Will QAN survive?, page-1681

BITRE (a Commonwealth Government outfit) has issued its July 2021 Australian domestic air passenger statistics.

These don't show the performance of individual airlines, and only measure domestic routes where more than 8000 journeys (i.e. c.4000 each way) were recorded in a particular month.

Pre COVID-19, the Melbourne - Sydney - Melbourne route used to be Australia's busiest. In July 2019, 758300 travellers made a one way trip, or a median of about 12230 each way each day (noting that some days of the week are busier than others).

In July 2021, the number conveyed MEL - SYD or SYD - MEL was just 12000, or a tiny 1.58 per cent of those carried two years earlier. On average, 193 passengers were conveyed each way each day, and the load factor (the percentage of available seats that were occupied) dropped on this normally #1 route to only 21.5 per cent, meaning almost four seats in every five on offer were vacant.

There were only four domestic routes recording above 50000 passenger trips in July 2021, of which Brisbane - Cairns - brisbane at 95400 was by far the busiest. This includes a school holiday period but in July 2019, 119700 travellers were on board an aircraft on this sector one way.

Brisbane - Sydney - Brisbane is in 'normal times' the number two route. In July 2019: 431100 passenger journeys, dropping to 11500 in July 2021, or 2.67 per cent of the numbers carried two years ago.

Overall, the airlines combined on major routes in July 2021 had a total of 2720300 journeys, down from 5452600 in July 2019, so the numbers for this month in 2021 were just 49.88 per cent - half - of two years ago.

The Federal Government has subsidised these flights despite the low nationwide load factor of just 50.6 per cent, but they mask a large number of domestic planes that were either idle on many days or when flying, underutlised in what the airlines call 'block hours' of flying.

These latter aircraft must be maintained which is costly, so more $$$ down the QAN gurgler.

How QAN's share price continues to be at grossly unrealistic levels (even looking into the future) shows how irrational 'Mr Market' can be with some stocks. No prospect of net profits in the short term unless it can squeeze billions more out of the Federal or State governments. I suspect Federal Treasurer Frydenberg would have a view on that, notwithstanding the relative immediacy of a Federal election.