7 travel industry changes due to coronavirus and what they mean for Aussies

As of 25 March, a ban is in place for all Australians seeking to travel overseas, and from midnight on 28 March, 14 days of enforced quarantine in selected luxury hotels has taken place.[1] Point Hacks (pointhacks.com.au), one of Australia’s biggest communities of airline rewards experts, has analysed the latest pandemic-related travel changes and advises what each of them mean for you.

 

Daniel Sciberras, a frequent flyer expert and spokesperson for Point Hacks, says: “From the suspension of all international and a majority of domestic flights to generous points promotions for non-travel purchases, and extensions to frequent flyer membership tier status, we want to ensure Aussie travellers can cut through the noise about the pandemic-related travel restrictions to know what they can expect in the coming months and how the changes affect them.”

 

Point Hacks explains what the latest pandemic-related travel changes mean for you.

 

1. Qantas, Jetstar, Virgin, and Tigerair suspend most domestic flights. Until 31 May, Qantas has suspended its domestic flight capacity by more than 50 per cent and Jetstar by 70 per cent. Until at least 14 June, Virgin has suspended domestic capacity by 90 per cent and has completely grounded Tigerair.

What it means for you: The ‘Golden Triangle’ routes – Sydney, Brisbane, and Melbourne – will be the main routes kept open, albeit at a reduced capacity. For instance, Qantas’ Sydney-Melbourne return services are reduced from 250 to 88, and its Sydney-Brisbane services are reduced from 142 to 50.[2] While Government restrictions on non-essential travel are in place, Daniel expects very few Australians, with the exception of those travelling to provide essential services, will fly domestically during the Easter break to comply with new Federal and State Government restrictions. Once the restrictions are lifted, however, he anticipates there will be a relatively quick bounce-back for domestic flight demand, both in the leisure and business space. With full capacity not likely to fully re-introduced at once, this will likely produce upward pressure in pricing by Qantas and Virgin Australia Groups.  The recovery in international demand is likely to be much slower, given that Governments around the world are likely to lift travel bans and restrictions at different times, along with deep recessions being experienced by most countries in the coming months likely to materially dampen demand for overseas travel.

 

2. States have implemented strict border controls as authorities enforce road closures to mandate against non-essential travel. Tasmania, South Australia, Western Australia, and the Northern Territory have closed their borders to non-residents entering the state. The Queensland-NSW border closed all roads except for three (the M1, Gold Coast Highway, and Griffith Street), where border checks are now being conducted – the first time since the Spanish flu in 1919. Exceptions will only be made for returning residents or those that identify the need to travel across borders for work or livelihoods. They will be forced to self-isolate for 14 days and inform police where they will be.

What it means for you: With roads closed into each of these States as non-essential travel is introduced, Aussies must heed the Prime Minister’s advice to ‘stay at home.’ Until Government restrictions on pubs, restaurants, gyms, cinemas, and other places of social gathering lift, there will be very few opportunities to travel to ‘destinations’ – even within your own state. These State border closures have also had a dramatic effect on demand for domestic flights, and will not likely recover until 14-day self-quaratine provisions for interstate travellers are removed.

 

3. Qantas, Jetstar, and Virgin offer credit for cancelled international and domestic flights. Passengers on upcoming Qantas flights can cancel any flights booked up to 31 July 2020 and receive a credit voucher for the full amount to be used within 18 months. Jetstar is also offering customers the option to cancel and receive a credit voucher on all bookings for flights up to 31 May, however, this offer closes today (31 March).[3] Virgin is allowing customers to change the date or destination – or cancel and receive a credit voucher – for any flight booked up to 30 June.

What it means for you: Qantas customers will need to make any flight cancellations before 30 April. Qantas has waived the change fees – even on the cheapest restricted ticket – but customers will need to cover the difference in fare (if any). Virgin customers, however, can cancel up until 48 hours before their flight and without incurring a fee. Once the Government lifts travel restrictions, Daniel says that while the airlines will put back some of its capacity, there will likely to be intense competition for the limited seats available, given many travellers will look to use their travel credits for the upcoming spring school holidays and Christmas toNew Year travel, in addition to all new paid bookings. As such, Daniel expects there to be limited availability in the short-term for reward seats. 

