Qantas has reported a $1.28 billion underlying loss for the first half as lockdowns and travel restrictions saw flights during the period fall to just 18 per cent of pre-COVID levels.
The airline posted an underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of $245 million and forecast that Omicron would have a negative impact of approximately $650 million on its results in the second half.
“Most of Australia was in lockdown for several months of the first half, so the loss we’ve announced today isn’t surprising but it is frustrating,” said Qantas CEO Alan Joyce.
“We saw a sharp rebound in travel demand when borders started opening in November, only to be hit by the Omicron wave and all the uncertainty that came with it.”
While the airline’s losses widened compared to the $1.01 billion loss reported a year earlier, it said that a number of tailwinds had accelerated its balance sheet repair during the period.
These include the $802 million sale of surplus land at Mascot in Sydney, a rush of bookings following the end of Delta lockdowns and the easing of international border closures towards the end of 2021.
“The uncertainty carried over into January but demand has started to recover as Australia adjusts to truly living with COVID,” said Mr Joyce.
“Our frequent flyer surveys show the intent to travel is extremely high and we’re seeing good leisure demand into the fourth quarter. We’ve also seen a sharp uptick in international ticket sales in the past few weeks.”
Revenue during the half rose 31.9 per cent to $3.07 billion but Qantas said that revenue losses since the start of the pandemic had now surpassed $22 billion.
The airline’s domestic operations recorded an underlying EBITDA loss of $388 million while 92 per cent of the domestic flights were cash positive due to “careful management of capacity”.
Meanwhile, its international and freight operations posted an underlying EBITDA of $89 million as record performance for freight offset losses for international flying.
“We’re very conscious of the support and patience shown by customers and shareholders as we all wait for travel conditions to stabilise. In the meantime, we’ve done a lot of work to put this company in the best possible position to deliver,” Mr Joyce said.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
