20 Feb 2020

Qantas cutting some trans-Tasman flights

3:32 pm on 20 February 2020

Australian national airline Qantas is cutting some trans-Tasman flights because of the expected fall in business from the coronavirus.

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Photo: 123RF

It said it will reduce capacity by 5 percent because of a fall in demand, along with the reduction in services to China, Hong Kong and Japan.

Qantas and Jetstar services between Sydney-Auckland, Melbourne-Auckland and Brisbane-Christchurch will be affected.

It's also cutting some domestic flights, but services into the United States and Europe will be unaffected.

"What's important is that we have flexibility in how we respond to Coronavirus and how we maintain our strategic position more broadly," chief executive Alan Joyce said

We can extend how long the cuts are in place, we can deepen them or we can add seats back in if the demand is there."

Joyce added there would be a rebound and recovery at some stage and that the cut backs were the equivalent of grounding 18 planes, affecting about 700 staff.

He said to avoid job losses they would be using up leave, freeze hiring, as well as bring forward plane maintenance.

The airline is forecasting the virus will hit its full year earnings by as much as $A150 million.

In its half year earnings report Qantas said it is staying flexible in managing capacity, and there would be some offset from a lower fuel bill.

Overall group results showed a near 19 percent fall in underlying earnings to A$790m.

Auckland International Airport has shaved its full year earnings forecast by $5m to between $260m and $270m, because of the virus outbreak.

Air New Zealand reports its first half earnings next week, with expectations of a small drop in profit to around $145m. It has already halted flights to China until the end of March, and plans reduced services to the region after that.