With COVID-19 case numbers appearing to weaken in New South Wales and even gradually declining in Victoria, all eyes are on when Australia’s borders will also soften around the country.
For the past six months, most of our internal borders have been closed to some degree, which local tourism businesses and airline carriers say is a measure destroying our once booming industry.
It’s a decision that has been debated as having no medical support by the federal government, and panned by airline chief’s as being “politically driven” rather than following health advice.
Speaking at the carrier’s full year results last week, Qantas CEO Alan Joyce expressed his growing frustration over blanket state and territory border closures, calling for more transparency around the decisions that results in a border opening or closing again.
“At the moment there are no rules around how borders are going to close and going to open,” he told reporters on Thursday.
“Nobody has an issue with the international borders being closed – that’s protected Australia. Nobody’s had an issue with the borders to Victoria being closed.
“But it’s very clear that we don’t have clear guidelines for when the borders will open, when they will close. We have this situation where there are large numbers of states and territories that have zero cases and they’re not even open to each other.”
But despite Mr Joyce claiming the ongoing state and territory border closures appears to be “politically driven”, he noted three intrastate flights were bucking the trend and booming amid the pandemic.
“We have routes like Brisbane to Cairns which is actually the top route in Qantas’ network,” he said, adding that the route was flying at “fascinating” levels.
“The traffic on that (route) is bigger than the traffic we had pre-COVID-19.
Perth to Broome is actually ahead of what it was pre-COVID-19. Sydney to Ballina/Byron Bay is ahead of what it was pre-COVID-19.
“What is uplifting is we know when the borders open up and people can travel, there is huge demand pent up for travel.”
This trend of intrastate travel while internal and international borders remain closed, according to airline analyst Peter Harbison, could lead to airlines experimenting with their route network going forward.
“In the US they are publishing routes that aren’t actually operational to test market demand,” Mr Harbison told the ABC.
“They’ll publish 20 flights online and see how they go and pull the ones that don’t work.
“We saw this in Australia before the latest restrictions and we’ll see it again.”
However, despite Mr Joyce pointing to flights as low as $19 in a bid to lure back travellers earlier this year, the airline’s most recent results have analysts questioning the return of bargain airfares.
When it comes to local routes, IBISWorld senior industry analyst Tom Youl said the announcement of a $2 billion loss from Qantas last week will likely mean an increase of ‘normally priced flights’ rather than bargain sales on popular routes like Sydney to the Gold Coast or Ballina/Byron Bay.
“We’re not likely to see any heavy discounting or cheap flights that Australians have become accustomed to,” he told the ABC.
“Airfares are likely to remain in that moderate to high price range in the next 12 to 18 months.”
In an interview with news.com.au around international fares, aviation expert Neil Hansford said the “silly” prices we’ve enjoyed to places like Hawaii and even the west coast of the US will be less likely as the industry finds its wings again in a post-COVID world.
“Pricing will remain competitive despite the large aircraft like A380 and 747’s disappearing probably forever,” he said.
“Near regional (routes) like Bali and Pacific Islands which can be done with A320 and 737-800 will return to Qantas/Jetstar level fares for up to 12 months from relaunch.
“But flights to Europe will be difficult as many Australians will want to do one stoppers so they don’t transit mass hubs like Dubai and Abu Dhabi. I still think the market for leisure travellers will plateau … and only ‘silly fares’ will be via Chinese carriers.
“But one thing’s for sure, we’re not going to have the $1200 Sydney to London flights that were being offered.”
Dr David Beirman, senior tourism lecturer at the University of Technology, said airline consumers have had a “good run” when it comes to cheap seats, arguing that if ‘cheap Tuesday’ seats do make a comeback – they won’t stick around for long.
“The COVID-19 experience has shown airlines that this model (cheap fares) simply doesn’t work in tough times,” he told news.com.au.
“Airlines cannot expect kind taxpayers to bail them out so as a result I think airfares
will rise.
“Market pressures should prevent extortionate fares. Low cost carriers may market what look like cheap fares, but the ancillaries (the extras) will more than likely cost a lot of money.”
