None of this has been captured in the results Virgin has just reported, instead they will fall into the current financial year – and unsurprisingly, there are no forecasts for how the financial year 2022 will shape up.
“It is unclear what the ongoing implications from COVID-19 will be for the Group’s results in future financial years”, the airline’s accounts noted.
Virgin Australia’s directors signed off on the accounts for the year to June 30, 2021 mid-November, less than two weeks ago, and they should have been feeling pretty upbeat about the airline’s prospects.
The route between Sydney and Melbourne had been reopened and all but West Australia and Tasmania had signed up for a national plan to open borders once vaccination rates had hit 80 per cent.
But this week, the new Omicron variant emerged to introduce new uncertainty into the airline travel equation and the broader economy’s recovery.
At this stage the states are holding firm on their road map to reopening and while the federal government has responded by pausing the further opening of international borders.
Many countries have banned travel to and from southern Africa.Credit:Bloomberg
That said, little is understood yet about Omicron, it’s transmissibility or the protection afforded from the current vaccines. But the emergence of the new COVID strain underlines the clear possibility that this virus is going to be a long-running issue.
Even if domestic borders remain open the ongoing anxiety surrounding the virus could impact willingness to travel.
The strong bounce back airlines experienced after the first wave may not be repeated. At this stage Virgin said it anticipates a swift and significant ramp up in demand as border restrictions ease.
It stands to reason that the return of international tourism will be more muted in 2022 than previously anticipated – as passengers worry about being locked out of their country or be required to quarantine. However, this shouldn’t have a particularly large impact on Virgin which is ostensibly a domestic airline.
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