Qantas half yearly results are in and the outcome from the COVID-19 pandemic and border closures is ugly. Qantas posted an Underlying net loss of $1.03 billion for the first six months of financial year 2021. To put this in perspective Qantas posted a $771 million profit for the corresponding period in 2020. Qantas’ revenue in the half fell 75 per cent to $2.3 billion, as the number of passengers it carried fell by 83 per cent.

According to Alan Joyce these figures are stark but not surprising. “During the half we saw the second wave in Victoria and the strictest domestic travel restrictions since the pandemic began. Virtually all our international flying and 70 per cent of domestic flying stopped, and with it went three-quarters of our revenue.”

Ongoing domestic border closures have certainly dampened Qantas’ recovery and Alan Joyce has been frustrated by harsh border closers in some States. Border announcements has resulted in immediate spikes in demand and or cancellations.

Of the 8500 employees identified as surplus to the Qantas’ needs, more than 5000 have been made redundant. Another 14,500 were working, but 11,000 remained stood down, due to the lack of international flying. The latest results show Qantas also received $459 million in JobKeeper payments.

Amid the gloom there is some positive news for Qantas. There has been a significant uptake in freight supported by surging e-commerce trends and Qantas’ domestic operation had returned to a positive cash flow position with significant pent up travel demand. Qantas is also on track to deliver 600 million in cost savings in FY 2021. With Virgin Australia flying a reduced schedule and Tigerair gone, Qantas has enhanced its competitive position with its domestic market share rising to about 70 per cent.

The COVID vaccine rollout in Australia is a game changer for Qantas. While Alan Joyce acknowledged that it would take time the fact it is underway gives Qantas more certainty. Consequently, Qantas announced that it plans to resume international flying at the end of October but expected travel to New Zealand to open from July.

Source: Qantas announces $1 billion loss amid coronavirus pandemic by Gerard Cockburn The Australian Feb 25th, Qantas counts heavy first half loss by Robyn Ironside The Australian Feb 25th, Qantas posts $1 billion half year loss, aiming to fly international in October by Patrick Hatch SMH Feb

David Broadbridge

David Broadbridge holds a Bachelor of Commerce at the UNSW and a Dip Ed at UNE. He is the former Head Business Studies teacher at Pymble Ladies College. Follow David on Twitter or read his Qantas News Blog.