Qantas Group posts half yearly loss but strengthens balance sheet

The impact of Delta lockdowns and emergence of the Omicron strain drove the Qantas Group to its fourth consecutive half yearly statutory loss of the pandemic, but with some tailwinds accelerating balance sheet repair. 

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CEO COMMENTS 

Qantas Group CEO Alan Joyce said: “Most of Australia was in lockdown for several months of the first half, so the loss we’ve announced today isn’t surprising but it is frustrating. 

“We saw a sharp rebound in travel demand when borders started opening in November and December, only to be hit by the Omicron wave and all the uncertainty that came with it. 

“The uncertainty carried over into January but demand has started to recover as Australia adjusts to truly living with COVID. Our frequent flyer surveys show the intent to travel is extremely high and we’re seeing good leisure demand into the fourth quarter. We’ve also seen a sharp uptick in international ticket sales in the past few weeks. 

“Predictions in a pandemic are naturally fraught, so we always forecast according to the best information we have but with the agility to adjust as needed. The fact we have all our Australian-based employees back at work means it makes sense for us to fly where it’s cash positive to do so. 

“Despite all the uncertainty, we finished the first half with net debt back inside our target range and with strong liquidity, meaning we can start to look further ahead at strategic decisions on fleet, network and growth opportunities. 

“We’re on track to deliver more than $900 million in annualised savings through restructuring by the end of FY22, which is ahead of schedule and means we’re able to recover faster and perform better than a pre-COVID Qantas Group could have. 

“The challenge of COVID hasn’t obscured the challenge of sustainability and emissions. Since January, we’ve been adding sustainable aviation fuel into our flights from London and we’re on the cusp of doing the same out of the US. We’ll have a significant update on our plans for emissions reduction next month. 

“We’re very conscious of the support and patience shown by customers and shareholders as we all wait for travel conditions to stabilise. In the meantime, we’ve done a lot of work to put this company in the best possible position to deliver. 

“Employees across the Qantas Group have lived through enormous challenge and uncertainty over the past two years. Many have been stood down for extended periods of time and we’ve asked them to accept a wage freeze to help our company get through an unprecedented crisis that many other airlines didn’t survive. 

“I’m pleased that we’re able to offer our people a direct stake in the national carrier through a reward and retention program. It means those who help us through the recovery can share in the success, just as they have in the past.”