Qantas Group today reported a statutory loss of $2.7 billion for the year to June 30 – the “most challenging period” in the airline’s 100 year history.
The massive loss is entirely due to the impact of COVID-19.
Until the virus hit, Qantas was doing well, posting a $771 million Underlying Profit Before Tax for the first six months of the financial year.
This was “followed by a near total collapse in travel demand and a $4 billion drop in revenue in the second half due to the COVID-19 crisis and associated border restrictions,” Qantas said in a statement.
“From April to end of June, Group revenue fell 82 per cent while cash costs were reduced by 75 per cent, helping to limit the drop in Underlying Profit Before Tax in 2H20 to $1.2 billion.
As a result, Qantas a $2.7 billion statutory loss before tax, due mostly to a $1.4 billion non-cash write down of assets including the A380 fleet and $642 million in one-off redundancy and restructuring costs.
Even so, it could have been worse, Qantas says.
“Fast action to radically cut costs and place much of the flying business into a form of hibernation helped minimise the financial impact from this extraordinary sequence of events.”
It adds: “Despite significant uncertainty across most markets, the Group remains well positioned to take advantage of the eventual return of domestic and, ultimately, international travel demand.”
Meanwhile, the company says Qantas Freight and Qantas Loyalty continue to generate significant cashflow and charter operations for the resources sector are performing strongly.