Qantas (ASX: QAN) has reported an underlying loss of $1.28 billion for the December half after extended COVID-19 lockdowns and international restrictions cut flying capacity.
The result is 24 per cent worse year-on-year as the company reported flights fell to 18 per cent of pre-COVID levels.
Qantas CEO Alan Joyce said despite all the uncertainty, more than 90 per cent of passenger flights were cash positive and an additional $700 million in revenue was brought in compared to the same time last year.
“Most of Australia was in lockdown for several months for the first half, so the loss we’ve announced today isn’t surprising but it is frustrating," he said.
“It’s our fourth statutory half-year loss in a row, as we continue to deal with the twists and turns and COVID.
“It takes our total statutory losses since the start of this crisis to well over $6 billion and revenue losses to more than $22 billion.”
The group noted a sharp rebound in travel demand when borders started to open around Christmas, which was quickly crushed when the Omicron wave hit.
However, bookings have been what Joyce describes as “strong” since Australian borders opened on Monday, with many more arrivals planned in the coming months.
While travel demand is strengthening, the group anticipates Omicron will take a $650 million bite out of earnings in 2H22.
“When international borders opened in early November, we were one of the first carriers ready to go on sale, and captured a lot of pent-up demand – including our new flights to India,” he said.
“In the past few weeks, as more border restrictions have dropped away, we’ve seen international bookings strengthen even further. In mid-February, we had our best week for international ticket sales since pre-COVID.”
Looking ahead, the group anticipates it can return to 24 per cent capacity (compared to pre-COVID levels) in 3Q22 and 43 per cent capacity in 4Q22.
Qantas also expects international capacity to grow by 70 per cent in the first quarter of FY23.
Liquidity was reported to be $4.3 billion in cash and undrawn facilities as at 31 December.
“We know the road to recovery still has some way to go,” Joyce said.
“But as Australia completes its shift to truly living with COVID, we can see things are stabilising. In the past month alone, I’ve travelled to Brisbane, Hobart, Melbourne and Darwin – and the airports are getting busier and busier.
Our forward bookings in the past few months have been very encouraging and keep trending upwards. And the Qantas Group is in a strong position to keep serving Australia well into the future.”
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