Qantas $1.83 Billion Loss FY20/21

[TimmyTee]

In what has been a horror 18 months for the global aviation industry, Qantas has revealed a staggering $2.3 billion loss before tax amid the ongoing COVID-19 global pandemic which has decimated the tourism industry. At the underlying level, the airline’s loss was $1.8 billion — a figure exceeding expert predictions.

https://www.news.com.au/travel/travel-updates/health-safety/qantas-results-2021-financial-report-reveals-183-billion-loss-during-covid19-lockdowns/news-story/967322ec7781d24e3c334f70f5bb9889

https://www.smh.com.au/business/companies/qantas-reports-1-7b-loss-as-pandemic-woes-deepen-20210825-p58lz5.html

Surely that rainy day cash account must be getting drained fairly rapidly given another Titanic loss.
Would another unexpected & heavily compromised year be a bridge too far? Or is there a level of certainty inside Coward St that the Government is always there if it gets to that.

[No Idea Either]

Govmint don’t pick winners Timmmeeeeee…

[TimmyTee]

Surely Morrison and Co wouldn’t allow QF to go under if there’s another complication with the grand re-opening plan?

[MickG0105]

Surely that rainy day cash account must be getting drained fairly rapidly given another Titanic loss.
Would another unexpected & heavily compromised year be a bridge too far?
They blew through $1.3 billion of their cash but only added $137 million in interest bearing liabilities. Net debt is up by $1.2 billion to $5.9 billion, which is approaching the upper bound of their target debt range.

They start this current FY with $2.2 billion in cash and $1.58 billion in undrawn facilities for a liquidity position of $3.8 billion, down by only $724 million on the previous year. Not great, not terrible to borrow a line.

Given that revenue was down by $12 billion last FY they've managed this pretty well to date. Given their current position they could certainly manage their way through another year like the last one.

[TimmyTee]

But wouldn’t a lot of that “management” to get through the past 18 months come from the government subsidies to both airlines, and their employees? If they dried up this next FY, it could potentially be a different outcome. How would have they gone without that assistance? Sort of like REX claiming a profit, with almost the entirety of that profit coming from a Gov handout.

[No Idea Either]

Timmmeeeee

I have absolutely no doubt that, despite Scomo and Joshies past policy, QF will be bailed if required.

[Bad Adventures]

Share price holding up ok. Pushing 5 bucks.

[dr dre]

Share price holding up ok. Pushing 5 bucks.

Not just holding up but increased by 2%. Investors aren’t seeing too much of a long term problem with the numbers revealed today.

[a_pilot]

A380s coming back earlier (https://www.qantasnewsroom.com.au/media-releases/qantas-group-outlines-strategy-for-restarting-international-flights/)

For the the past 18 months the experts on here (envious jealous Qantas haters) keep telling me they will never fly again.

Ok, they are not back "yet" but sorry all you haters, no news about "aircraft fleet scrapping/mass pilot lay-offs" as you all eagerily wanted to hear.

[MickG0105]

But wouldn’t a lot of that “management” to get through the past 18 months come from the government subsidies to both airlines, and their employees? If they dried up this next FY, it could potentially be a different outcome. How would have they gone without that assistance? Sort of like REX claiming a profit, with almost the entirety of that profit coming from a Gov handout.
Qantas picked up $588 million in JobKeeper for the year and probably around $30 million from the International Aviation Support program. All of that comes in on the Revenue line and straight back out on the Manpower expense line; it's essentially a pass through.

They benefited about $97 million from the Australian Airline Financial Relief package (the Government foregoing fees and charges). Qantas probably got $70 million in benefits from the Tourism Aviation Network Support Program last FY and $35 million from the Regional Airline Network Support Program. Call it $200 million in grants, although both TANS and RANS require services to be flown so neither are straight out "gifts".

On top of that there was some $200 million from the various iterations of the Domestic Aviation Network Support Program. Again, DANS required services to be flown so that while $200 million went to the Revenue line, there would have been costs associated with the provision of those services.

There was also some $200 million paid for freight flights under the Domestic International Freight Assistance Mechanism and around $1.2 million for repatriation flights; again there would have been costs associated with the provision of those services.

