Qantas Airways delayed plans to restart most international flights by four months until late October, in line with the country's vaccination programme completion, after swinging to a first-half loss due to Covid-19 travel restrictions.
The carrier posted an underlying loss before tax of A$1.03 billion ($820.4 millon) in the six months ended December 31, compared to a profit of A$771m a year earlier, it said in a statement on Thursday. Half-year revenue dropped 75 per cent year-on-year to A$2.33bn.
"These figures are stark, but they won’t come as a surprise," Alan Joyce, Qantas group chief executive, said. "Border closures meant we lost virtually 100 per cent of our international flying and 70 per cent of our domestic flying."
The Covid-19 pandemic has ripped through the aviation industry in an unprecedented manner. The outlook for global airlines is deteriorating as governments impose tighter lockdowns to curb an increase in infection rates and new virus variants, the industry's main lobby group said.
Qantas said it has a high level of liquidity because of cost-cutting measures and raising debt and equity, giving it "breathing room" to deal with uncertainty and funding for restructuring.
Its total liquidity stood at A$4.2bn as of December 31, which included total cash of A$2.6bn and committed undrawn facilities of A$1.6bn. Net debt stood at A$6.05bn
Qantas said it is planning to restart regular international passenger flights to most destinations from October 31– a four month delay from the previous estimate of July.
"The date change aligns with the expected timeframe for Australia’s Covid-19 vaccine rollout to be effectively complete," the airline said.
Qantas is planning to resume flights to 22 of its 25 pre-pandemic international destinations including Los Angeles, London, Singapore and Johannesburg from October 31.
The airline is still planning for a "material increase" in flights in the Australia-New Zealand travel corridor from July 1, Mr Joyce said.
A full recovery in international capacity is not expected until 2024, according to the airline.
As part of its three-year plan to deal with the Covid crisis, the airline will axe 8,500 jobs, with another 7,500 to be stood down until international travel recovers, Mr Joyce said.
The airline's three-year recovery plan will deliver at least A$1bn in permanent annual savings from the 2023 fiscal year onwards, Qantas said. An interim target of $600m in permanent savings for fiscal year 2021 remains "on track".
Looking ahead, the carrier expects the group's domestic capacity to increase to 60 per cent of pre-Covid levels in the third quarter and 80 per cent in the fourth quarter.
Group international capacity is currently at approximately 8 per cent of pre-crisis levels and unlikely to materially increase during in the second half, it said.
Net debt is expected to peak in the second half and the repair of its balance sheet to begin in the fourth quarter, it said.
