Qantas demands national action to avoid horrible 'cliff'

Why is there no travel allowed between states with no Covid-19 cases? It just doesn't make sense, says Qantas CEO Alan Joyce.

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Qantas Airways Limited (ASX: QAN) chief executive Alan Joyce has called for national action to steer the country away from a disastrous "cliff".

While announcing a $2.7 billion loss-before-tax for the 2020 financial year, Joyce expressed his frustration at a lack of national coordination for state border closures due to Covid-19.

"At the moment, there are no rules around how borders are going to close and going to open," he said.

"Some areas of Queensland, Tasmania, and other parts of the country, 30% of the jobs are dependent on tourism."

Joyce added he's not asking for a complete opening of all state borders, but merely clear national rules based on health advice on when they're closed and when they're open.

"If it's safe to do it, it should be opened… We're saying 'Let's have the rules to say what would you have to see in order for those borders to be open?' So, we all have clarity and know what's the right thing to do."

Travel restrictions are political, not based on health

The Qantas chief was especially frustrated at the travel restrictions between virus-suppressed areas.

"We still don't understand why states with zero cases for a long time have borders closed to states with zero cases. That doesn't seem to make any medical sense or any advice that we  have seen."

The Queensland premier Annastacia Palaszczuk this week stated her state's borders would remain shut to Victorians and New South Wales visitors until at least Christmas.

Joyce slammed such a declaration made this far out from December, considering the fast-changing nature of the epidemic.

"What's the basis of it? … Even if Victoria gets down to no cases, or New South Wales gets back to no cases, is that still the situation?"

"Surely, these decisions should be based on the facts, the health advice, and the level of cases that we're seeing around the various states. That's what we're calling on… And we think that eventually will cost jobs and businesses, particularly a lot of the small businesses in Queensland, to go out of business."

Flights to the US won't happen before a vaccine

Qantas would concentrate on reviving the domestic business before shifting its focus to re-opening international routes.

"Potentially have the bubbles, country by country, when we have a similar level of exposure to the virus – New Zealanders, they are an example – that should potentially open up relatively fast compared to the other countries around the world."

Traditionally a big money-spinner for the airline is travel between Australia and the US.

But the dire Covid-19 infection rate in the North American nation has Joyce pessimistic about a revival anytime soon.

"The US, with the level of prevalence there is probably going to take some time. It will probably need a vaccine before we could see that happening," he said.

"We potentially could see a vaccine by the middle or the end of next year and countries like the US may be the first country to have widespread use of that vaccine. So that could mean that the US is seen as a market by the end of 21, hopefully we could, dependent on a vaccine, start seeing flights again."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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