‘We’re an airline that can’t really fly’: Qantas has reported a full-year loss of $1.96 billion, as COVID-19 continues to slam the airline industry

Qantas CEO Alan Joyce is running a largely grounded airline. (David Gray, Getty Images)
  • Qantas has reported a statutory loss of $1.96 billion for the last financial year.
  • CEO Alan Joyce lamented the fact that, despite a strong first half year, the global pandemic had meant the airline “can’t really fly to many places”.
  • He claimed that the COVID-19 pandemic had punched a $4 billion hole in revenue.
  • Visit Business Insider Australia’s homepage for more stories.

Qantas CEO Alan Joyce did not mince his words as he lamented the full impact the pandemic had had on the airline.

Presenting Qantas’ full-year results on Thursday, Joyce began his address by recognising the elephant in the room that had created “the worst trading conditions in our 100 history.”

“To put it simply, we’re an airline that can’t really fly to many places – at least for now,” he told investors.

“The impact of that is clear. COVID punched a $4 billion hole in our revenue and a $1.2 billion hole in our underlying profit in what would have otherwise been another very strong result.”

Of all the companies lining up to announce their full-year results this month, Qantas’ was always going to be among the most brutal.

Not only did the pandemic ground its international fleet, but it has limited both domestic demand and Qantas’ own capacity amid ever-changing state border restrictions, causing more than a few headaches.

It made for an interesting set of numbers on Thursday.

For example, coming with just three months left of the financial year, the Australian airline still managed to etch out a $124 million profit before tax. The result was credited to an $800 million first half result, Qantas bringing the airline to an almost immediate halt as well as federal government support, including JobKeeper subsidies.

Even that, however, was a small bright spot in an otherwise unsurprisingly grim set of numbers once you take away one-off losses. You can subtract for example $1.4 billion as a write-down of the Qantas fleet “which reflects that these aircraft will be on the ground for years”, as well as $600 million in redundancies and other restructuring costs.

In total, one in five workers lost their jobs during the pandemic with that number spiking to one in four at the management level. They were amongst the 25,000 workers who were stood down on the start pandemic.

All that boils down to a statutory loss, not a profit, of $1.96 billion after tax.

It’s an eye-watering sum with likely little upside the next 12 months as travel restrictions persist in some form or another. Joyce for his part appeared to rally for some reform on that front.

“Just as we thought domestic flying was in recovery mode, we’ve been hit by another set of border closures. IT shows how important it is to have a national framework for domestic borders — so that there is clarity and consistency,” he said.

The airline has however unveiled a three-year recovery plan that will save the airline $15 billion, which includes 20,000 employees remaining stood down and in limbo.

“That’s achieved by hard decisions like job losses and ongoing stand-down of our people because of less flying, as well as fuel savings and lower maintenance costs from putting aircraft into hibernation,” Joyce said.

While operating on a heavily limited basis, Joyce emphasised that “simply getting smaller isn’t going to define success in a post-COVID world”, flagging there would be more to come on the matter of “reinvention”.

Despite the struggles Qantas faces, however, Virgin Australia’s collapse into administration shows things could always be worse.