• Qantas has revealed an interim loss of $1.08 billion, after the airline was hamstrung by domestic and international border closures.
• The loss represents a 75% drop from the previous corresponding period, speaking to the severity of COVID-19 restrictions.
• But the group says it now expects international flights to rebound from October this year.
• Visit Business Insider Australia’s homepage for more stories.

Qantas has reported a grim loss of $1.08 billion for the half-year leading to December 31, with the airline revealing a $6.9 billion drop in revenue.

The carrier’s interim report states revenue dove 75% from the previous corresponding period, thanks to the domestic and international travel restrictions which kept much of its fleet grounded through 2020.

“These figures are stark but not surprising,” Qantas CEO Alan Joyce said in a statement.

“During the half we saw the second wave in Victoria and the strictest domestic travel restrictions since the pandemic began.

“Virtually all of our international flying and 70 per cent of domestic flying stopped, and with it went three-quarters of our revenue.”

Qantas’ international operations faced an underlying EBITDA loss of $86 million, which ballooned to $549 million when taking depreciation and amortisation into account.

While domestic operations through Qantas, QantasLink and JetStar clocked an underlying EBITDA of $71 million, depreciation and amortisation drove that figure to a $407 million loss.

The group’s plan to save some $600 million in the 2021 financial year continues unabated, with the airline saying it has now carried out 5,000 of an estimated 8,500 job cuts.

But the airline also reported some positive signs. Qantas said it maintains $4.2 billion in available cash, with that figure expected to rise as Australia’s vaccine rollout continues.

The jab will provide “more certainty that domestic borders can stay open because frontline and quarantine workers will be vaccinated in a matter of weeks,” Joyce said.

That confidence will be well-received by the airline, which estimates border closures over December 2020 — its peak travel period — will result in a EBITDA loss of up to $450 million.

The airline also said it believes regular international flights will be operational from October 31, representing a four-month pushback from its earlier estimate of July 2021.

The quasi-religious power of Qantas’ loyalty program was also demonstrated through the crisis, with an underlying EBIT of $125 million — down 29% from pre-pandemic levels, but still remarkably strong given the financial crunch associated with coronavirus lockdowns.

“A further spike [in Frequent Flyer point use] is expected once international travel resumes, which will also drive earnings,” Qantas said.

“Despite the huge challenges, these results show the Group’s underlying strength,” Joyce said.

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