Qantas says Australia virus travel curbs cost it US$71m in quarterly profit

Qantas planes are seen at Kingsford Smith International Airport, following the coronavirus outbreak, in Sydney, Australia, March 18, 2020. — Reuters pic
Qantas planes are seen at Kingsford Smith International Airport, following the coronavirus outbreak, in Sydney, Australia, March 18, 2020. — Reuters pic

SYDNEY, Oct 23 — Qantas Airways Ltd said today that Australian state border closures due to the coronavirus pandemic had cost it A$100 million (RM295 million) in earnings in the first quarter and would have a negative impact in the second quarter as well.

The airline is running less than 30 per cent of its normal domestic capacity due to border closures, having earlier expected to be operating around 60 per cent at this time, Qantas Chief Executive Alan Joyce said in a speech at the airline’s annual meeting of shareholders.

“Essentially, this is a timing issue,” he said. “We know the upswing will materialise — just later than planned.”

Joyce said if Queensland opened its borders to the country’s most populous state, New South Wales, domestic capacity could reach up to 50 per cent by Christmas.

The airline could report positive net free cashflow in the second half if all state borders opened with the possible exception of Western Australia, he said.

In New Zealand, where there are no such domestic border restrictions, Air New Zealand Ltd is operating nearly 85 per cent of its pre-pandemic capacity.

Qantas has grounded almost all of its international flights and said today around 18,000 employees remain stood down receiving government benefits rather than their usual pay.

Chairman Richard Goyder said there were some positive signs around “travel bubbles”, starting with New Zealand, that could result in it flying to destinations it did not serve before Covid-19, such as South Korea, Taiwan and various Pacific islands.

The airline is on track to meet its target of A$1 billion a year of ongoing annual cost savings from the 2023 financial year, Joyce said, with A$600 million of that to be unlocked this financial year, ending June 30, 2021.

He added Qantas would seek to match any concessions agreed by unions for rival Virgin Australia under its new owner Bain Capital.

The carrier has previously announced plans to cut 8,500 jobs, or nearly 30 per cent of its pre-pandemic workforce. — Reuters

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