Qantas Sees International Service Grounded until July 2021

 - August 20, 2020, 10:09 AM
Qantas will likely not press its Boeing 787s into international service until the middle of next year. (Photo: Qantas)

Qantas expects the majority of its international capacity to remain grounded until the middle of next year as the airline grapples with persisting border restrictions and quarantine requirements due to Covid-19, Qantas Group CEO Alan Joyce said during the company’s year-end earnings webcast for fiscal year 2020. The projection came as the company reported a A$4 billion ($2.9 billion) drop in revenue during the second half of its fiscal year ending on June 30, and a A$2.7 billion loss before tax for the entire year, due mostly to a A$1.4 billion non-cash write-down of assets including the A380 fleet and A$642 million in one-off redundancy and other costs as part of restructuring the business for recovery. Still, the company managed to register an underlying profit for the fiscal year of A$124 million, amounting to a 91 percent decline from the previous year.

“International destinations are still unlikely to open until July 2021, with the possibility of an earlier restart for our trans-Tasman routes,” said Joyce, who called the conditions in the second half of FY20 the toughest the carrier has faced in its 100-year history.

“Recovery will take time and it will be choppy,” he added. “We’ve already had setbacks with borders opening 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.” Qantas has cut 6,000 employees, or about 20 percent of its workforce, since the onset of the Covid-19 crisis and expects to “stand down” 20,000 more until work returns.

Joyce said the FY20 result showed how the Covid crisis had derailed what would have been a strong financial performance.

“We were on track for another profit above $1 billion when this crisis struck,” he explained. “The fact that we still delivered a full-year underlying profit shows how quickly we adjusted when revenue collapsed.”