Qantas shares jumped 4.5% to $5.265 at one stage on Thursday after the airline announced it was aiming for an October resumption of international flights after first establishing a travel bubble with NZ of its own in July.
That’s after the airline revealed what was always going to be a thumping great loss for the half year to December.
Qantas said its statutory loss before tax was $1.47 billion. This included further redundancy and restructuring costs of $284 million (in addition to the $642 million provided for in 2020 financial year) and a further $71 million write down of the A380 fleet in-line with its Australian dollar market value.
The underlying loss $1.08 billion loss in the six months to December 31 and all thanks to the impact of COVID.
Revenue fell 75% to $2.3 billion as passenger numbers fell 83%
There is of course no dividend.
These figures are stark but not surprising,” Qantas chief executive Alan Joyce said in a statement with the results.
“During the half we saw the second wave in Victoria and the strictest domestic travel restrictions since the pandemic began. Virtually all of our international flying and 70 per cent of domestic flying stopped, and with it went three-quarters of our revenue.”
Qantas’s optimism about the resumption of international travel spilled over into the rest of the sector.
Shares in Qantas were last up 1.8% at $5.10, and went as high as $5.265. The shares are up 15% in February with just one day of trading to go as hopes mount that the rollout of the coronavirus vaccine will soon open up international borders here and offshore.
Air New Zealand shares rose 2.7% to $1.50 after it reported domestic flying remained at 76% of pre-Covid levels for the half. That is well above Australia’s domestic market which was flying at only 40% capacity in December.
Air New Zealand has reported a $NZ104 million ($A97 million) half-year loss for the six months to the end of December and is looking to wrap up its refinancing deal with the government as quickly as it can.
The loss was of course always coming and was a big slide from the $139 million profit in the December half of 2019.
On an underlying basis, stripping out a $NZ81 million gain from other significant items including foreign exchange gains on uncovered debt, the loss was $NZ185 million compared to a $NZ198 million profit in the prior period.
Revenue fell 59% to $NZ1.2 billion in the six months to December 31, with the airline’s flying cut by 65%.
Shares in Flight Centre were up 8.8% at $17.79, after reporting a completely understandable first-half a loss of $233.5 million and no interim dividend. The shares are up 26% so far this month.
Flight Centre could not provide any guidance on Thursday though it was optimistic about the domestic market in the near term and has boosted its liquidity to make sure it can get through the next few months.
Helloworld (which reported a loss earlier this week) saw its shares add 10% to $2.54 for a 20% gain in February. Webjet turned in a loss for the December half and saw its shares rise 4.3% on Thursday to $5.74 and have risen 20% for the month.
Corporate Travel shares edged up 1.5% to $20.99 and are up by more than a quarter this month.
Rex shares though were up 2.1% at $1.67. The good news from Qantas is bad news for Rex, and its ambitions on the Australian domestic routes.
………….
In his comments on the result and the outlook for the sector, Mr Joyce warned that abolishing the JobKeeper payment could very well hit thousands of people in Qantas whose jobs are on the chopping block.
He said Sydney after the release of the results that more than 7,000 international flight workers were at “prime risk” of losing their jobs within the airline while uncertainty surrounded the opening of borders.
“The prime issue is going to be around 7,500 people that are fully dedicated to international — they will have no work,” Mr Joyce said.
“Through no fault of theirs, (these workers) are going to be without the income that they built their lives on for a period of time without those borders opening up.”
Mr Joyce that while aviation sector had other ongoing financial support; the JobKeeper scheme helped keep employees connected to their workplace and its potential ending will come before the airline is able to resume some form of normal operating conditions later in the year.
Qantas is also expecting international travel to resume by October, in line with the nation’s scheduled vaccine rollout.
The airline intends to resume all international routes except for three – New York City, Santiago(Chile) and Osaka (Japan).
Mr Joyce warned continuing the system of hotel quarantine systems for overseas travellers beyond the population being mass vaccinated and the easing of international borders would be a “big blockage” to Qantas and other airlines being able to generate revenue.
