Inside Qantas Airways’ plan to recover from COVID-19 turbulence

The aviation industry has been worst hit by the COVID-19 crisis and Qantas Airways (ASX: QAN) alone has seen AUD 11 billion worth of revenue erosion due to travel restrictions. This is why, as part of its recovery program, Qantas had to take a serious look at its business and review property footprint. It has been looking to save costs by rationalising office space.

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Qantas has been reviewing its operations in the recent past and is looking to work with local governments. As a part of this, in February, it had announced setting up of new flight training centers in Sydney and Brisbane. It was also going to expand existing Melbourne facilities. However, Qantas has today updated that its headquarters will remain in Sydney. Also, it is to have an upgraded frequent flyer lounge in Sydney and Jetstar will continue to run from Melbourne.

It is to immediately set up a new Jetstar engineering heavy maintenance facility at Melbourne Airport with new partners Melbourne Airport, Melbourne Jet Base (MJB) (Little Group) and Victorian Government. The Government of Victoria expects the new engineering hubs to create 300 direct jobs, 400 indirect jobs and increased apprenticeship opportunities, providing a boost of about AUD 140 million to gross state product.

Shedding light on its extensive strategies, the Company stated that Sydney is going to be the launch city for its Project Sunrise. The project would feature continuous flights to New York and London when overseas travel constraints are lifted.

Also, Qantas has committed to contribute AUD 50 million in the next 10 years to develop sustainable aviation fuel capacity.

Qantas has plans to relocate heavy maintenance for Jetstar's Airbus A320 fleet to Brisbane as part of trial, while it is in discussions with the state government to conduct additional aircraft maintenance work at Cairns using existing local suppliers. In Queensland, it is going to commence talks with the government about basing Embraer E190 jets in Townsville with Alliance Airlines as partners. Qantas is also planning expansion of Qantas Loyalty in Mascot, Sydney, and has pledged to work with NSW Government to develop comprehensive employment programs. Qantas is expecting a range of benefits like payroll tax relief, training support and other direct incentives from the state governments in return.

Qantas closed the day’s trade at AU$4.740 , while Airline stock Alliance Aviation Services Limited (ASX:AQZ) closed at AU$4.190.

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