News: Qantas cuts flights as coronavirus hits demand

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Qantas will reduce flights across Asia in response to a drop in demand due to the ongoing coronavirus outbreak.

The actions were announced as part of the group’s half year financial results, where the net profit impact of the virus was estimated at between $ 100-$ 150 million for financial 2020.

Qantas said the impact would likely be soften by lower fuel prices.

The flag-carrier confirmed its Sydney-Shanghai flight, its sole route to mainland China, would remain suspended.

At the same time, Sydney-Hong Kong will be reduced from 14 return flights per week to seven, while Brisbane-Hong Kong will fall from seven return flights per week to four.

Melbourne-Hong Kong will also be reduced from seven return flights per week to five.

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Melbourne-Singapore will see flights operated by Boeing 787 planes instead of the larger Airbus 380, meaning approximately 250 less seats per flight.

There is no change to other key parts of the Qantas International network, such as the US and UK, which remain unaffected.

Half year financial results

At the same time, Qantas said it continued to deliver strong earnings in a mixed market, with an underlying profit before tax of $ 771 million for the first half of the year.

Statutory profit before tax stood at $ 648 million for the period.

The underlying result was $ 4 million less than the same period last year – despite $ 51 million in higher foreign exchange related cost impacts, a $ 68 million impact from global freight weakness and disruption in Hong Kong and a $ 55 million increase in operating costs from the sale of domestic airport terminals.

The strong performance despite these factors was underpinned by capacity discipline, ongoing transformation and growing share in key markets, Qantas said.

Qantas Group chief executive, Alan Joyce, said: “Overall, our performance in the first half was very positive and it shows we remain in a strong position going forward.

“In the domestic market we dealt with some travel demand weakness and a structural change in our overheads from the sale of domestic terminals.”

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