Qantas profits plunge 91 per cent due to coronavirus

Australia’s premier airline has posted a loss of $1.97 billion in what it has described as “the most challenging period in its long history”.

Qantas profits have plunged 91 per cent in what the premier airline has called “the most challenging period in its long history”.

In its 2020 financial year results released on Thursday, the airline recorded a statutory loss after tax of $1.97 billion.

Qantas confirmed the loss of at least 6000 permanent jobs due to the ongoing financial blows caused by the coronavirus pandemic.

CFO Vanessa Hudson and CEO Alan Joyce at the Qantas press conference. The company has reported a statutory loss of $1.97 billion. Picture: NCA NewsWire/Flavio Brancaleone

The country’s largest airline said the near total collapse of the aviation industry had caused a $4 billion revenue plunge due to the loss of ticket sales since the end of March.

Qantas chief executive Alan Joyce said the pandemic has been “devastating” upon the aviation industry, with most airlines coming back from the crisis a lot smaller in size.

“Recovery will take time and it will be choppy,” he said.

“We’ve already had setbacks with borders opening and then closing again.”

Qantas chief executive Alan Joyce said the pandemic has been “devastating” upon the aviation industry. Picture: NCA NewsWire/Flavio Brancaleone

Mr Joyce said if the COVID-19 shutdown did not happen the airline would have made a profit for the 2020 financial year of more than a $1 billion.

Qantas’s statutory loss represents a 333.8 per cent slump compared to the 2019 financial year, predominantly caused by a $1.4 billion writedown in the value of its assets, including the devaluation of its A380 fleet. Redundancies cost the company about $600 million.

Mr Joyce said the A380 fleet would likely be grounded for a further three years after the crisis, while its 787 Dreamliner fleet had been placed in long-term storage.

Removing one-off costs and impairments, the company booked an underlying profit before tax of $124 million, a 91 per cent decline on the previous year.

The aviation industry has come to a complete halt due to the coronavirus pandemic. Picture: NCA NewsWire/Andrew Henshaw

“We’ve had to make some very tough decisions in the past few months to guarantee our future,” chief executive Alan Joyce said.

“At least 6000 of our people will leave the business through no fault of their own, and thousands more will be stood down for a long time.”

An additional 20,000 employees will remain stood down.

The airline expects the significant contraction of Virgin Australia and it ditching low-cost carrier Tigerair will result in Qantas growing its domestic market share from 60 to 70 per cent.

Virgin Australia has ditched low cost carrier Tigerair. Picture: Tigerair

Qantas has collected $267 million in JobKeeper payments, with the majority paid to stood-down workers and the rest to subsidise salaries for staff still working.

Mr Joyce also called for a national framework for state border closures, saying there were no clear guidelines about when the state lines would reopen.

“There are no rules about how borders are going to close and going to open,” Mr Joyce said.

“We need to have a framework for what will allow them to open, to give certainty to the tourism industry.”

Australian Services Union claims Qantas owes approximately 6000 workers between $1500 and $2000 each.

“The amount owed to workers is a fraction of the profit result — it is time to pay workers what they are owed,” ASU assistant national secretary, Linda White said.

“For someone who has received very little income and has debts accumulating, $1500 or $2000 can be the difference between getting food on the table or paying your mobile phone bill.”