Qantas has postponed its planned resumption of international flights until late December after the federal budget dealt a blow to its plans.
The airline was due to restart services at the end of October but on Wednesday pushed back the date after the government revised forecasts for overseas travel.
Treasury expects international travel to remain low through to mid-2022 before a gradual recovery in international tourism.
Qantas believes the new assumption would ready the company to take advantage of tourism and trade in a post-coronavirus world.
“We remain optimistic that additional bubbles will open once Australia’s vaccine rollout is complete to countries who, by then, are in a similar position, but it’s difficult to predict which ones at this stage,” it said in a statement.
Qantas said it would continue providing repatriation services and looked to the resurgence of domestic travel as the most important element of the group’s recovery”.
The airline will continue providing repatriation and freight flights from overseas.
Customers who booked international tickets for travel between October and December will be contacted by Qantas.
Tuesday night’s federal budget indicated the international border was expected to remain closed until mid-2022 and a quarantine program would remain in place, limiting overseas arrivals.
Some international travel may begin sooner, but the budget papers imply a gap between when borders fully reopen and when all Australians have access to COVID-19 vaccines.
Treasurer Josh Frydenberg stressed the border timeline was his department’s assumptions rather than government policy.
“We will open the international borders when it’s safe to do so,” he told the National Press Club.
“We cannot afford to take the risk right now to open our borders in a way that would compromise the health of Australians.”
He said small cohorts of international students were expected to arrive from the end of this year before borders gradually open from mid-next year.
On Monday, Deputy Prime Minister Michael McCormack said he believed airlines would understand why the government was keeping international borders closed.
“We’re taking the best possible medical advice. I speak to [Qantas chief executive Alan Joyce] most weeks,” he said.
“He understands that it’s important to keep Australia as COVID safe and free as we can, and that’s what we’re doing as a government.”
The company says it will keep reviewing its plans in the lead up to December.
Qantas says its announcement does not affect its flights to New Zealand, which restarted with the launch of the trans-Tasman bubble.