About 2500 frontline Qantas and Jetstar staff have been stood down for an estimated two months as travel around Australia plunges due to Covid-19 outbreaks.
The airline says it is not expecting Sydney to open up for two months and the challenge to resume international flying resumed.
Capacity has been slashed across the Tasman with the bubble pause and Qantas Group chief executive Alan Joyce said domestic flying which had been running close to pre-pandemic levels was down to 40 per cent of normal following outbreaks in New South Wales and other states.
Air New Zealand said to date it had not stood any staff down due to the transtasman bubble closing.
''Our A320 crew who operate quarantine free travel on the Tasman also work across our domestic network which is currently operating at above pre-Covid-19 levels,'' said a spokeswoman.
During the past two weeks up to half the Australian population has been under lockdown.
He said while there were no job losses expected, the decision today would directly impact domestic pilots, cabin crew and airport workers, mostly in New South Wales but also in other states given the nature of airline networks.
Staff will be given two weeks' notice before the stand-down takes effect, with pay continuing until mid-August.
''This is clearly the last thing we want to do, but we're now faced with an extended period of reduced flying and that means no work for a number of our people,'' he said.
The airline had absorbed a significant amount of cost since these recent lockdowns started and continued paying staff their full rosters despite thousands of cancelled flights.
"Hopefully, once other states open back up to South Australia and Victoria in the next week or so, and the current outbreak in Brisbane is brought under control, our domestic flying will come back to around 50 to 60 per cent of normal levels,'' said Joyce.
Income support in the form of government disaster payments would be key to helping eligible employees get through this ''challenging period'' and Qantas welcomed the targeted Federal Government support offered for those stood down outside of declared hotspots and to retain domestic aviation capability.
Joyce said the difficult decision to trigger stand-downs reflected the reality confronting many businesses operating in New South Wales.
"Based on current case numbers, it's reasonable to assume that Sydney's borders will be closed for at least another two months. We know it will take a few weeks once the outbreak is under control before other states open to New South Wales and normal travel can resume.''
However, travel could resume quickly.
"Fortunately, we know that once borders do reopen, travel is at the top of people's list and flying tends to come back quickly, so we can get our employees back to work.
"This time last year when we had more than 20,000 employees were stood down and most of our aircraft in hibernation for months on end."
Joyce said the vaccine rollout mean the end was in sight and the concept of lockdowns will be a thing of the past.
He urged Australians to get vaccinated.
"The challenge around opening international borders remains. There are still several thousand Qantas and Jetstar crew who normally fly internationally and who have been on long periods of stand down since the pandemic began,'' he said.
''Higher vaccination rates are also key to being able to fly overseas again, and finally getting all our people back to work."
While Australian domestic travel has plummeted in the United States air travel is hitting new pandemic-era highs, and airlines are scrambling to keep up with the summer-vacation crowds.
Despite rising numbers of coronavirus infections fueled by the delta variant, the Associated Press reports the US set another recent high mark for air travel on Sunday, with more than 2.2 million people going through airport checkpoints.
That is nearly 11,000 more people screened than July 18, and the highest number since February 28, 2020, before the US felt the full brunt of the pandemic.
However, air travel was still down 17 per cent this past Sunday from the same Sunday in 2019.