Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
COURTESY

Coronavirus

Australia’s Qantas posts US$1.9 bn loss, confirms job cuts

SYDNEY, Australia, Aug 20- Australian flag carrier Qantas on Thursday posted an almost US$2-billion annual loss after a “near-total collapse” in demand due to the coronavirus pandemic.

Strict restrictions on travel to Australia and a near-blanket ban on citizens leaving spelled a statutory pre-tax loss of Aus$2.7 billion (US$1.9 billion), including the cost of mothballing its Airbus A380s and huge redundancy payouts.

Revenues collapsed 82 percent between April and June.

Facing “the most challenging period” in its 99-year history, Qantas said it would move ahead with retrenching 6,000 staff and has grounded 100 planes for up to a year in a US$10-billion cost-cutting blitz.

The airline reported a “strong first half of the year” followed by “a near-total collapse in travel demand” as virus restrictions were introduced. 

“We were on track for another profit above Aus$1 billion (US$718 million) when this crisis struck,” CEO Alan Joyce said. 

The global aviation industry is facing perhaps its biggest crisis to date, with numerous big-name carriers seeking billions of dollars to stop them from going under, while others have gone out of business. 

In Australia, the sector has received hundreds of millions of dollars in taxpayer funds as the government scrambled to save it from collapse.

Joyce said the industry’s recovery will “take time and it will be choppy”. 

Advertisement. Scroll to continue reading.

“COVID is reshaping the competitive landscape and that presents a mix of challenges and opportunities for us,” he said.

Qantas said “fast action to radically cut costs and place much of the flying business into a form of hibernation” helped minimise the financial impact from the pandemic shutdown.

Despite the ongoing uncertainty, the carrier believes it remains “well positioned” to take advantage of the eventual return to air travel. 

Its main competitor, Virgin Australia, went into voluntary administration in April shortly after Australia closed its international borders and domestic travel plunged. 

Virgin announced earlier this month it would close budget subsidiary Tigerair Australia and lay off 3,000 staff as it prepares to relaunch under the new ownership of US private equity giant Bain Capital.

Joyce said the pandemic would continue to have a “huge impact” on Qantas, with expectations of a “significant loss” in the coming financial year.

Several domestic state borders remain closed while Qantas has said it does not expect to return to international flights approaching pre-pandemic levels until mid-2021. 

Australia, which has recorded just over 24,000 cases of coronavirus and 463 deaths to date, has limited the number of its own citizens who can return home from overseas in a bid to stem the spread of the virus. 

Government officials have said the island nation will not reopen to overseas travellers until a vaccine for COVID-19 is found. 

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...