The recovery of domestic travel in Australia and New Zealand has come at a sudden standstill as new lockdowns and travel have been implemented. New Zealand has suspended the travel bubble with Australia from midnight on July 24 for eight weeks as it tries to prevent the Delta variant of the Covid-virus to cause disruptions. Travel bubble bursts amid new Covid-crisis.

Without any meaningful international services, Qantas, Air New Zealand, and Virgin Australia had to rely on their domestic networks to make up for lost revenues. They were successful as leisure traffic made a strong recovery in the first months of this year. All airlines added to meet demand. This all changed after the Delta variant entered the country and caused several local lockdowns, first in Brisbane, then in Sydney, and now in Melbourne. The number of Covid-cases has grown by fifty percent to four percent per 100.000 citizens. Although still low compared to that in many countries, only twelve percent of all Australians if fully vaccinated and just 29 percent have received the first dose.

New South Wales, Queensland, Victoria, South Australia, and Tasmania have entered in some sort of border closure, especially to inhabitants of Victoria. It made domestic and regional airline Rex suspend or greatly reduce its services to these states. On July 21, Rex said it has grounded its six Boeing 737-800s until there is more visibility on the re-opening of interstate borders. The carrier continues to operate its Saab 340- on most of the 61 routes in its network.

Rex has grounded all six Boeing 737-800s following the closure of border states. (Rex)

Qantas has also significantly reduced capacity. In a memo to staff seen by Reuters, CEO Alan Joyce said this week that has fallen to below forty percent of 2019 levels. On June 17, Qantas announced that it would ramp up domestic capacity at Qantas, QantasLink, and Jetstar as it had witnessed a surge in air travel. Back then, Victoria was already in lockdown, but Joyce said it accounted for only twenty percent of the total Qantas network and a quick easing up of was expected soon.

A few weeks ago, Virgin Australia also announced a strong recovery and re-activated aircraft that had been in storage. It isn’t clear what the effect of the latest border closures is on its operations.

New Zealand closes the door until September 18

The main international routes to/from Australia were those on the network to New Zealand, which had benefitted from the special travel bubble. New Zealand has been very successful in fighting Covid by responding quickly to any outbreaks. As such, it has come as no surprise that Prime Minister Jacinda Ardern has stepped on the brakes and suspended the bubble for eight weeks until September 18 and is subject to review for further extensions. The trans-Tasman route to Victoria was already briefly paused on July 16. Now, the travel bubble has burst amid new Covid crisis

“This is expected to have a short-term operational and financial impact on Air New Zealand’s business until such time as the bubble reopens”, the airline said in a statement on July 23. From July 28 until August 7, Air New Zealand will operate repatriation flights between Sydney and Auckland for Kiwis who want to return home. Like Qantas, ANZ had announced plans to increase services again, offering additional to Queensland and popular places as the Gold Coast and Sunshine Coast.

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