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Qantas won’t fly again until 2021 after recording 91 per cent financial loss

Qantas will not begin flying internationally again until at least July 2021 as it records a $2billion loss in the 2020 financial year due to the COVID-19 pandemic.

At least 6,000 staff lost their jobs and another 20,000 were stood down as the embattled airline’s profits plunged by 91 percent after the crisis grounded almost all international travel in early 2020.

Qantas Group CEO Alan Joyce said the second half of 2020 was the toughest few months in the Flying Kangaroo’s illustrious 99-year history – it turns 100 on November 16th – and called on state premiers to reconsider tough border closures.

‘The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many,’ he said.

‘We don’t understand why states with zero cases still have borders closed to other states with zero cases… If it’s safe, we need to reopen them.’ 

A near total collapse of travel demand and revenue contributed to the losses, which are similar to those recorded within other airlines throughout Australia.

In addition to the international border closures, in place since March 20 several Australian states closed their domestic borders, further crippling an industry already on its knees. 

A statement released by Qantas on Thursday morning described 2020 as ‘the most challenging period in its long history’.

Bosses confirmed Qantas’ international flights were unlikely to restart until at least July 2021, and domestic travel would be at 20 per cent of its usual levels. 

The year-on-year figures reflect a promising start to the financial year prior to the pandemic – which was first identified in Wuhan, China, in December 2019.

But as the virus rapidly spread across the globe, the airline’s projected profits collapsed.

The embattled airline estimated the economic blow from the coronavirus pandemic is in excess of $4billion.

The airline stated this drop was a direct reflection of ‘the COVID-19 crisis and associated border restrictions’.   

‘Fast action to radically cut costs and place much of the flying business into a form of hibernation helped minimise the financial impact from this extraordinary sequence of events,’ the statement continued. 

Total costs were reduced by 75 per cent, aided by the federal government’s stimulus and support packages, including the JobKeeper program which kept millions of Australians employed and funded $267million toward Qantas employees’ paychecks.  

‘We’ve had to make some very tough decisions in the past few months to guarantee our future. At least 6,000 of our people will leave the business through no fault of their own, and thousands more will be stood down for a long time,’ Mr Joyce said.

Mr Joyce acknowledged that recovery would be ‘choppy’, citing a handful of setbacks the airline had already faced. 

‘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.’ 

Mr Joyce criticised state premiers who are refusing to give clear direction on the border closures.

‘We don’t have any determination for when the borders will reopen, we think and the federal government thinks they should reopen soon,’ Mr Joyce said during a press conference on Thursday. 

‘It’s a problem for all business, it’s a problem for our business and eventually it’s going to be a problem for our economy.’

When asked whether he supported Queensland Premier Annastacia Palaszczuk’s decision to keep borders closed potentially until Christmas, Mr Joyce said he doesn’t agree with ‘blanket closures’. 

‘What’s the basis of blanket comments that say borders will not be opened even if Victoria and NSW gets back to no cases?’ he asked.

‘Surely these decisions should be based on the facts, the health decisions, otherwise it feels like there is no base decisions and is just there to inform the politics.’

Mr Joyce said some parts of Queensland, as well as Tasmania and other areas in Australia are heavily reliant on tourism and are suffering unnecessarily through these domestic border closures.   

But Qantas leaders believe the company is still well placed to bounce back and take advantage of the market when it eventually returns, though there aren’t any expectations that such a return will occur any time soon. 

‘What makes Qantas different is that we entered this crisis with a strong balance sheet and we moved fast to put ourselves in a good position to wait for the recovery,’ Mr Joyce said. 

He also admitted the Americas might be one of the last destinations the airline will resume travel to due to the high concentration of COVID cases.

‘We’re taking the view that the earliest we’re going to see international borders opening up is middle of next year… Potentially do bubbles country by country when we’ve had a similar level of exposure to the virus,’ he suggested.

‘The US, with the level of prevalence there, is going to take some time. We’re probably going to need a vaccine first.’

While international travel is likely unavailable until mid-2020, the Australian airline hopes Trans Tasman travel will resume sooner.

In the interim, the company will do what it can to claw back domestic customers. 

Qantas made it easier for their 13 million members to use their accumulated points in a loyalty program to drive new bookings and sales.

For the remainder of 2020, Qantas have increased the number of seats available on flights to popular destinations including Cairns, Sunshine Coast, Sydney, Queenstown and Auckland by up to 50 per cent. 

Points Plus Pay Qantas Hotels have decreased their booking price by 20 per cent, with all flight cancellation fees waived until 31 October 2020 and more Points Planes to meet pent up travel demand.

Mr Joyce said the changes will greatly benefit domestic tourism hotspots in Australia and support local jobs after the pandemic.

‘Australia is home to world-class destinations and Qantas is making it easier for frequent flyers to visit them,’ he said.

‘We’re adding more Points Planes and more reward seats to our most popular domestic destinations, because that’s where people will be holidaying for the rest of the year.

‘We’re also helping our most loyal flyers maintain their travel benefits by giving them extra Status Credits in recognition of their long-term loyalty.’ 

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