Qantas books loss of nearly €1.2bn due to Covid-19 effect

Australia's Qantas Airways said state border closures were severely hampering a recovery in the domestic aviation market, which, alongside its lack of international flying, would lead to a significant loss this financial year.

The airline on Thursday posted a full-year net loss of A$1.964 billion (€1.19 billion) for the 12 months that ended June 30th, one of its largest ever, driven by impairment charges and restructuring costs meant to help it weather the coronavirus pandemic.

Chief executive Alan Joyce said trading conditions were the worst in the airline's 100-year history and that a national framework on when states could open borders was needed to boost domestic flying.

He said it made sense to lock down in Victoria, which has the nation's highest case count, but not to ban travel between places like Western Australia and South Australia, which are reporting no community tranmission of Covid-19.

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“We’re not saying, ‘open the borders’ blankly,” said Mr Joyce. “We’re saying, ‘let’s have the rules to say what would you have to see in order for those borders to be open.’ ”

The airline is running only 20 per cent of its usual domestic schedule in August, but he said that could increase to more than 75 per cent if all state borders reopened before international ones.

Most international flying is unlikely to resume until a vaccine is widely distributed, which might occur in mid- to late 2021, said Mr Joyce.

Airbus fleet in Mojave desert

Qantas took about A$2.8 billion worth of one-off charges alongside its results, which included a write-down of A$1.4 billion on its Airbus SE A380 fleet, which is parked in the Mojave desert.

Its biggest-ever net loss was A$2.84 billion in 2014, which prompted big cost cuts and led to strong annual profits of about A$900 million for four years before the pandemic.

“We were on track for another profit above A$1 billion when this crisis struck,” said Mr Joyce.

The carrier’s A$124 million underlying pretax profit in the 12 months ended June 30th, its most-watched financial figure, was well above the A$6.5 million average profit expected by 11 analysts polled by Refinitiv. That was due mostly to a strong first half before the pandemic hit.

The airline in June raised more than A$1.4 billion from institutional and retail shareholders to help it weather the pandemic and announced plans to cut at least 20 per cent of its staff, equating to 6,000 jobs. – Reuters