So, leaving aside JobKeeper and IAS, you could say that some $500 million of Qantas's $5.9 billion in revenue came from government programs and they shaved nearly $100 million from their $7.9 billion expenses line thanks to AAFR. In the total absence of any government support they would likely still be able to manage their way through another year like the last one given their current net debt and liquidity position.

[PoppaJo]

I really think it’s time to cut off Jetstar Singapore and Japan.

[Paragraph377]

Qantas picked up $588 million in JobKeeper for the year and probably around $30 million from the International Aviation Support program. All of that comes in on the Revenue line and straight back out on the Manpower expense line; it's essentially a pass through.

They benefited about $97 million from the Australian Airline Financial Relief package (the Government foregoing fees and charges). Qantas probably got $70 million in benefits from the Tourism Aviation Network Support Program last FY and $35 million from the Regional Airline Network Support Program. Call it $200 million in grants, although both TANS and RANS require services to be flown so neither are straight out "gifts".

On top of that there was some $200 million from the various iterations of the Domestic Aviation Network Support Program. Again, DANS required services to be flown so that while $200 million went to the Revenue line, there would have been costs associated with the provision of those services.

There was also some $200 million paid for freight flights under the Domestic International Freight Assistance Mechanism and around $1.2 million for repatriation flights; again there would have been costs associated with the provision of those services.

So, leaving aside JobKeeper and IAS, you could say that some $500 million of Qantas's $5.9 billion in revenue came from government programs and they shaved nearly $100 million from their $7.9 billion expenses line thanks to AAFR. In the total absence of any government support they would likely still be able to manage their way through another year like the last one given their current net debt and liquidity position.
Qantas still also make a motza from its FF program which was boosted last year when VA went tits up, so to speak. So there are still revenue streams within the Qantas group that are pulling in some breadcrumbs. Not enough to rebuild the war chest but enough to keep the airline going.

[MickG0105]

Qantas still also make a motza from its FF program which was boosted last year when VA went tits up, so to speak. So there are still revenue streams within the Qantas group that are pulling in some breadcrumbs. Not enough to rebuild the war chest but enough to keep the airline going.
Yep, last FY Loyalty was the only part of the QF Group to return a positive EBIT; $272 million off of $984 million in revenue.

[Slugga]

Still a better result than JB running VA in the best economic conditions this country has ever seen. Just shows the depths of his 'talents'.

[TimmyTee]

So, leaving aside JobKeeper and IAS, you could say that some $500 million of Qantas's $5.9 billion in revenue came from government programs and they shaved nearly $100 million from their $7.9 billion expenses line thanks to AAFR. In the total absence of any government support they would likely still be able to manage their way through another year like the last one given their current net debt and liquidity position.

It appears the total bailout Qantas has received is more than $1 Billion. Thats an insanely high figure.
https://www.theaustralian.com.au/business/margin-call/qantas-receives-more-than-1bn-in-government-assistance/news-story/a5ec7f39ddfa334525aa7b6b3c60f4c9

[continue#1]

Just the cost of doing business…. I mean running a country with closed borders in a pandemic

[SHVC]

Before everyone gets carried away about the Gov “handout” which a very large chuck was jobkeeper. VA got a cut of the pie whilst being in administration and also having a foreign entity save it, Rex got a big piece of the pie also then announcing a jet operation start up. These handout all commensurate to the business size.

[MickG0105]

It appears the total bailout Qantas has received is more than $1 Billion. Thats an insanely high figure.
https://www.theaustralian.com.au/business/margin-call/qantas-receives-more-than-1bn-in-government-assistance/news-story/a5ec7f39ddfa334525aa7b6b3c60f4c9
You sound surprised. Add up what I put in my post and you'll get the same number.

As to "bailout" or "handout" as The Oz article calls it, that sort of language is unhelpful as neither term is apt, moreso the former.

As I posted, Qantas received $588 million in JobKeeper for the year and around $30 million from the International Aviation Support Program. So more than half of government payments to Qantas went directly into the hands of employees; somewhat inappropriate to frame that as an out, either bail or hand.

[DirectAnywhere]

You sound surprised. Add up what I put in my post and you'll get the same number.

As to "bailout" or "handout" as The Oz article calls it, that sort of language is unhelpful as neither term is apt, moreso the former.

As I posted, Qantas received $588 million in JobKeeper for the year and around $30 million from the International Aviation Support Program. So more than half of government payments to Qantas went directly into the hands of employees; somewhat inappropriate to frame that as an out, either bail or hand.


