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- Qantas’ (QAN) projected $16 billion revenue loss has been accompanied by calls from CEO Alan Joyce to intensify Australia’s vaccine rollout or risk being left behind
- Australia’s national airline is on track to incur a $16 billion pandemic induced total revenue loss by the end of FY21, despite an uptick in domestic travel
- Holding out for international borders to reopen, Qantas Chief Executive Officer Alan Joyce said the group had adjusted its expectation on this matter based on the government’s vaccine timeline
- Warning Australia could be left behind the U.K. and the U.S., the CEO affirmed Australia has to put the same intensity into the vaccine rollout as lockdowns and restrictions
- Qantas estimated 8500 jobs have already been lost, with more redundancies and a wage freeze to come before the end of the financial year
- Qantas shares are up 4.65 per cent following the announcement trading at $4.73
Qantas’ (QAN) projected $16 billion revenue loss has been accompanied by calls from CEO Alan Joyce to intensify Australia’s vaccine rollout or risk being left behind.
Despite an upswing in domestic travel, Australia’s national airline is on track to incur a $16 billion total revenue loss since the start of the pandemic by the end of FY21.
Conceding the group had a “long way still to go in this recovery”, Qantas advised it had shifted its expectations for when international borders open based on the government’s vaccine rollout timeline. This was recently described by Prime Minister Scott Morrison as an aspiration and not a promise.
As of May 18, roughly 3.2 million single vaccine doses had been administered according to the Australian Department of Health.
Qantas Chief Executive Officer Alan Joyce affirmed the company’s fundamental assumption remained the same.
“Once the national vaccine rollout is effectively complete, Australia can and should open up,” the CEO said.
“Australia has to put the same intensity into the vaccine rollout as we’ve put on lockdowns and restrictions, because only then will we have the confidence to open up.
“The risk then flips to Australia being left behind when countries like the U.S. and U.K. are getting back to normal.”
In a bid to keep costs down in the interim, Qantas flagged a two year wage freeze on the next round of enterprise agreements across the group and to management.
There’s also more redundancies to come after 8500 jobs have already been lost, with Qantas set to offer voluntary redundancy to its international cabin crew, potentially cutting a further several hundred staff.
In some respite for the ASX200-lister, corporate travel returned to 75 per cent of pre-covid levels and domestic capacity is expected to draw closer — around 90 per cent— on pre-covid levels as travellers forgo international holidays for multiple domestic trips.
Assuming there are no further lockdowns or significant domestic travel restrictions, QAN affirms its Underlying EBITDA (earnings before interest, taxes, depreciation and amortization) will clock in around the $400 to $450 million range but still anticipates a statutory before tax loss in excess of $2 billion.
Qantas shares are up 4.65 per cent following the announcement, trading at $4.73 at 2:07 pm AEST.
