• Qantas has announced it is cancelling international flights through to the end of July.
• The airline says it is currently burning through cash at a rate of $40 million per week.
• However, the company says it is in a strong enough financial position to withstand the current challenging environment all the way through to the end of 2021.
• Visit Business Insider Australia’s homepage for more stories.

Qantas has announced it is extending its international flight cancellations through to the end of July, as the airline admits it is currently burning cash at a rate of $40 million per week during the coronavirus shutdown.

In a market update to the ASX, the airline, which is currently operating at 5% of its pre-crisis domestic capacity and 1% of pre-crisis international capacity, said it would continue to stand down staff through to at least the end of June, supported by the JobKeeper payment.

Domestic cancellations have been extended until the end of June, amid some speculation the country could be travelling interstate by July.

“The initial easing of government restrictions suggests some domestic travel may start to return before the end of July -– though initial demand levels are hard to predict,” the statement from Qantas reads. “The Group will continue to monitor the situation and can increase capacity with a minimum lead time of around one week.”

The extension of international flight cancellations comes amid increasing uncertainty as to when Australians can expect to be flying overseas again. A survey of economists conducted by Finder found the majority believed international travel wouldn’t be on the cards until 2021 at the earliest –- suggesting Qantas’ effort at progressively rolling back cancellations could be merely an effort at delaying the inevitable.

Qantas also announced it had improved its travel credit system, so customers who are affected will be able to use credit for cancelled flights across multiple Jetstar or Qantas flights in future.

Qantas says it is currently burning through cash at a rate of $40 million per week.

The company announced it had secured $550 million in funding against three of its Boeing 787-9 aircraft, following the $1.05 billion it raised in March against seven 787-9s.

With net debt in the middle of the company’s target range at $5.8 billion, and the possibility of raising more funding against other planes in its stock, Qantas argues it has sufficient liquidity to handle the current punishing trade conditions until “at least December 2021”.

“Our cash balance shows that we’re in a very strong position, which under the circumstances we absolutely have to be. We don’t know how long domestic and international travel restrictions will last or what demand will look like as they’re gradually lifted,” said CEO Alan Joyce in a statement.

“Our ability to withstand this crisis and its aftermath is only possible because we’re tapping into a balance sheet that has taken years to build.”

Joyce said that the company did not anticipate travel demand would return to pre-crisis levels quickly, even if Australia manages to wind back some restrictions more quickly than expected.

“Australia has done an amazing job of flattening the curve and we’re optimistic that domestic travel will start returning earlier than first thought, but we clearly won’t be back to pre-coronavirus levels anytime soon,” Joyce said.

“With the possible exception of New Zealand, international travel demand could take years to return to what it was.”

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.