The Qantas Group blamed a “near-total collapse in travel demand” for recording a statutory loss before tax of $2.7 billion for the last financial year.
The business released a mixed set of results on Thursday morning, which also included the news it generated an underlying profit before tax of $124 million.
Chief executive Alan Joyce said, “It’s been shaped by extraordinary events that have made for the worst trading conditions in our 100-year history.
“To put it simply, we’re an airline that can’t really fly to many places – at least for now.”
The business was previously performing well before the coronavirus crisis hit in March, and claimed to be on course for another billion-dollar profit.
However, the second half of the quarter created a $4 billion drop in revenue, with group revenue alone falling 82 per cent from April.
The statutory loss – which includes one-off events – of $2.7 billion was in large part due to a $1.4 billion non-cash write down of assets including the A380 fleet – currently housed in the Mojave Desert – and $642 million in redundancy payouts. Joyce added the A380s would be in the desert “for years”.
“The fact that the group still delivered an underlying profit before tax of $124 million despite COVID says a lot about our resilience, and why we have confidence long term,” said Joyce.
He added that job losses, which saw almost 20 per cent of the company made redundant, will help deliver around $1 billion in annual savings from the FY23 financial year.
“Recovery will take time and it will be choppy,” said Joyce. “We’ve already had setbacks with borders opening and then closing again. But we know that travel is at the top of people’s wish lists and that demand will return as soon as restrictions lift. That means we can get more of our people back to work.
“A three-day Jetstar sale in June saw some 150,000 fares sold, reaching a record rate of 220 bookings per minute – demonstrating the latent demand for travel when borders do re-open.”
Qantas also revealed the total financial assistance it received from the government, from underwritten flights and JobKeeper payments, was $515 million. At the end of the financial year, the business’ total liquidity is more than $1.4 billion through a fully underwritten institutional placement and retail share purchase plan.
Joyce also confirmed earlier comments that the wider Qantas Group is now only operating 20 per cent of pre-COVID capacity, despite planning for more than double that when state borders were due to open and virus levels were lower. He said the international network was “unlikely to restart before July 2021 but possibly earlier for trans-Tasman”.
Earlier this month, Australian Aviation reported that just 5 per cent of Qantas investors took up an offer to purchase discounted shares in the airline – leaving the business with a potential $430 million funding shortfall.
Qantas said in June it was “determined to raise up to $500 million” from the scheme – but ended up generating just $71.1 million.
“The timing of these events and their implications for travel demand had an obvious impact on the Qantas share price and the take-up of the share purchase plan [SPP] offer by eligible shareholders,” said a spokesperson.