Border drama: Qantas (ASX:QAN) faces continued challenges on 'kangaroo route'

Here's the latest news from the iconic airline.

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Key points

  • The Qantas share price is currently 1.5% lower, trading at $5.23
  • It follows the airline's announcement its twice-daily Australia to London flights will be re-routed via Darwin instead of Perth until at least mid-June
  • The Western Australian capital was set to retake its title as home of the iconic route from April

The Qantas Airways Limited (ASX: QAN) share price is in the red today amid news the airline will continue to operate its iconic 'kangaroo route' via Darwin rather than Perth.

The direct service between Australia and London will fly from Darwin until at least mid-June as Western Australia's border uncertainty continues.

At the time of writing, the Qantas share price is $5.23, 1.51% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.28%.

Qantas delays Perth to London flight

The Qantas share price is slipping amid news the airline has opted against restarting its direct Perth to London route.

The landmark flight — one of the longest in the world — was meant to revert to taking off from Australia's westernmost capital in April.

However, the airline will instead continue to operate the flight from Darwin until at least June, as it has been doing since international travel recommenced last November.

The airline broke news of the delayed re-start hours before Western Australia premier Mark McGowan stated he will be making an announcement regarding the state's borders later this month, according to the ABC.

It follows the premier's earlier decision to delay the state's reopening – originally scheduled for 5 February – indefinitely earlier this month.

As readers might have heard, Qantas boss Alan Joyce reportedly recently compared Western Australia's border policy to that of North Korea.

Qantas is also choosing to stop over in the Top End to "streamline transit arrangement" for travellers from Sydney, rather than using traditional stopover destination, Singapore.

Joyce today said:

This extension through to at least mid-June means the Top End has several months to properly leverage the opening up of Australia's borders to all tourists. It's a great opportunity to encourage thousands of visitors to stop off in Darwin to see what the NT has to offer.

Qantas to build jet base in Darwin

In more Top End tourism news, Qantas has announced it will be building a new jet base in the territory's capital.

The base will service at least 4 E190 jets servicing QantasLink routes and a new commercial route between Darwin and Dili, made possible by Qantas' deal with Alliance Aviation Services Ltd (ASX: AQZ).

The planes will also see Qantas able to open routes that would be unserviceable with larger aircraft. These include flights between Darwin and Canberra, Cairns, and Townsville.

On the new jet base, Joyce commented:

Basing these aircraft in Darwin means securing more jobs and a stronger local aviation industry.

As we prepare to welcome back international visitors, the E190s will make it easier to fly directly between Darwin and other popular tourist destinations including Alice Springs for central Australia, encouraging travellers to see more of Australia.

In other airline news, new budget carrier Bonza today revealed it will fly 25 routes to 16 destinations around Australia. Bonza is due to begin flying in October.

Qantas share price snapshot

The Qantas share price has often been turbulent throughout the pandemic. However, it's outperforming the ASX 200 in 2022.

The airline's stock has gained 1.75% year to date. Meanwhile, the index has slipped 4.8%.

Qantas shares are also currently trading for 14% higher than they were this time last year. For comparison, the ASX 200 is 5.2% higher than it was 12 months ago.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Alliance Aviation Services Ltd. The Motley Fool Australia owns and has recommended Alliance Aviation Services Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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