International travel is unlikely to return to normal until 2021, according to the Federal Tourism Minister who says that keeping the borders shut is essential in flattening the COVID-curve.
Simon Birmingham has said one of the main reasons Australia was able to flatten the curve of COVID-19 cases was the government’s border closure, adding that “I do sadly think that in terms of open tourist-related travel in or out of Australia, that remains quite some distance off.”
Speaking at the National Press Club, Birmingham said that “just because of the practicalities of the volumes that are involved and the need for us to first and foremost keep putting health first.”
Minister Birmingham’s remarks coincide with news from Qantas that the airline will cancel the remainder of its international flights up to late-October, with the possible exception of flights to and from New Zealand, if the two countries finalise a travel ‘bubble’.
A Qantas spokesperson has said that “with Australia’s borders set to remain closed for some time, we have canceled most international flights until late October… we still have some flights scheduled across the Tasman in the coming months, with the expected travel bubble between Australia and New Zealand.”
“Should travel between Australia and other countries open up and demand return, we can add more flights back into our schedule,” the spokesperson said.
Qantas has fared better than a number of its competitors, with a reported 11 airlines, including Virgin Australia buckling to the pressure applied by the COVID-19 virus and entering administration.
Analysts have said that airlines with established domestic routes have a significantly higher chance of weathering the economic storm, adding that long-haul international carriers are most at risk of collapse.
Peter Harbison works for airline consultancy company CAPA said that “any airline that doesn’t have a domestic network is going to be struggling because they have to reconstitute their global network, and that’s going to be hard.”
Harbison continued to explain that “some of the most vulnerable carriers are from South-East Asia… ones that have been struggling for years – Garuda, Malaysian, Thai, which is already in bankruptcy effectively.”
Emirates, Singapore Airlines, Etihad and Cathay Pacific also have an uphill battle in terms of their recovery.
According to the ABC, “governments around the world have poured in about $130 billion to keep some of the biggest names in aviation alive as the industry heads for its worst year on record with total losses of around $120 billon.”
Aviation analyst, Joanna Lu has told the ABC that “the whole industry is established on low fares and high traffic and very low yields… the whole industry was not very profitable before the pandemic,” she added.
Minister Birmingham added that there’s potential for a business travel bubble, too. “I think those who might not only be international students, but be here for longer-term work purposes or longer-term business and investment purposes, logically you can extend those sort of same safeguards to them and their state.”
“I hope that we can look eventually at some of those countries who have similar successes in suppressing the spread of COVID to Australia and New Zealand, and in working through that with those countries, find safe pathways to deal with essential business travel that helps to contribute to jobs across our economies.”
Birmingham and his government hope that Australians will spend their travel money domestically to spur the domestic economy and support more small businesses.
Last year, Australians spent $65 billion on holidays, and Minister Birmingham has said it’s “an almost patriotic duty” to holiday in Australia, instead.
Mr Harbison said that in terms of international travel, “we’re going into a deep recession globally and having enough people to spend enough discretionary money, and corporates to spend business money [on flights] is going to be very, very difficult.”
David Flynn, owner of the Executive Traveller anticipates airfares to increase as corporate travellers begin to realise their trips weren’t necessary in the first place.
“It will still be necessary to travel for business, especially to countries in Asia where relationship-building is so crucial, but a lot of work after the contract has been signed will be shifted to online.”
“Adding to the no-frills flying experience, a number of airlines are switching off their inflight Wi-Fi and their inflight movies because they cost money…. And airlines are trying to conserve their cash,” he said.