Qantas Group CEO Alan Joyce says 7500 jobs on the line after airline posts $1bn loss

After posting an eye-watering half-yearly loss, Australia’s premier airline says more pain for the industry is potentially just around the corner.

Qantas chief executive Alan Joyce believes the federal government will axe JobKeeper payments at the end of next month, potentially exposing the aviation industry to a new round of mass job cuts.

Speaking in Sydney on Thursday following the release of the company’s financial results – an eye-watering half-yearly net loss of $1.03bn – Mr Joyce said more than 7000 international flight workers were at “prime risk” of losing their jobs within the airline while uncertainty surrounded the opening of borders.

“The prime issue is going to be around 7500 people that are fully dedicated to international — they will have no work,” Mr Joyce said.

“Through no fault of theirs, (these workers) are going to be without the income that they built their lives on for a period of time without those borders opening up.”

Qantas’s crippling financial position as a result of the pandemic is a stark contrast to its $771m interim profit posted for the first half of the previous financial year.

Qantas chief executive Alan Joyce says the company is still navigating through the crisis. Picture: NCA NewsWire/Flavio Brancaleone

Mr Joyce noted the aviation sector had other ongoing financial support; however, the JobKeeper scheme to keep employees connected to their workplace is likely to end before the airline is able to resume some form of normal operating conditions.

Qantas is also expecting international travel to resume by October, in line with the nation’s scheduled vaccine rollout.

The airline intends to resume all international routes except for three – New York City, Santiago and Osaka.

Mr Joyce warned ongoing hotel quarantine systems for overseas travellers beyond the population being mass vaccinated and the easing of international borders would be a “big blockage” to Qantas and other airlines being able to generate revenue.

He noted retaining hotel quarantine once vaccines had been fully rolled out would effectively mean borders would remain closed and prevent the airline from restarting its international travel business.

“It would have a significant impact. I think we would see a very big blockage for the demand for international travel,” Mr Joyce said.

CFO Vanessa Hudson and CEO Alan Joyce. Picture: NCA NewsWire/Flavio Brancaleone

“I think what governments are talking about … it may be a choice between having a vaccination or quarantining. I don’t think people are assuming both of them would be in play.”

The airline recorded a $6.9bn drop in revenue as a result of COVID-19, representing a 75.4 per cent slump on the previous corresponding period.

Interim earnings before tax, interest, depreciation and amortisation (EBITDA) were $86m for the period.

Qantas noted its freight business had offset the heavy losses of the international flying business and its domestic operation had returned to an underlying positive cash flow position.

“Qantas Freight had a record result and has been a natural hedge to the lack of international passenger flying, which has created a shortage of cargo space globally,” Mr Joyce said.

The airline recorded a $6.9bn drop in revenue as a result of COVID-19. Picture: Supplied

The top boss of the country’s premier airline said it was still navigating the crisis, but the figures from its financial results were a “stark” but “not surprising” reality.

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

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

The airline said ongoing domestic border closures had dampened its recovery; however, the rollout of vaccines signalled that trans-Tasman bookings could begin by the middle of the year.

“The COVID vaccine rollout in Australia will take time, but the fact it’s under way gives us more certainty,” Mr Joyce said.

“More certainty that domestic borders can stay open because frontline and quarantine workers will be vaccinated in a matter of weeks. And more certainty that international borders can open when the nationwide rollout is effectively complete by the end of October.”