Qantas big loss was probably the most expected result for the June 30 financial year thanks to the impact of COVID-19, the lockdowns and border closures, and well-paced trading updates from the airline’s board and management.
As expected Qantas reported a $2.7 billion full-year loss after the COVID-19 pandemic forced it to ground most of its aircraft and stop flying internationally.
The net loss was driven by a $1.4 billion non-cash write-down to assets including its fleet of Airbus A380s and $642 million in redundancy and other restructuring costs.
Qantas reported an underlying profit, which excludes those one-off costs, of $124 million, down 91% from last year and almost wholly from the $500 million first-half result.
There is no final dividend but shareholders did get the 13.5 cents a share first-half dividend which was delayed by a month or so.
“The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many,” CEO Alan Joyce said in prepared comments on Thursday.
“What makes Qantas different is that we entered this crisis with a strong balance sheet and we moved fast to put ourselves in a good position to wait for the recovery.”
Mr. Joyce said Qantas was on track for a full-year profit of more than $1 billion when the COVID-19 crisis struck, and the fact that it still delivered an underlying profit showed how quickly it adjusted to the collapse in revenue.
“Recovery will take time and it will be choppy,” he said. “We’ve already had setbacks with borders opening and then closing again. But we know that travel is at the top of people’s wish lists and that demand will return as soon as restrictions lift.”
Qantas said revenue between April and the end of June fell 82%, pushing revenue for 2019-20 down 14% to $14.2 billion.
In June, Qantas said it would axe 6,000 jobs, or around 20% of its workforce; retire its remaining 747s ahead of schedule and mothball most of its international aircraft for 12 months in an effort to cut costs. The airline is currently flying around 20% of its pre-COVID domestic capacity.
Around 20,000 Qantas staff remain stood-down from work, from a pre-COVID workforce of 29,000.
Qantas said it collected $267 million in payments through the JobKeeper scheme, with the most going to stood down workers and the rest used to subsidise the wages of staff continuing to work.
Qantas said it still has liquidity of $4.5 billion which it says is “providing considerable buffer to manage uncertainty.” It will have to last another year to 15 months.
“Despite significant uncertainty across most markets, the Group remains well-positioned to take advantage of the eventual return of domestic and, ultimately, international travel demand. Mid 2021 is the best date the airline reckons when flying will return.
“In the meantime, Qantas Freight and Qantas Loyalty continue to generate significant cash flow and charter operations for the resources sector are performing strongly,” directors said yesterday.
Qantas shares ended the day steady at $3.76.
