Alan Joyce says it is the national carrier’s toughest six months in its 100-year history.
Its 2019/20 profit plunged 91 per cent and Mr Joyce warns this financial year will again be a tough one, with international travel unlikely before July 2021.
But he remains positive about the outlook for Qantas and its Jetstar subsidiary following its restructuring and once restrictions are eased domestically and internationally.
“The Flying Kangaroo wings are clipped for now but it’s still got plenty of ambition and we plan to deliver on it,” Mr Joyce told reporters on Thursday.
The airline reported an underlying profit before tax of $124 million for the 2019/20 financial year compared with $1.33 billion the year before.
“The impact of COVID on all airlines is clear,” he said.
“It’s devastating and it will be a question of survival for many.”
Finance Minister Mathias Cormann said the aviation sector was the the first to be hit by the pandemic.
“The aviation sector remains very much on the frontline when it comes to the economic impact of this coronavirus pandemic,” Senator Cormann told reporters in Perth.
The final result reflected a strong first half of the year when it had scored a $771 million pre-tax profit before a near-total collapse in travel demand and a $4 billion drop in revenue from the pandemic.
But Moody’s Investors Service vice president Ian Chitterer said Qantas, even when it was making record earnings for a number of years, had prioritised its balance-sheet strength and liquidity.
“The coronavirus outbreak has shown the benefit of this prudence,” Mr Chitterer said.
The airline’s shares were down 1.5 per cent in early afternoon trading at $3.705, but were above the day’s low of $3.67.
The national carrier’s statutory net loss was $1.96 billion.
On a pre-tax basis, the loss was $2.7 billion, including $1.4 billion in asset writedowns and $600 million in redundancies.
Its A380 aircraft are in long-term storage in the US and its 747s have been retired six months ahead of schedule.
“We are sadly progressing reductions of our workforce and 4000 people will leave the organisation by the end of September,” Mr Joyce said.
“Despite the recent setbacks, we know conditions will ultimately improve and the hard decisions we’ve made so far are about making sure that the Qantas Group is ready to take part in that recovery.”
But unions were unimpressed, accusing the airline of putting profits before its people and claiming it owes some 6000 workers between $1500 and $2000 in bonus payments first announced two years ago.
“We’re calling on Qantas to put its hand into its giant $124 million wallet to pay workers what they are owed,” Australian Services Union assistant national secretary Linda White said.
The carrier says given current border restrictions, 20 per cent of pre-COVID domestic capacity is scheduled for August.
However, recent sales activity shows there will be high demand when those restrictions are eased.
But the company’s international network is unlikely to restart before July 2021, although the trans-Tasman route could start earlier.