The 10 new jets will allow Virgin to bounce back to 80 per cent of its pre-COVID domestic capacity by mid-June, the airline said, and increase its fleet from 58 jets to 68. Virgin operated 84 short-haul, long-haul and regional aircraft before its collapse last year.

Qantas said it would continue to prioritise cashflow over profit margin, signalling it will continue to stimulate travel demand with cheap airfares.

“We are still facing a massive financial loss this year, which will be the second one in a row. We’ve lost more than $11 billion in revenue since the pandemic started and that number will keep growing until international travel recovers.”

Qantas chief Alan Joyce

Qantas said all remaining domestic crew are now back at work, while thousands of international crew remain stood down waiting for the border to reopen. The group has laid off around 8500 employees since the start of the pandemic, or close to a third of its workforce.

The Qantas Group will make some unusual adjustments to its fleet to boost capacity from mid-2021. Jetstar will deploy up to five of its long-haul 787 Dreamliners on flights from Sydney and Melbourne to Cairns and the Gold Coast. And the airline confirmed it will bring back six Airbus A320s from its Jetstar Japan to fly in locally.

Qantas said it had seen “strong demand” for flights to New Zealand with a two-way “travel bubble” set to open on Monday, allowing quarantine-free travel between the two countries for the first time in over a year.

The airline is pushing ahead with plans to restart flights to the rest of its international network in late October, despite delays to Australia’s coronavirus vaccination program which was seen as crucial to restarting overseas travel.

Australia’s delayed vaccine rollout also extends the risk of further state border closures in response to local COVID-19 outbreaks, which have upended travel plans and shaken Australia’s confidence in booking interstate travel.

The lockdowns and border closures in response to the Sydney northern beaches outbreak prior to Christmas cost Qantas $400 million in lost earnings, but the airline said on Thursday that the pre-Easter Brisbane lockdown only cost it $29 million due to the “far more measured responses from various states”.

While the aviation market recovery was being driven by leisure travellers, Mr Joyce said the highly profitable corporate travel sector was growing every month and was currently at 65 per cent of pre-COVID levels.

“We are still facing a massive financial loss this year, which will be the second one in a row,” Mr Joyce said. “We’ve lost more than $11 billion in revenue since the pandemic started and that number will keep growing until international travel recovers.”