Qantas’ profit has plunged more than 90 per cent as the airlines bottom line is delivered a knockout punch by COVID-19.
Revealing its financial results to shareholders this morning, the airline said its underlying profit before tax was just $124 million, down 91 per cent on the previous financial year.
Its statutory loss before tax has ballooned out to $2.7 billion.
Qantas has estimated the economic blow delivered to the business by coronavirus is in excess of $4 billion.
Qantas’ statutory loss before tax has ballooned out to $2.7 billion. (iStock)
CEO Alan Joyce described the virus as creating the toughest business conditions ever faced by the airline in its 100-year history.
“The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many. 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.
“We’ve had to make some very tough decisions in the past few months to guarantee our future.
CEO Alan Joyce said the airline is battling the toughest conditions in its 100-year history. (AAP)
“At least 6000 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 were it not for the virus Qantas was on track to deliver a profit above $1 billion this financial year.
He also delivered a veiled shot at rival Virgin, whose new owners have shelved its low-cost brand Tigerair in the current climate.
Grounded Qantas aircraft are seen parked at Brisbane Airport. (AAP)
“COVID will continue to have a huge impact on our business and we’re expecting a significant underlying loss in FY21,” Mr Joyce forecast.
“Looking further ahead, we’re in a good position to ride out this storm and make the most of the recovery.
“Our market position is set to strengthen as the only Australian airline with a full service and low fares domestic offering as well as long haul international services.”
A general view in T1 Qantas Domestic terminal at Tullamarine Airport on July 6, 2020 in Melbourne, Australia. The NSW-Victoria border will close at 11.59pm on Tuesday evening due to a large spike in COVID-19 cases in Victoria. (Getty)
Qantas said international flights, with the exception of a proposed ‘Trans-Tasman bubble’, will be unlikely to restart until at least July 2021.
Currently only 20 per cent of its standard domestic capacity is scheduled to fly in August.
For employees, 4000 of 6000 redundancies will be finalised by the end of September, with an ongoing stand down of 20,000 employees remaining in place.
The airline has retired the entirety of its Boeing 747 fleet and more than 100 flight-ready aircraft now sit in storage.
Underlying profit before tax: $124 million (down 91 per cent)
Statutory loss before tax: $2.7 billion
Revenue impact as a result of COVID-19: $4 billion
Operating cash flow: $1.1 billion
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