Qantas announces $1.9 billion loss
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Qantas announces $1.9 billion loss
https://www.smh.com.au/business/companies/qantas-swings-to-1-9b-loss-during-toughest-conditions-in-100-years-20200820-p55ngm.html
Qantas has swung to a $1.9 billion after-tax loss for the 2020 financial year after the COVID-19 pandemic forced it to ground most of its aircraft and halt international flights entirely.
Chief executive Alan Joyce said the pandemic presented the toughest set of conditions for the airline in 100 years, and that it was now unlikely Qantas will restart international flying before June next year, with the possible exception of flights to New Zealand.
The group reported a statutory loss before tax of $2.7 billion. The company did not announce a second-half dividend.
"The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many," Mr Joyce said. "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."
Qantas' net loss was driven by a $1.4 billion non-cash write-down to assets including its fleet of Airbus A380s, which have been parked in the Californian desert for at least three years, and $642 million in redundancy and other restructuring costs. Excluding those one-off costs, Qantas reported an underlying profit of $124 million, down 91 per cent from last year.Qantas' revenue between April and the end of June fell 82 per cent, pushing annual revenue down 20 per cent to $14.2 billion.
In June, Qantas said it would axe 6000 jobs, or around 20 per cent of its workforce; retire its remaining 747s ahead of schedule and mothball most of its international aircraft for 12 months in an effort to cut costs. The airline is currently flying around 20 per cent of its pre-COVID domestic capacity.
Mr Joyce said Qantas was on track for a full-year profit of more than $1 billion when the COVID-19 crisis struck, and the fact that it still delivered an underlying profit showed how quickly it adjusted to the collapse in revenue.
“Recovery will take time and it will be choppy," he said. "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."
Around 20,000 Qantas staff remain stood-down from work, from a pre-COVID workforce of 29,000.
Qantas said it collected $267 million in payments through the JobKeeper scheme, with the majority going to stood down workers and the rest used to subsidise the wages of staff continuing to work.
Chief executive Alan Joyce said the pandemic presented the toughest set of conditions for the airline in 100 years, and that it was now unlikely Qantas will restart international flying before June next year, with the possible exception of flights to New Zealand.
The group reported a statutory loss before tax of $2.7 billion. The company did not announce a second-half dividend.
"The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many," Mr Joyce said. "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."
Qantas' net loss was driven by a $1.4 billion non-cash write-down to assets including its fleet of Airbus A380s, which have been parked in the Californian desert for at least three years, and $642 million in redundancy and other restructuring costs. Excluding those one-off costs, Qantas reported an underlying profit of $124 million, down 91 per cent from last year.Qantas' revenue between April and the end of June fell 82 per cent, pushing annual revenue down 20 per cent to $14.2 billion.
In June, Qantas said it would axe 6000 jobs, or around 20 per cent of its workforce; retire its remaining 747s ahead of schedule and mothball most of its international aircraft for 12 months in an effort to cut costs. The airline is currently flying around 20 per cent of its pre-COVID domestic capacity.
Mr Joyce said Qantas was on track for a full-year profit of more than $1 billion when the COVID-19 crisis struck, and the fact that it still delivered an underlying profit showed how quickly it adjusted to the collapse in revenue.
“Recovery will take time and it will be choppy," he said. "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."
Around 20,000 Qantas staff remain stood-down from work, from a pre-COVID workforce of 29,000.
Qantas said it collected $267 million in payments through the JobKeeper scheme, with the majority going to stood down workers and the rest used to subsidise the wages of staff continuing to work.
Last edited by TimmyTee; 19th Aug 2020 at 23:44.
It's a little less dramatic when $1.4b of that is just asset write downs, although the next six months will be interesting. There seems to be confidence in domestic travel, limited only by border closures rather than demand.
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Whats the trade off for writing down the entire 380 fleet to the tune of $1.4bill? Didn’t the same thing happen for the 747s only a short while back?
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It's Allan's transformation program all over again. Write off everything he can, announce a huge loss. Big profits from FY21-22 onwards. Hand shakes all round with huge management bonuses. Rinse & repeat.
Last edited by normanton; 20th Aug 2020 at 04:03.
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I think they will find it hard to report an underlining profit for 20/21 unless by some miracle all this State border kids playpen fighting comes to an end.
This financial year will be a loss but not as bad as the one just announced and then a big profit 21/22. It is the transformational playbook repeated. Big bonuses coming for the executive team.
I'm sure Qantas and all the other airlines are constantly seeking government support in one form or another but it appears that, with no international network and a minimal domestic network, they won't actually need financial support for 12 to 18 months.
don’t think Alan believes in Government support; this from a newspaper 3 months ago:“Qantas CEO Alan Joyce warned against Federal Government assistance for his airline's competitor, saying help should not be offered to businesses that had been "badly managed".
Mr Joyce has repeatedly said airlines are facing a "survival of the fittest" scenario as the coronavirus pandemic grounds thousands of planes.
He has previously said Qantas is not seeking a bailout, but has warned that if Virgin gets government aid, the Federal Government needs to "level the playing field" to avoid distorting the market.”
Mr Joyce has repeatedly said airlines are facing a "survival of the fittest" scenario as the coronavirus pandemic grounds thousands of planes.
He has previously said Qantas is not seeking a bailout, but has warned that if Virgin gets government aid, the Federal Government needs to "level the playing field" to avoid distorting the market.”