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Qantas cops $650m hit due to Omicron

written by Hannah Dowling | February 24, 2022

Quantas VH-OQA
File image of Qantas Airbus A380 VH-OQA. (David Soda)

Qantas has announced that the Omicron outbreak, which stunted its planned full domestic capacity recovery, cost the business an estimated $650 million.

However, the airline has said it now appears back on track to reach up to 100 per cent of its pre-COVID domestic capacity by June.

International travel on the other hand will continue to remain below 50 per cent of 2019 levels.

The airline announced on Thursday that it expects to be operating at 68 per cent of its pre-COVID flight capacity through to March, with this jumping to 90-100 per cent in the following quarter.

International traffic remains at just 22 per cent of 2019 levels through to the end of March, with this expected to double to 44 per cent of pre-COVID capacity by the end of June.

The airline noted that leisure travel will continue to drive domestic capacity recovery, while business travel is not yet expected to recover.

The airline had previously suggested that it would reach 102 per cent of its pre-COVID domestic capacity by March 2022, however, was forced to slash capacity by over 30 per cent due to the Omicron outbreak, which decimated passenger demand and exacerbated staffing shortages due to COVID isolation rules.

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Qantas had also previously stated that it would operate just 30 per cent of its pre-COVID international flight capacity between January and March 2022, however this number was later cut down to 20 per cent, also due to the Omicron outbreak.

The airline said this move was largely made in light of certain countries, including Japan and Thailand, introducing additional travel restrictions to curb their own COVID outbreaks.

Overall, Qantas revealed an underlying loss before tax of $1.28 billion for the six months to December 2021.

“Most of Australia was in lockdown for several months of the first half, so the loss we’ve announced today isn’t surprising but it is frustrating,” CEO Alan Joyce said.

“We saw a sharp rebound in travel demand when borders started opening in November and December, only to be hit by the Omicron wave and all the uncertainty that came with it.”

“We know the road to recovery still has some way to go, but as Australia completes its shift to truly living with COVID, we can see things are stabilising,” he added.

“In the past month alone, I’ve travelled to Brisbane, Hobart, Melbourne and Darwin – and the airports are getting busier and busier.

“Our forward bookings in the past few months have been encouraging and keep trending upwards.

“And the Qantas Group is in a strong position to keep serving Australia well into the future.”

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