Qantas reports £1.4bn loss as Australia shuts its borders
THE boss of Qantas is not expecting international travel to and from Australia to restart until mid-2021, after the airline sank to its first annual loss in six years.
Alan Joyce said routes to the US could stay closed for even longer and only open to overseas airlines once a vaccine has been developed and distributed. The government has said Australia will not reopen to foreign travellers until a vaccine is found.
Next year “is going to be another bad year – recovery will take time and it will be choppy”, Mr Joyce added.
Qantas sank to a A$2.7bn (£1.4bn) pre-tax loss, most of which reflected the costs of mothballing 100 aircraft and redundancy payouts following a “near-total collapse” in demand due to the pandemic. It suffered a $4bn hit to revenue from the crisis in the first half of the year. “We were on track for another profit above A$1bn when this crisis struck,” Mr Joyce said.
The airline managed a A$124m pretax profit on an underlying basis, down 91pc, due to a strong first half. Qantas said “fast action to radically cut costs and place much of the flying business into a form of hibernation” helped minimise the financial impact of the shutdown.
Despite the ongoing uncertainty, the airline said it remained “well positioned” to take advantage of the eventual return to air travel.
Qantas still plans to lay off 6,000 staff despite Australian airlines being given hundreds of millions of dollars in taxpayer cash to save the sector from collapse. Its main competitor, Virgin Australia, went into voluntary administration in April shortly after Australia closed its international borders and domestic travel plunged.
Virgin announced earlier this month it would close budget offshoot Tigerair Australia and lay off 3,000 staff as it prepared to relaunch under the new ownership of US private equity giant Bain Capital.
Australia, which has recorded just over 24,000 cases of coronavirus and 463 deaths, has limited the number of its own citizens who can return home from overseas in an attempt to stem the spread of the virus.
Alan Joyce, Qantas chief executive officer, doesn’t expect international travel to resume until mid-2021