SYDNEY (BLOOMBERG) – Qantas Airways said travel has roared back, allowing it to cut debt and buy back shares, even as the airline posted its third consecutive annual loss.
“While the first three quarters of the year were defined by border closures and waves of uncertainty caused by Covid variants, the fourth quarter saw the highest sustained levels of travel demand since the start of the pandemic,” the airline said in a statement.
While flying levels for the year averaged 33 per cent of pre-pandemic levels, they finished at 68 per cent, the company said.
After axing more than 8,000 workers to survive the pandemic, Australia’s national airline – like peers worldwide – is struggling to deal with a faster-than-expected rebound in demand. Passengers have become exasperated with mounting flight cancellations, delays and lost bags, and Qantas is racing to hire staff again.
“We always knew travel demand would recover strongly but the speed and scale of that recovery has been exceptional,” chief executive officer Alan Joyce said on Thursday (Aug 25).
The airline announced it will buy back up to A$400 million (S$385 million) of shares. Net debt declined to A$3.94 billion, below the optimal target range of A$4.2 billion to A$5.2 billion, the carrier said.
Underlying loss before tax – the airline’s preferred gauge of earnings because it strips out one-time costs – was A$1.86 billion in the year ended June, compared with a loss of A$1.77 billion a year earlier.
Qantas earlier this week apologised for the recent chaos and offered Frequent Flyer members a A$50 discount on a return flight from Australia or New Zealand. The airline has hired more than 1,500 workers since April, filling the bulk of 2,500 vacancies. With sick leave 50 per cent higher than normal, Qantas has also cut domestic flying by more than 10 per cent.
Qantas outsourced about 2,000 ground handlers in 2020, and has this year found itself critically short of baggage handlers. The airline is so desperate it has sent head office staff to lug suitcases full time at Sydney and Melbourne airports.
Critics argue the airline cut labour and expenses too deeply during the health crisis and is hamstrung now that demand has returned.