Qantas Airways has reported an annual loss of almost £1 billion as the coronavirus pandemic continues to disrupt air travel globally.
Like most airlines, Australian flag carrier Qantas Airways has been largely impacted by the decline in demand for air travel due to the coronavirus pandemic, causing it to post annual loss of almost £1 billion.
The airline also announced that approximately 4,000 of its 6,000 planned job cuts are expected to be finalized by the end of next month.
Pandemic and losses
Qantas Group chief executive Alan Joyce claims that trading conditions are the worst in the airline's 100-year history. He argued: "The impact of Covid on all airlines is clear. It's devastating and it will be a question of survival for many. Recovery will take time and it will be choppy."
Joyce also warned that he expects the airline to experience a "significant underlying loss" in the next financial year.
According to Qantas, most of the current year's loss is attributed to writing down the value of assets and redundancy payments.
As Australia's international borders remain closed and are not expected to reopen soon, the Sydney-based carrier said it also does not expect to resume international flights until July 2021 at the earliest, with the possible exception of flights to New Zealand.
Pay cuts, reduced flights
In March, Qantas announced that it will be reducing flights as well as executive pay as part of its cost-cutting measures amidst the coronavirus outbreak.
As part of the initiative, Joyce will forgo a salary while Chairman Richard Goyder will stop taking management fees. Also, the executive leadership team will take a 30% pay cut.
Most of the canceled flights will be in Asia, where the coronavirus outbreak originated and remains rampant. Flights in the region have been cut by 31% while capacity will also be reduced in the US and UK.
Qantas also mentioned that its budget airline, Jetstar, will also “make significant cuts to its international network.” The total reduction in flights represent a 23% decrease in overall capacity for the carrier.
In mid-June, the airline cancelled all international flights until late October except those to New Zealand to slow the spread of the coronavirus.
The decision by Qantas to cancel all international flights, except for New Zealand, until October comes following the Australian government’s announcement that its border would remain closed into next year to slow the spread of the coronavirus.
Meanwhile, travel restrictions within Australia are easing, allowing the airline and its subsidiary Jetstar to increase the number of their domestic flights. Qantas recorded an increase in domestic passengers from 32,000 last week to 64.000 this week.
Job cuts
The decision to make 6,000 of its workers redundant was announced by Qantas in June as part of its cost reduction initiative.
The airline said around two thirds of those redundancies would be completed by the end of September, representing about a fifth of the airline's total workforce prior to the coronavirus pandemic.
Aside from the job cuts, Qantas said that around 20,000 of its employees will remain temporarily stood down.
