Asia Minute: Regional Airlines: Different Responses to Business Headwinds

Jun 25, 2020

The gradual loosening of some travel restrictions in different parts of the world will have an impact on airlines. But in the Asia Pacific, shifting conditions are already forcing changes in the business.

Australia’s biggest airline will be cutting 6,000 workers. Quantas made that announcement Thursday, with CEO Alan Joyce saying, “the collapse in billions of dollars in revenue leaves us little choice if we are to save as many jobs as possible, long term.”

Cutting six thousand employees amounts to a reduction of about 20% of the workforce from pre-pandemic levels. About 15,000 other workers at Qantas and its budget carrier Jetstar remain on furlough until demand for international flights begins to recover.

Last week, government officials said Australia’s borders are likely to remain closed to most travelers at least for the rest of this year.

Earlier this month, Thai Airways International announced it would resume flights on three dozen international routes in early August — including service to cities from Paris and Frankfurt to Beijing and Jakarta.

Thai Airways also needs to go through further restructuring — it is currently under bankruptcy protection.

Prospects are slightly better for Korean Airlines, not because of any recovery in passenger traffic, but because of its air cargo business — shipping material from medical supplies to semiconductors.

Company figures show that in the first quarter, the airline made more than a quarter of its revenue from air freight with the top three markets being North America, Europe and Southeast Asia.