Qantas will make Covid-19 vaccines mandatory for international travel when they become readily available. "Our position on this is clear," chief executive Alan Joyce said during a market update today. "We have a duty of care to our people and our passengers, and once a safe and effective vaccine becomes readily available, it will be a requirement for travel on our international services." He acknowledges that there will be some exceptions for people who cannot be vaccinated for medical reasons, and states that domestic flights and possibly trans-Tasman flights could be exempt from the requirement. Joyce states, however, that Australia's experience with the pandemic suggests that a vaccine is needed for international travel to restart properly, citing the Australian prime minister's view that international travellers will eventually have to make "a binary choice" between vaccines or quarantines. "What’s critical now is that we adopt a national framework for borders [within Australia]," he says. "A set of rules that reflects our confidence in the testing and tracing systems that have worked so well in New South Wales in particular, so that we’re not faced with borders slamming shut again." Qantas Group expects to increase domestic capacity to 68% of pre-Covid-19 levels for December and nearly 80% in the first quarter of 2021, compared with 20% for the July to September period and 40% for the current quarter. It also expects to maintain its current domestic market share of over 70%. The outlook is premised upon the assumption that international travel will only return after the first half of 2021, apart from an increase in trans-Tasman flying, and there are no material domestic border closures, subject to the availability of vaccines. On the other hand, international operations remain largely grounded, apart from repatriation services and limited trans-Tasman traffic under a one-way travel arrangement. Joyce states: “International travel is likely to be at a virtual standstill until at least July next year and it will take years to fully recover, which means we’re carrying the overhead for billions of dollars worth of aircraft in the meantime. We’re also facing a revenue drop of at least A$11 billion ($8 billion) this financial year alone compared to pre-Covid." The group had A$3.6 billion in available liquidity as at 30 November, comprising A$2.6 billion cash and a A$1 billion undrawn revolving credit facility, which is expected to be increased by A$500 million before year-end to provide additional standby liquidity. Since 30 June, Qantas has raised A$715 million of additional debt and A$1.4 billion from equity. Net debt has risen from A$4.7billion as at 30 June to A$5.9 billion as at 30 November, but it has no further material debts maturing until April 2022 and there are no financial covenants on the group's debt. Meanwhile, Qantas says its freight and loyalty divisions have performed strongly and along with the improving performance of its domestic network, has helped cover the group's overheads from its stranded costs in the international market. "We’re faced with carrying these assets [for international operations] until at least July next year before they start generating cash again," says Joyce. "We’ve have had to take on more than A$1.5 billion in additional debt to get through this crisis. We’ve lost A$11 billion revenue this financial year alone. Repairing our balance sheet is going to take a long time. And we know the domestic market is going to be very competitive." Qantas says its loyalty division continues to generate significant cash flow and has developed new ventures, while its freight division has performed "extremely well" due to the spike in e-commerce volumes across its domestic freighter network and higher yields on the international freighter network. The group has added cargo services between Los Angeles, Sydney and Hong Kong, while deploying several passenger aircraft to add cargo capacity. The freight division is also doing preliminary work on logistics for transporting Covid-19 vaccines at low temperatures. The group "is still a long way off anything approaching normal", Joyce says, but the outlook is a lot more positive than six months ago. “It’s unclear what shape the domestic economy will be in next year, particularly once broader government support winds back. Until a vaccine is rolled out, the risk of more outbreaks remains."

The US Federal Aviation Administration on 30 November issued the first Boeing 737 Max airworthiness certificate since the agency grounded the type in March 2019, the FAA confirms. Unlike type certificates, which apply to entire aircraft models, airworthiness certificates are the documents that clear specific aircraft to fly. Having lifted the Max’s grounding on 18 November, the agency is again clearing jets for flight – but only those that meet new airworthiness requirements. Boeing declines to comment about the milestone, deferring to the FAA. The FAA issues airworthiness certificates to newly manufactured jets prior to delivery to customers. Each of the roughly 450 Max in Boeing’s inventory need the certificates prior to delivery. Boeing produced, but did not deliver, those jets amid the 20-month grounding. The airframer has said it expects to deliver about half the 450 Max – some 225 – within one year. “We expect to have sufficient number of inspectors on hand to meet Boeing’s planned delivery schedule for the foreseeable future,” the FAA says. Previously delivered 737 Max – there are some 390 in airlines’ fleets – received their airworthiness certificates prior to the grounding. Those jets do not need new certificates but must also comply with new airworthiness requirements prior to being flown, the FAA says. Prior to the grounding, the Chicago-based airframer had issued airworthiness certificates itself, having been granted that authority by the FAA. But in November 2019, under intense critique for its approval of the Max design, the FAA said it had taken back that responsibility. In lifting the Max’s grounding, the FAA also released an airworthiness directive (AD) requiring all Max have updates prior to being flown. That AD requires flight control computers be modified in ways intended to prevent the type of circumstances that preceded two crashes that killed 346 people. The AD also requires that the jets’ horizontal stabiliser wires be separated to comply with FAA regulations.

Pakistan International Airlines (PIA) has issued a tender notice to dry lease up to eight narrow body aircraft, with the first example to be delivered at the start of next year. It intends to lease the aircraft, which it states should be of up to 2012-vintage, for a period of six years, or up to the aircraft’s first 12-year check. PIA has set the delivery schedule to run from January to December next year. The aircraft should also be configured with at least 170 seats in an all-economy layout, in addition to a soft divider after the first two rows. It is unclear if the aircraft is intended to replace its existing fleet of narrowbodies. PIA to have a fleet of 11 Airbus A320ceo aircraft, of which nine are currently in service. All 11 A320s, aged between 10 and 16 years old, are also leased aircraft.