Qantas financial results 2020: Profit plunges to a $2.7bn loss

qantas 737

Qantas has registered a $2.7bn loss as a direct result of the corona virus pandemic

In what has been the most challenging period in its long history, the Qantas Group reported a $124 million Underlying Profit Before Tax for the 12 months ended 30 June 2020, down 91 percent on the prior year.

This reflects a strong first half of the year followed by a near-total collapse in travel demand and a $4 billion drop in revenue in the second half due to the COVID-19 crisis and associated border restrictions.

Qantas Group CEO Alan Joyce said the second half of FY20 was the toughest set of conditions the national carrier had faced in its 100 years – but that it had the resilience to deal with them.

“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.

“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,” added Mr Joyce.

Fast action to radically cut costs and place much of the flying business into a form of hibernation helped minimise the financial impact from this extraordinary sequence of events. From April to the end of June, Qantas Group revenue fell 82 percent while cash costs were reduced by 75 percent, helping to limit the drop in Underlying Profit Before Tax in 2H20 to $1.2 billion.

At the statutory level, Qantas reported a $2.7 billion Loss Before Tax –– due mostly to a $1.4 billion non-cash write-down of assets including the A380 fleet and $642 million in one-off redundancy and other costs as part of restructuring the business for recovery.

Despite significant uncertainty across most markets, Qantas says it remains well-positioned to take advantage of the eventual return of domestic and, ultimately, international travel demand. In the meantime, Qantas Freight and Qantas Loyalty continue to generate significant cash flow and charter operations for the resources sector are performing strongly.

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