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Qantas Posts Huge Losses Ahead of Restart

Qantas Posts Huge Losses Ahead of Restart

Qantas has posted an AUS$2.3 billion (€1.4 billion) full-year loss for 2021 due to the pandemic, but says it has started 2022 in a “fundamentally better position” than a year ago.

Total revenue lost due to Covid-19 amounted to AUS$16 billion (€9.8 billion).

However, the Australia carrier says that periods of open domestic borders in the second half saw significant cash generation by Qantas and Jetstar, which helped the Group to reduce net debt from $6.4 billion (€3.9 billion) in February 2021 down to $5.9 billion (€3.6 billion) by the end of June.

Throughout the year, cash flow was underpinned by continued strong performance by Qantas Loyalty and significantly higher international yields for Qantas Freight.

Qantas Group CEO Alan Joyce said: “This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier. The trading conditions have frankly been diabolical.

“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue,” he added.

Restart Strategy

Qantas today also outlined preparations for restarting its international flights, with plans linked to the vaccine rollout in Australia and key overseas markets.

On current projections Australia is expected to reach National Cabinet’s ‘Phase C’ vaccination threshold of 80 per cent in December 2021, which would trigger the gradual reopening of international borders.

Similarly, key markets like the UK, North America and parts of Asia have high and increasing levels of vaccination.

This creates a range of potential travel options that Qantas and Jetstar are now preparing for.

SUMMARY OF INTERNATIONAL RESTART PLANS

  • From mid-December 2021, flights would start from Australia to COVID-safe destinations, which are likely to include Singapore, the United States, Japan, United Kingdom and Canada using Boeing 787s, Airbus A330s, and 737s and A320s for services to Fiji.
  • Flights between Australia and New Zealand will be on sale for travel from mid-December 2021 on the assumption some or all parts of the two-way bubble will restart.
  • Qantas’ ability to fly non-stop between Australia and London is expected to be in even higher demand post-COVID. The airline is investigating using Darwin as a transit point, which has been Qantas’ main entry for repatriation flights, as an alternative (or in addition) to its existing Perth hub given conservative border policies in Western Australia. Discussions on this option are continuing.
  • Five A380s will return to service ahead of schedule. These would fly between Sydney and LA from July 2022, and between Sydney and London (via Singapore) from November 2022. The A380s work well
    on these long-haul routes when there’s sufficient demand, and the high vaccination rates in both markets would underpin this.
  • Qantas will extend the range of its A330-200 aircraft to operate some trans-Pacific routes such as Brisbane-Los Angeles and Brisbane-San Francisco. This involves some technical changes that are now being finalised with Airbus.
  • Flights to Hong Kong will restart in February and the rest of the Qantas and Jetstar international network is planned to open up from April 2022, with capacity increasing gradually.
  • Qantas to take delivery of three 787-9s (new aircraft that have been in storage with Boeing) during FY23 to operate additional flights to key markets as demand increases.
  • Jetstar to take delivery of its first three Airbus A321neo LR aircraft from early FY23, the extended range of which will free up some of its 787s to be redeployed on other markets.

 

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Fionn Davenport is the editor-in-chief of the ITTN group, including ITTN and ITTN Ireland. He's one of Ireland's best-known travel journalists and writers, with nearly 30 years' experience writing guidebooks for Lonely Planet and others.

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