Qantas says demand for bubble-free transtasman travel from Monday has been "strong" and it has plans to add more flights next months.
The company said Qantas and Jetstar have seen strong demand since the two-way transtasman bubble was announced with tens of thousands of bookings made in the first few days.
The rate of Frequent Flyers using Qantas Points to book seats on the Tasman was 80 times higher than normal for the first four hours for the airline that said when quarantine-free travel was announced that it would fly up to 83 per cent of pre-Covid capacity.
"Flight bookings for the first few weeks of travel are stronger out of Australia than New Zealand, with capacity reduced to reflect demand patterns seen during the short two-week booking period," the airline said.
From late-May, Qantas has added more flights to fill gaps left in the market and meet expected demand over the ski season.
''The two-way bubble with New Zealand is great news for the tourism sector as a whole. It means we can bring other parts of our business out of hibernation,'' said group chief executive Alan Joyce.
"The increased [Australian] domestic flying and resumption of flights across the Tasman are also helping get more of our people back to work."
Joyce said it was important to keep this uptick in perspective.
"We are still facing a massive financial loss this year, which will be the second one in a row. We've lost more than A$11 billion in revenue since the pandemic started and that number will keep growing until international travel recovers."
While vaccinations are not a requirement for transtasman flying, Joyce said the vaccination programme was key to restarting other international fights.
"While there have clearly been some speed bumps with the vaccine rollout, we are still planning for international flights to resume in late October. We remain in regular dialogue with the Government," he said at an event in Sydney to mark the reopening of international lounges.
Qantas had the flexibility to bring forward, push back or stagger the resumption of its international flights to align with any updates to the Australian Government's Covid-19 vaccine rollout timeline or approach to international travel.
The group is heavily dependent on its domestic operations and said while snap lockdowns had harmed it, demand for leisure travel within Australia was extremely strong, helped by a Government subsidy scheme, and 90 per cent of its corporate travel had returned.
It would return capacity to 90 per cent ahead of schedule, provided there were no more border closures.
In an update the company said its short-term strategy remains generating positive cashflow rather than returning to pre-Covid profit margins – meaning the positive impact on 2021 earnings from this increased activity would be relatively small.
In turn, this means even more low fares that will continue to stimulate demand.
Because it could use aircraft that were no longer flying overseas, the group could increase domestic capacity beyond pre-Covid levels next financial year.
During the fourth quarter of this financial year, 90 per cent of the group's aircraft will be active, compared with just 25 per cent at the height of the national lockdown in mid-2020.
Some aircraft which operate international flights including the entire A380 fleet (which are in long-term storage) and some Airbus A330s and Jetstar 787-8s, have not resumed flying.
All Qantas' 787-9s have been reactivated and are operating repatriation flights on behalf of the Australian Government and some freight-only services.
Its international "First" lounges in Sydney and Melbourne along with its Premium Lounge in Brisbane will reopen from next Monday to coincide with the transtasman travel bubble.
These lounges have been closed for more than a year.