Australian airline group Qantas has reported a statutory loss of A$2.7 billion (US$1.95 billion) for the 12 months to June 30 following "a near total collapse in travel demand" and a $4 billion drop in revenue in the second half due to the coronavirus and related border closures. The group doesn't expect international travel restrictions to ease to the point where operations can continue before July 2021, and domestic demand remains low, with only 20 percent of pre-Covid capacity scheduled for August.
CEO Alan Joyce said the second half of the fiscal year—the height of the crisis—"was the toughest set of conditions the carrier had faced in its 100 years". He claimed the company was "on track" to make another profit above $1 billion before the crisis hit. However, the group said it is in a good position to weather another predicted loss in FY21, with liquidity at $4.5 billion as of June 30, including $1 billion of undrawn facilities.
Joyce commented: "The impact of Covid on all airlines is clear. It's devastating and it will be a question of survival for many. 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.
"Covid is reshaping the competitive landscape and that presents and mix of challenges and opportunities for us. Most airlines will come through this crisis a lot leaner, which means we have to reinvent how we run parts of our business to succeed in a changed market."
Qantas is planning to finalize around 4,000 of "at least" 6,000 redundancies by the end of September and will continue to stand down around 20,000 employees until demand returns. The group has retired its Boeing 747 fleet ahead of schedule and has more than 100 aircraft in storage.
During the crisis, Qantas said it has collected around $267 million in JobKeeper payments from the Australian government, most of which was paid to employees on furlough and the rest of which was used to subsidize the wages of those still working. Up to June 30, the group said it has received $515 million in government support with a net benefit after the cost of operating flights equating to $15 million. Support to be provided in FY21 will depend on the group's flying activity, according to Qantas.
Joyce added: "Recovery will take time and it will be choppy. We've already had setbacks with borders reopening 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. That means we can get more of our people back to work."