Don't forget that if the employee was still working or taking paid leave, then the employer kept Jobkeeper all for themselves. So, much of that $588 million was in fact retained by the airline.

[MickG0105]

Don't forget that if the employee was still working or taking paid leave, then the employer kept Jobkeeper all for themselves. So, much of that $588 million was in fact retained by the airline.
That's not correct. The Fair Work Ombudsman ruling on paid leave is quite clear;

Paid leaveEmployers and employees can agree for employees to take paid leave while they’re receiving JobKeeper payments. Qualifying employers need to pay their employees for any work they continue to perform and for authorised paid leave that they take.
Payment for leaveWhile an employee of a qualifying employer is on paid leave (such as annual leave or long service leave), they need to be paid:


an amount equal to the applicable JobKeeper payment, or
their usual pay for work performed (including leave payments), if it’s more than the applicable JobKeeper amount.

Source (https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/changes-to-workplace-laws-during-coronavirus/jobkeeper-scheme-overview/leave-the-jobkeeper-scheme)

[DirectAnywhere]

That's not correct. The Fair Work Ombudsman ruling on paid leave is quite clear;

Source (https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/changes-to-workplace-laws-during-coronavirus/jobkeeper-scheme-overview/leave-the-jobkeeper-scheme)

Yeah, so if I was getting paid an amount for a fortnight's annual leave that I opted to take when I was stood down, QF used the 1500 reducing to 1200 then 1000 to subsidise that and had to pay me the rest, so they saved up to $1500 for the fortnight. That's an employee entitlement which the company has to fund anyway so the government subsidised my leave.

If I was at work, QF kept the money and used it to subsidise my salary as my salary was in excess of Jobkeeper.

If I took no leave and was on stand down I got the full amount and QF got nothing.

Jobkeeper was a massive fillip to employers as they kept most of it, unless their staff were on unpaid stand down in which case it was handed directly to the employee via payroll. Provided they had the cash, the best outcome for employers at the time was that staff were stood down but taking their leave to supplement their income as they were getting vast quantities of leave liabilities off the books subsidised heavily by the federal government. Nice work if you can get it.

[MickG0105]

Yeah, so if I was getting paid an amount for a fortnight's annual leave that I opted to take when I was stood down, QF used the 1500 reducing to 1200 then 1000 to subsidise that and had to pay me the rest, so they saved up to $1500 for the fortnight. That's an employee entitlement which the company would have to fund if it went bust tomorrow so the government subsidised my leave.

If I was at work, QF kept the money as my salary was in excess of Jobkeeper.

If I took no leave and was on stand down I got the full amount and QF got nothing.

Jobkeeper was a massive fillip to employers as they kept most of it, unless their staff were on unpaid stand down in which case it was handed directly to the employee via payroll.
And how many QF staff were on unpaid stand down?

[DirectAnywhere]

Lots, mainly operational staff as I'm sure you're aware, but many of them were taking leave, and many staff weren't stood down. So, for those staff not stood down, if their salary was greater than 1000-1500 per fortnight, depending on the value of Jobkeeper at the time, QF kept the lot and paid those staff not stood down as normal.

Those staff taking leave had the cost of their leave to QF subsidised.

I'm not saying QF got the entire 588 million but they would have kept a pretty fair chunk of it and it's a falsehood to suggest that it went "directly in to the hands of employees".

[MickG0105]

Lots, mainly operational staff as I'm sure you're aware, but many of them were taking leave, and many staff weren't stood down. So, if their salary was greater than 1000-1500 per fortnight, depending on the value of Jobkeeper at the time, QF kept the lot and pad staff not stood down as normal.

I'm not saying QF got the entire 588 million but they would have kept a pretty fair chunk of it and it's a falsehood to suggest that it went "directly in to the hands of employees".
Fair enough. Call it 50-50 then, Qantas benefited by around $294 million out of JobKeeper. Small consolation given that government restrictions blew a $15 billion smoking hole in their revenue.

[DirectAnywhere]

Fair enough. Call it 50-50 then, Qantas benefited by around $294 million out of JobKeeper. Small consolation given that government restrictions blew a $15 billion smoking hole in their revenue.

Oh yeah, absolutely no doubt about that. It’s small bickies indeed in the context of the last couple of years.