 

4. Qantas and Virgin offer most members a 12-month extension on tier status, while Virgin gifts extra status credits to Velocity members. Elite Qantas Frequent Flyer members – Platinum One, Platinum, Gold, and Silver – with a membership year anniversary date between March 2020 and February 2021 will automatically retain their current status for the next 12 months. Qantas is also waiving the need for members to clock-up four Qantas flights to maintain their status. Meanwhile, Virgin Australia is also extending status membership for 12 months, in addition to gifting status credits over the next three months to help its elite Velocity members maintain their membership tier.

What it means for you: Eligible Velocity members will benefit the most, as the extra monthly allocation of status credits – 20/month for Silver, 35/month for Gold, and 70/month for Platinum – gives them an opportunity to move up a status tier if they are a few points away from the next tier. In saying that, both Qantas and Virgin Australia are acknowledging the value of elite members of their respective frequent flyer programs and the difficulty they face to attain or retain the status level during this period of decreased flying. As such, they are looking to ensure that they are their airline of choice once the crisis passes.

 

5. DFAT has banned all Australians from travelling overseas. All Australians have been banned from travelling abroad from 25 March – this is even higher than the highest level of travel restriction made by DFAT (ie “Do Not Travel” level 4 of 4), and the first time it has been applied to all international travel. Unlike Level 4, which states that citizens should not travel aboard, a ban will actually prevent them from stepping on an international flight, with very few exemptions, such as Australians travelling for compassionate reasons or urgent and unavoidable work.[4]
   What it means for you: A ban in escess of Level 4 in effect means that you cannot travel overseas at this time. If you’re an Australian citizen who is still overseas and wanting to return home, the Australian Government may be unable to help.[5] As major transit hubs such as Dubai, Abu Dhabi, Singapore, and Hong Kong continue to close their borders, there are very few flights travellers can board to return to Australia – and, conversely, for visitors in Australia to return home. For instance, Qantas partner Cathay Pacific has suspended flights to Hong Kong from Melbourne, Brisbane, Perth, and Adelaide, though it will still fly to Sydney three times a week. Velocity partner Singapore Airlines is still allowing a few limited flights from Sydney, Melbourne, and Brisbane to Singapore.

 

6. The Aussie dollar plunges to an 18-year low, at c. 61 US cents.
   What it means for you: If you converted cash for future travel plans today, unfortunately, it would leave you significantly out of pocket. For instance, converting $10,000 to USD would only get you US$6160. This time last year, the AUD was worth around 70 US cents, and hit highs of 81 US cents in January 2018. Should the Australian Dollar remain at these lows for the USD and other currencies for the foreseeable future, travellers will likely divert demand away from holidays to the US and other overseas destinations to more domestic holidays, which would be likely to benefit Virgin Australia more than Qantas given the former’s domestic focus and limited international network. 

 

7. Qantas and Virgin pushing on-the-ground offers and promotions. Given there’s going to be limited air travel for months, Qantas and Virgin have been increasing their marketing on ‘home brand’ offers to encourage their frequent flyer members to earn points via on-the-ground opportunities.

What it means for you: Members of frequent flyer programs can still accumulate points outside of flights. In fact, Qantas launched its new two-tiered Points Club program this month, a scheme designed for those that earn most of their Qantas points on the ground (either through credit cards, groceries, or other activities), rather than in the air. These members will automatically unlock Points Club when they earn over 150,000 points, and Points Club Plus when they reach 350,000 points in a membership year. At present, Qantas is heavily promoting bonus point earnings of up to 120,000 points for those who sign up to Qantas Health Insurance, 15,000 bonus points for those that switch to Red Energy, and 10,000 bonus points on selected cases of Qantas Wine. Velocity is promoting 1000 bonus points on first-time Ola riders.