‘It’s a question of survival for many’, warns Qantas as Covid ravages profits

Tuesday, 20 Aug, 2020 0

Qantas has become the latest airline to lay bare the massive costs of Covid after posting a $2.7 billion loss in the year to June 30.

The Australian flag carrier, in its 100^th year of operation, reported a ‘near total collapse in travel demand’ in the second half, losing $4b in revenue.

It also warrned that its international network was not expected to restart untl mid-2021.

It was now a ‘question of survival’ for many airlines, its Chief Executive Alan Joyce said, with recovery expected to be slow and ‘choppy’.

The loss includes a $1.4b non-cash write down of its assets, including the A380 aircraft.

Underlying pre-tax profits hit $124 million.

Joyce said it was facing the toughest conditions in its 100-year-history.

"The impact of Covid on all airlines is clear. It is devastating and it will be a question of survival for many," he said. "We’ve had to make some very tough decisions in the past few months to guarantee our future. At least 6000 of our people will leave the business through no fault of their own and thousands more will be stood down for a long time.

"Recovery will take time and it will be choppy. We’ve already had setbacks with [domestic] borders opening and closing again."

On an optimistic note, he added: "We know that travel is at the top of people’s wish lists and that demand will return as soon as restrictions lift."

He said Qantas had a strong balance sheet and ‘moved fast to put ourselves in a good position to wait for the recovery’.

Australia has one of the world’s most restrictive travel bans with citizens needing special permission to leave the country.

The government has already suggested its international borders will remain closed for the remainder of 2020 and into 2021.

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