Australia air travel in 2021: Airline CEOs reveal what's in store

Forecasting the future is fraught right now, especially if you've tried making travel plans recently.

Consumers face confusion at every turn. Re-book those cancelled Europe flights for next year, or wait until 2022? Will you be able to travel interstate for a holiday this summer?

The crippling uncertainty of closed borders and an indefinite pandemic makes booking anything almost impossible.

This week a CAPA Centre for Aviation summit featured top airline and tourism bosses grappling with how and when they can revive their floundering industries. They shared their fears, forecasts and suggestions about what comes next. Of course, no one really knows but here are some insights.

International travel

Aviation's immediate future hangs on the global community's appetite for risk until a vaccine is developed.

In Australia, Qantas has given up on international travel until at least July next year as it operates at just 20 per cent of pre-COVID capacity and most staff are stood down or laid off. The airline's A380 superjumbos are in deep storage in the Californian desert until at least 2023 and they may never return.

Amid the gloom, Qantas chief executive Alan Joyce sees positive signs on the horizon.

"We see the international business to be smaller for sometime," he said. "But things could change."

Joyce points to "great developments" on improved testing capabilities which he says could resolve the issue of travellers needing to quarantine and trigger travel bubbles opening between certain countries.


"If the vaccine becomes available ... at the lightning speed it's happening, we may see earlier operations of international services," he said. "So I think there's reasons to be optimistic, particularly with testing and particularly with a vaccine that could change that dynamic in 2021," Joyce said.

Virgin Australia boss Paul Scurrah is one who's keen to see travel bubbles emerge, particularly across the Tasman.

"If that opens up soon we'd jump at it because we've got aircraft we want to deploy and New Zealand is part of our future plans. The sooner we can be back there, the better," he said.

"When the borders are open domestically, you will see a significant spike of both leisure and also corporate traffic coming back, but it'll take a little while for everyone to be in that same space and come back."

Globally, low-cost carriers are tipped to thrive as a global recession sharpens passengers' focus on price and value. Corporate travel is expected to take much longer to resume than the leisure segment, weighing on full-service airlines' recovery.

Akbar Al Baker, chief executive Qatar Airways, says the biggest challenge airlines face is lack of uniformity because "each country is forming their own rules and regulations".

More broadly, he said the pandemic will force a mindset shift similar to how 9/11 transformed aviation security procedures.

"We have to adapt to living with the virus for the rest of our lives," Al Baker said.

"I remember when I was a kid we used to carry a smallpox and TB health certificate.

"We used to get to a health counter and then go to the immigration counter. I think this will have to be introduced until such a time that there is a guaranteed, safe, sustainable vaccine that is available to every single human being on our planet."

For now, international travel remains off limits to all Australians except those deemed to have a valid reason. On Thursday the Australian government rolled over the human biosecurity emergency period for another three months until December 17, extending restrictions on overseas travel.

Domestic travel

Qantas and Virgin are itching for state borders to reopen so they can get planes in the air and stem the bleeding of cash.

While Virgin survived its administration process, the airline emerged smaller and less willing to compete with Qantas on marginal routes. The demise of Tigerair may also reduce pressure on Jetstar airfares.

One thing that's unlikely to survive the pandemic is any generosity towards flexible bookings. Both Qantas and Virgin have waived change fees during COVID-19 as they seek to restore confidence in the market. But once demand bounces back, don't expect flexibility to remain.

"We did for the first time give complete flexibility on every Jetstar airfare during this crisis. But is that going to continue indefinitely? It can't," Joyce said.

"If every airfare is going to be completely flexible your revenue management system I think fundamentally breaks down over the long-term."

Tourism Australia boss Phillipa Harrison says the crippling uncertainty is "really hurting people's ability and also desire to lock things in and travel."

"I have friends who have rebooked holidays four times now and there's only so many times you're going to do that before you just give up and go down the coast and hire a holiday home," she said.

"Consumer sentiment is very, very volatile at the moment."

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