Australia’s national carrier, Qantas announced

on Thursday (Feb. 20) that flights to Asia are being slashed as the novel coronavirus

outbreak slows demand – cutting into international airline and travel

industries.

In a statement, Qantas said that the decision

to reduce its overall capacity to Asia by 16% until at least the end of May is

expected to cut between 100 million and 150 million Australian dollars (US$67

million-US$100 million) from the carrier’s earnings this year.

“Qantas International will cut 16 per cent of Asia capacity until at least the end of May, impacting flights from Australia to mainland China, Hong Kong and Singapore,” .the company declared

The breakdown of the disruptions are as

follows:

[naviga:ul]

[naviga:li]Sydney-Shanghai (the airline’s sole route to mainland China): Flights remain suspended[/naviga:li]

[naviga:li]Sydney-Hong Kong: Reduced from 14 return flights per week to seven[/naviga:li]

[naviga:li]Brisbane-Hong Kong: Reduced from seven return flights per week to four[/naviga:li]

[naviga:li]Melbourne-Hong Kong: Reduced from seven return flights per week to five[/naviga:li]

[naviga:li]Melbourne-Singapore: Flights to be operated by Boeing 787s instead of larger Airbus 380s (approx. 250 fewer seats per flight)[/naviga:li]

[/naviga:ul]

Additionally, Qantas’ secondary carrier,

Jetstar will cut back services to Asia by 14%.

The Flying Kangaroo noted, however, that there

is no change to other key parts of its international network, such as the US

and UK, that remains unaffected.

As the global tourism industry continues to be battered by the COVID-19 crisis, Qantas and Jetstar will also reduce their domestic capacity by 2.3% for the second half of the Australian financial year, which ends on June 30.

For his part, Qantas Chief Executive Alan Joyce

said the airlines were acting now to limit exposure to softening markets.

“Cononavirus resulted in the suspension of

flights to mainland China and we’re now seeing some secondary impacts and

weaker demand on Hong Kong, Singapore and to a lesser extent Japan,” he argued.

The Quantas boss further contended that

decision, though unavoidable, leaves the company with a surplus of some 700

full time workers from its overall staff of 30,000. The company would

consequently need to adjust, by asking workers to volunteer to take leave owed

to them while the reductions take place.

“What’s important is that we have

flexibility in how we respond to coronavirus and how we maintain our strategic

position more broadly,” 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.”

“We know demand into Asia will rebound. And

we’ll be ready to ramp back up when it does,” Joyce posited.

 “These

past few months have been extraordinarily difficult for the tourism industry

and we’ve tried to minimize the impact of our capacity reductions as much as

possible,” he said.

About half of Qantas’ domestic

cancellations, according to Joyce, are between Sydney, Melbourne and Brisbane,

but, he said the airline was avoiding any route exits.