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Australia aviation competition gearing up: Can everyone survive?

George Woods:

Thank you, Rod. That’s a good point to finish. We’ve got a couple of minutes to go. I might just each ask you to, and there’s no skin on this one, but just maybe to get your crystal balls out. What’s your prediction between 12, 18 months’ time, where we’ll be? Cameron.

Cameron McDonald:

Thanks, George. First of all, let me also just clarify my earlier comments about competition. That was competition. Yeah, that pricing benefit was if there was lack of competition on either front, so it wasn’t specific to one airline or another, but clearly competition does benefit the consumer. So, where are we going to be in 12 or 18 months?

George Woods:

One sentence, give us a quick version.

Cameron McDonald:

Look, I’d say, whatever you think it is right now, it will be different. The aviation industry just moved so quickly. This time last year we were overseas in Hawaii. We’d never even heard of a pandemic. And then all of a sudden, we got back, and we probably only just missed being locked out. Things could be really much better if the vaccines are highly effective. But on the flip side as well, we could quite quickly go into another lockdown scenario as we go through the winter period here in the Southern hemisphere and the virus gets out of control again. So I think, whatever you think it is right now, I think you need to think what is the opposite and what are your plans for that in case that is the actual eventuality.

George Woods:

Thank you, Cameron. Rod or Ann, is there anything else you’d like to add? I think Cameron has covered everything. Should we add on to that?

Anna Wilson:

I agree with him, who knows. But I guess consumers or passengers will have been benefiting or starting to take up some of the benefit of low fares. I think that might happen or starting to get confidence in travel again. And I think from an airline perspective, I think the thing that they’ll be doing in 12 to 18 months is trying to figure out all the operational challenges that are building up behind the scenes. How do we get enough pilots that haven’t been through the simulator and have de-registered essentially, or moved into other professions? How do we restructure our routes again? I think that those operational challenges will be fun to find.

George Woods:

Thanks Ann. Rod, any last words from you?

Rod Sims:

Look, clearly the next 12 months are going to be highly uncertain, and as Cameron and Anna, and I’ll say anyone who tries to predict that, no, can’t do it. But I think beyond that, the airline industry will recover. The vaccine will have an effect. So I think if you look beyond 12 months, we’ll get a very strong domesticated aviation industry again. That’s what Australia depends on. How much virtual meetings replace business meetings, I don’t know. But I think I’m a little bit on Anna’s side that it might be down a bit, but I think we’ll be surprised at how quickly things do get back to normal. After all, this is a pandemic, and what level we’ve got the pandemic, we’re in chaos. Once the pandemic is under control, and I think that’ll take a hell of a long time internationally, but once it’s under control in Australia, I think things will get back to normal faster than people think. And we’ll have a strong domestic aviation industry, hopefully, potentially with three players.