MIAMI – In a speech by Qantas Airways (QF) CEO published by the airline, Alan Joyce examined the extraordinary circumstances behind the carrier’s FY20’s dismal results.
An airline that was performing well pre-COVID-19, QF, like many others, continues to be hard hit by the COVID-19 pandemic. Profits for QF were down 91% compared to last year at only US$124m pre-tax. QF also reported a statutory loss of US$2.7bn.
Before border restrictions were put in place by various governments, QF saw a strong performance for the beginning of the fiscal year. The airline made US$771m in underlying profit pre-tax compared to a US$4bn drop in revenue in the second half of the year.
In regard to the losses, Joyce said, “Despite the recent setbacks, we know conditions will ultimately improve. And the hard decisions we’ve made so far are about making sure the Qantas Group is ready to take part in the recovery.”
Domestic and International Operational Performance
Qantas adapted quickly to domestic travel restrictions in order to maximize potential during this crisis.
The airline cut costs and redeployed resources in various sectors. This included the launching of new domestic routes (Sydney to Ballina & Orange) and hosting a three-day sale with Jetstar (JQ) that sold 150,000 fares.
Qantas’ international operations made US$56m in profit due to the strong performance by Qantas Freight.
After almost a complete halting of international flights to/from Australia in April, the airline operated many international flights on behalf of the Australian Government.
In addition to owning 100% of Jetstar Airways, Qantas Group owns minority stakes in Jetstar Japan and Jetstar Asia Airways. Despite cost-cutting methods, Jetstar’s international business accrued losses.
The Future of Qantas
Despite the bleak situation the aviation industry is in, QF is looking to the future with many projects that will resume when the industry begins to recover.
Following the bankruptcy filing by Virgin Australia (VA), Bain Capital purchased the airline and announced that it would retire the remaining long haul fleet of the airline. Thus, QF will be the only Australian airline operating long haul flights internationally.
QF will also be looking to resume Project Sunrise and a fleet renewal for domestic operations. Joyce commented, “Domestically, there are lots of opportunities for Qantas, QantasLink, and Jetstar, which will ultimately justify renewing our fleet.”
Qantas Airbus A380-842 reg. VH-OKG taking off from Kingsford Smith Airport (SYD). Photo: Federico Pronesti – @fede.spotter.fco