The Qantas Airways Ltd (ASX: QAN) share price is back in focus following last week’s federal government announcement of a $1.2 billion tourism package. The taxpayer-funded deal entails half-price domestic airfares for 800,000 passengers.
Another part of the package is retention payments to Qantas and Virgin employees who would normally be working in the international flight segment of the business. Although previously undisclosed, Qantas has this afternoon confirmed further details.
At the close of trade today, the Qantas share price was trading down 0.73% at $5.41.
Retention life raft replaces JobKeeper
Qantas confirmed further details of the JobKeeper replacement with The Australian Financial Review today. Australia’s largest airline stated that workers in the international business will receive $500 per week to replace the soon-to-be phased out JobKeeper.
Payments are set to start from the end of this month. Around 8,600 workers will rely on the payment as international borders remain closed. The payments are set to be carried out until the end of October, which the government hopes will mark the restart of international travel.
Whether this program will be enough relies heavily on the COVID-19 vaccine rollout. Putting added pressure on the government, news broke earlier in the week of some countries halting rollouts. Reportedly, 16 European countries suspended the use of the AstraZeneca plc (LON: AZN) vaccine over fears it may cause blood clots in some recipients.
The government is also hoping everything opens up and is back in full swing sooner rather than later. The reason being Australia’s large deficit is now risking the country’s sovereign AAA credit rating.
Qantas share price recap
The Qantas share price has increased by nearly 90% in the last year. However, this is mostly down to how hard the share was originally hit by the pandemic.
The airline’s share price is yet to return to its pre-pandemic highs. This seems logical given that passenger numbers are also still below the heights experience before COVID.
In Qantas’ results for the half-year ended December, revenue was down a staggering 75%. Despite a strong focus on reducing expenses, the airline still reported a blowout loss of more than $1 billion.
Moving forward, shareholders will have their fingers and toes crossed for the vaccine rollout to move along. The faster immunisations are completed, the sooner people can plan their next getaway outside of Australia.