[cLeArIcE]

Yeah, so if I was getting paid an amount for a fortnight's annual leave that I opted to take when I was stood down, QF used the 1500 reducing to 1200 then 1000 to subsidise that and had to pay me the rest, so they saved up to $1500 for the fortnight. That's an employee entitlement which the company has to fund anyway so the government subsidised my leave.

If I was at work, QF kept the money and used it to subsidise my salary as my salary was in excess of Jobkeeper.

If I took no leave and was on stand down I got the full amount and QF got nothing.

Jobkeeper was a massive fillip to employers as they kept most of it, unless their staff were on unpaid stand down in which case it was handed directly to the employee via payroll. Provided they had the cash, the best outcome for employers at the time was that staff were stood down but taking their leave to supplement their income as they were getting vast quantities of leave liabilities off the books subsidised heavily by the federal government. Nice work if you can get it.
If you can scrape by on job keeper why would you take leave? I sure haven't. I'll keep the leave and take the job keeper thank you. Doesn't even come close to the amount of tax that i've paid last year. Different story if you can't make job keeper cover your expenses with kid's etc. I'm fortunate that I don't have that and my partner in a different industry also gets job keeper. I'm sure companies would keep every cent if they could.

[Rabbitwear]

If you can scrape by on job keeper why would you take leave? I sure haven't. I'll keep the leave and take the job keeper thank you. Doesn't even come close to the amount of tax that i've paid last year. Different story if you can't make job keeper cover your expenses with kid's etc. I'm fortunate that I don't have that and my partner in a different industry also gets job keeper. I'm sure companies would keep every cent if they could.
It sounds great till you scratch the surface , but using up leave can be advantageous as well, more than likely on a lower tax bracket for the year , so leave is worth more in the hand. Paying off any debt faster is a major advantage.
Storing up leave is not such a good idea if your company goes bankrupt . A happy medium is what’s required.

[uberrobbo]

They blew through $1.3 billion of their cash but only added $137 million in interest bearing liabilities. Net debt is up by $1.2 billion to $5.9 billion, which is approaching the upper bound of their target debt range.

They start this current FY with $2.2 billion in cash and $1.58 billion in undrawn facilities for a liquidity position of $3.8 billion, down by only $724 million on the previous year. Not great, not terrible to borrow a line.

Given that revenue was down by $12 billion last FY they've managed this pretty well to date. Given their current position they could certainly manage their way through another year like the last one.

MickG0105 I do love that you quoted a now infamous line from Chernobyl, in the context of understating a disaster.

Seriously, though, thanks for the concise summary and snapshot of QF's financial position.

[ruprecht]

It sounds great till you scratch the surface , but using up leave can be advantageous as well, more than likely on a lower tax bracket for the year , so leave is worth more in the hand. Paying off any debt faster is a major advantage.
Storing up leave is not such a good idea if your company goes bankrupt . A happy medium is what’s required.
I used my secondary employment and jobkeeper to get by to preserve my leave and maximize jobkeeper. Now that the IRP is an extra payment I’m using up my leave to pay down debt. So I’m getting paid from leave, IRP and secondary employment so it’s all pretty good at the moment - the only problem is leave (and IRP) is a finite resource… :(

About to run out of AL, LSL at half rate should see me to March 22. Hopefully there’ll be some better news by then.

[DBMeridien]

Anyone notice in the results presentation that A330 to operate BNE to US West Coast? Interesting.

[MelbourneFlyer]

Anyone notice in the results presentation that A330 to operate BNE to US West Coast? Interesting.

Yes, noticed that Executive Traveller picked that up, apparently QF working with Airbus to extend the A330s MTOW to a level which was not available when the QF A330-200s entered service: https://www.executivetraveller.com/news/qantas-will-fly-airbus-a330s-from-brisbane-to-la-san-francisco

[MelbourneFlyer]

Story here on QF exec payments for FY21: https://www.smh.com.au/national/qantas-flies-low-as-exec-pay-comes-down-from-the-clouds-20210826-p58mas.html

While the airline will make us wait until September for the full executive pay breakdown, company reps revealed that pay for senior executives over the past financial year was down 70 per cent on pre-pandemic levels. Oh, and annual bonuses had been cancelled. Again. The board took reduced fees while some members of the executive team accepted payment in Qantas shares rather than cash.