Airlines ‘Down Under’ posts losses on COVID pain

Australian flag carrier Qantas on Thursday (24 February) reported a A$1.28 billion underlying loss for the six months to December 31, worse than its A$1 billion first-half loss last year, as flying activity fell to just 18 percent of pre-COVID levels. Qantas boss Alan Joyce says the Omicron COVID-19 wave has set the airline’s pandemic recovery back by six months and expects domestic and international travel demand to return more slowly than previously anticipated. Joyce said that with most of Australia in lockdown during parts of the half, the result “isn’t surprising, but it is frustrating”, adding there had been a “sharp uptick” in international bookings and improved domestic demand in recent weeks. However, the group cut both domestic and international capacity forecasts for the June quarter across both its Qantas and Jetstar brands. Qantas CEO Alan Joyce. (PHOTO: Qantas) Domestic flying would be 90 to 100 percent of pre-COVID levels, down from earlier expectations of 114 percent while international flying would be 44 percent, down from 60 percent, as major markets such as New Zealand, Indonesia, Japan, Hong Kong and China delayed opening their borders. “There’s no doubt Omicron … did slow down that recovery and there is a tail effect on this,” Joyce said.“It’s pushed everything out by about six months from where we thought we would be.” The Omicron wave will cost Qantas A$650 million in the June half, and another A$180 million from “inefficiencies” such as bringing all staff back to work even while passenger numbers lagged. Air New Zealand half-year loss (PHOTO: Shutterstock) Air New Zealand reported a statutory loss before taxation of NZ$376 million which includes a NZ$9 million loss from other significant items like aircraft impairment and foreign exchange losses on uncovered debt for the six-month period ended 31 December 2021. The result reflects the substantial impact the COVID-19 pandemic continues to have on the airline. This compares to a statutory loss before taxation of NZ$105 million for the same period last year. Continued restrictions on international travel, the national lockdown which commenced in August 2021 and the extended period of travel restrictions for the Auckland region saw the airline’s operating revenue decline 9 percent to NZ$1.1 billion in the period. Passenger flying was down 26 percent from the corresponding period in financial year 2021 and was down 84 percent compared to pre-COVID levels. Air New Zealand CEO Greg Foran. (PHOTO: Air New Zealand) Chief Executive Officer Greg Foran says limited international travel on top of local lockdowns in the first half of the financial year had a huge impact on this interim result. “The airline has typically derived two-thirds of its revenue from its international passenger network and much of that was effectively grounded for the majority of the first half.” Compared to 2020 and 2021 which saw shorter, sporadic lockdowns, the longer lockdown and Auckland border restrictions contributed to the loss in the first half and an extremely challenging time for the airline’s 8,400 employees. Despite the remaining uncertainty around future travel demand and ongoing impacts on financial performance, Foran can see light ahead for the airline. “Looking at what is happening around the world and at home, we can see the path back to the revive phase of our Survive, Revive, Thrive plan. We have the right strategy, the right people and we are ready to fly. We’re excited about welcoming Kiwis home in the coming days and months and international travellers back to New Zealand later in the year. We’re bringing back approximately 250 cabin crew and pilots and have reanimated one of our Boeing 777-300s to do some of the cargo heavy lifting. Looking further out to the end of this calendar year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York City. As we continue operating through COVID, we know safety and well-being is even more important to our customers. There are a number of actions we have taken in this area, including vaccine requirements for international and domestic travel, and continuously updating our procedures to keep people safe onboard,” said Foran. Sydney Airport posts loss (PHOTO: Shutterstock) Sydney Airport reported a A$97.4 million half-year loss in the six months to 30 June 2021, as negotiations continue to secure the airport’s sale to a consortium of funds. The airport said the COVID-19 pandemic and the closure of domestic borders through the second half of the reporting period hurt results and its revenue declined by 33 percent. The airport earned A$341 million in revenue between January and June 2021, a declined of 60 percent from its June-December 2020 results. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]