Australia has come to a standstill. Domestic services have gone from hourly to weekly and some cities have been abandoned by airlines. What is the road to recovery for the Australian aviation industry? And how long will it be until we are all flying again?
The situation in Australia so far
Australia was fortunately not hit as hard as other countries by the coronavirus, thanks to swift government action to close borders. The nature of Australia also doesn’t help the virus, with its small population spread over a large continent.
However, the aviation industry in Australia has been hit as hard as anywhere else, with many flights canceled and a 98% drop in demand.
You only need to look at the world’s second most popular route, Sydney to Melbourne, to see how far it has fallen. Normally there are over 70 services a day, with four mainline carriers operating flights nearly every 15 minutes (not to mention other flights with smaller carriers flying to regional centers such as Rex or Corporate Air).
Now there is one flight a day with Qantas operated by a turboprop Q400, that goes via Canberra (extending a 50-minute flight over three hours), and another two with other carriers. This is a reduction to 4.2% of its original capacity. And airlines are reporting that these flights are not even full.
The silver lining is that the airline industry down under can’t fall much further. With essentially 0% demand, from here it can only go up.
What are the first steps?
With closed borders and no travel within the country, the coronavirus is expected to be under control in a few weeks. This means that aviation services can begin the long road to recovery.
First, the government will begin regional state services and mine-site fly in fly out operations. It is imperative that regional airports be reopened and that lucrative mining operations restarted for the local economy.
Once this is in full swing, the government will then move to boost domestic services, with a focus on the lucrative link between Sydney and Melbourne. There are rumors that the Australian government might consider subsidizing flights at first until the airlines are operational again (as these first few flights are very expensive), as well to encourage domestic tourism.
Tourism Minister Simon Birmingham said to the ABC that “domestic travel restrictions would probably be lifted before restrictions on overseas travel were”
With Virgin Australia grounding Tiger Airways, it is unlikely that we will see them in the skies at this stage (with its return increasingly unlikely).
Opening borders slowly
Once domestic travel is operational again, and regional centers linked, Australia will start to reopen its borders with close neighbors who have conquered the virus.
New Zealand will likely be the first choice, as the island nation is a bit ahead of the curve on this crisis. China might be high on the list if they have proven that the virus is under control, as there are many international students eager to return to Australia to study.
From there, Australia will examine countries on a case by case basis with the eventual plan to reopen borders.
Alas with borders likely closed for the remainder of the year to all but essential travel, Australia will not see many international carriers resuming services to the island nation until well into next year when a vaccine is finally released to the public.
This will be beneficial to Qantas and Virgin Australia (presuming the later is still able to perform international flights) as they will have their pick of the routes.
What do you think about this prediction? Let us know in the comments.