up to the summer holidays,” said Jetstar chief Gareth Evans.

“While international borders remain closed, more Australians are set to explore places around the country they have never visited, which is great news for local hospitality and tourism operators.”

Jetstar now enjoys a monopoly in the budget aviation subsector, with Virgin Australia’s low-cost arm TigerAir shut down earlier this year.

More than 850 return weekly flights servicing 55 routes would be operational by March, Jetstar announced Tuesday. And this is actually 110% of its weekly schedule in March 2019.

Qantas shares were down 0.39% on Tuesday, trading at $5.05 at the time of writing.

Australians want to travel, even if it’s not overseas

The airline recently conducted a survey that showed 86% of Australians planned to go on a domestic trip during 2021. More than half stated they wanted to visit a location that they’d not been to before.

“Australians are globally renowned for loving travel and as we approach 2021, demand for our low fares services is stronger than ever,” Evans said.

There are still many destinations that are not economically viable, such as Adelaide and Newcastle. But Jetstar can even operate on these routes due to the federal government’s aviation industry assistance, which will continue through 28 March.

The new Virgin, under different owners, has vowed to operate as a mid-tier carrier and avoid competing with Qantas or Jetstar.

But Regional Express Holdings Ltd (ASX: REX) has just broken out of its rural roots and will start flying between the 3 big cities – Sydney, Melbourne and Brisbane.

“We have a lot of repair work to do given the huge toll the COVID crisis took on airlines,” said Evans.

“But the flexibility we have across our fleet means we can offer these extra services, help boost tourism and the local economies of the communities we fly to and also get more of our people back in the air.”

Jetstar’s study showed Hobart and Melbourne has surged in popularity, while Cairns and the Gold Coast appealed to families as an alternative to international destinations.

The New Zealand government also announced earlier this week that a bidirectional travel bubble would open across the Tasman Sea by March.

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Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Qantas (ASX:QAN) budget flights to exceed pre-COVID levels by March appeared first on The Motley Fool Australia.

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