Qantas Posts HY Loss; Plans To Restart International Travel At End Of October

Qantas Group (QAN.AX,QUBSF.PK) reported that its loss for the half-year ended 31 December 2020 was A$1.08 billion or 57.5 cents per share compared to profit of A$445 million or 28.8 cents per share in the same period last year.

Loss before income tax expense was A$1.47 billion compared to net income of A$648 million in the previous year. The latest period result included further redundancy and restructuring costs of A$284 million–in addition to the A$642 million provided for in FY20– and a further A$71 million writedown of the A380 fleet in-line with its Australian dollar market value.

Underlying loss before tax was A$1.03 billion compared to profit of A$771 million last year.

Revenue and other income for the period dropped to A$2.33 billion from A$9.46 billion in the prior year. The latest-period results included A$6.9 billion revenue impact from COVID-19 crisis.

The airline will pay interim dividend in relation to the half-year ended 31 December 2020.

The company said it is now planning for international travel to restart at the end of October this year, in-line with the date for Australia’s vaccine rollout to be effectively complete.

The company is still targeting July for a material increase in New Zealand flights.

The Group noted that its liquidity, position in the domestic market and progress towards restructuring gives confidence that the overall recovery plan remains on track.

For 2021, the company expects group domestic capacity to increase to 60% of pre-COVID levels in the third-quarter of 2021 and 80% in the fourth-quarter of 2021.

Annual Group International capacity is currently expected at about 8% of pre-COVID levels on a block hours basis and unlikely to materially increase during the seconf-half of 2021. However, this level of activity reduces cost and lead time for re-activating the international network.

“Key to the Group’s recovery from the COVID crisis is its plan for major restructuring over three years. This will deliver at least A$1 billion in permanent annual savings from FY23 onwards,” Qantas said.

The interim target of A$600 million in permanent savings for fiscal year 2021 remains on track.

As previously announced, at least 8,500 people are leaving the organisation. More than 5,000 have left so far with the remainder to have left by the end of fiscal year 2021, the company said.

A total of 14,500 full time equivalent roles are now stood up while around 11,000 full time equivalent roles remain stood down, most of which are associated with international flying.

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