Qantas is hunkering down for a long winter, with the airline's CEO not ruling out the aviation crisis lasting another year. A challenge for Qantas boss, Alan Joyce, and airline bosses everywhere is the absence of a time frame. It is a quandary; something that Donald Rumsfeld called a "known unknown".

Strong cash reserves give Qantas some wiggle room

The Australian airline is better positioned than most to sit this crisis out. Qantas began 2020 with a diversified business and healthy cash reserves. Those cash reserves were further bolstered recently when the airline raised USD$650 against unencumbered aircraft. Qantas now has approximately USD$1.85 billion tucked away.

As Executive Traveller said yesterday, Alan Joyce views flexibility and agility as being key to survival.

“We have a range of options, to cut further and deeper, or to add capacity back,” Mr Joyce has said.

The Qantas boss has raised eyebrows in recent weeks with his survival of the fittest mindset, particularly when it comes to local competitor Virgin Australia. He blasted the airline for approaching the Australian government for emergency funding. Many saw his comments about a business in distress as crass. Many more recall when Mr Joyce stalked Canberra corridors seeking funding.

But these days, thanks to Alan Joyce's transformation program, Qantas is in much better shape. Two weeks ago, speaking to Leigh Sales on ABC's 7.30, he said;

"We are the healthiest airline in the world, we’ve got one of the best balance sheets, we’ve got a lot of liquidity. We’re making sure we have the dramatic action to allow us to survive for whatever length of time this virus issue is out there."

Qantas' position counters some analyst's predictions

The realities of Qantas' balance sheet counters claims made last month by the Centre for Asia-Pacific Aviation (CAPA) chairman Peter Harbison. He said;

“What I’m hearing is that the best-positioned airline in Asia has 30 days of cash left.

“You can’t emasculate a business by 70 or 80 percent for a period of weeks, in a cashflow business, and expect them to stay solvent. It’s as simple as that.”

But there are early signs these doomsday scenarios are overblown - at least for Qantas. Early indicators are Australia, with its tough border restrictions, quarantine, and a population largely toeing the line on self-isolation, is starting to see a decline in the pandemic's spread.

While the situation remains uncertain, international travel will remain in hiatus. But if Australia gets on top of the pandemic over the next month, domestic travel restrictions would likely be eased and Aussie's could start commuting again.

Domestic flying could restart again reasonably soon

While the glossy international routes get all the attention, the workhorse domestic routes, particularly those in the golden triangle in Australia's southeast, are the engine room of Qantas' revenues.

It isn't inconceivable that by the mid-southern hemisphere winter, domestic flying in Australia gets back to business. That would be great news for Qantas and a lifeline for Virgin Australia.

But Qantas will be taking a longer view when it comes to getting its A380s and 747s back onto international routes. Alan Joyce is prone to optimism in his public statements and it is important to distinguish between domestic and international flying. In terms of domestic flying on a Qantas aircraft, it could be sooner rather than later. When it comes to international flying, Mr Joyce's time frame of up to 12 months could be on the money.