Australian flag carrier Qantas has racked up cumulative losses of almost AUD7 billion ($4.8 billion) from the pandemic but sounded a positive note with news of a new route, a share buyback and plans to replace its A330 fleet.
The Qantas Group posted a full-year underlying pre-tax loss of AUD1.86B ($1.26B), its third consecutive major loss from the pandemic, while its in statutory loss before tax for the full financial year of 2022 came in at AUD1.19B ($897,000) . The airline said that the difference between these two measures largely reflects the $686 million net gain on the sale of its surplus land, which was used to reduce COVID-related debt.
The airline’s flying levels for the year averaged at 33% of pre-pandemic levels but finished at 68%. This was due to border closures and waves of COVID-19 variants gripping the first three quarters of the financial year, while the last quarter saw the highest levels of travel demand since the start of the pandemic.
“This result takes the Statutory Loss Before Tax impact of COVID on the Qantas Group to nearly $7 billion and our total revenue losses to $25 billion. These figures are staggering and getting through to the other side has obviously been tough,” Qantas CEO Alan Joyce said in a press conference on August 25, 2022.
See full financial results here.
Shares buyback
In his speech, Joyce noted that Qantas shareholders had supported the airline with AUD1.4B ($972,000) ‘on top of the billions’ the group borrowed to help Qantas recover from the crisis. But Joyce said the airline’s debt is now below target range, the best it has been in a decade. And with this, Joyce said that the group is now in a position to start repaying its shareholders.
The Qantas Group has therefore approved a shareholder return of up to AUD400 million ($278 million) in the form of an on-market share buyback.
Competition among plane manufacturers
Qantas chief financial officer Vanessa Hudson told press that the airline intends to run a competition between aircraft manufacturers to replace its aging fleet of 28 A330 aircraft in the next 12 to 18 months.
“That aircraft is heading to the end of its useful life. We will run a competition as we have done for the narrowbody fleet in the coming 12 to 18 months,” Hudson said.
A new competition could be a chance for Boeing to win an order from Qantas, which has opted recently for aircraft from rival manufacturer Airbus. In December 2021, Qantas selected the Airbus A320neo and A220 families to renew its domestic narrow-body fleet and earlier in August 2022, it announced plans to strengthen its domestic freight fleet with Airbus A321 aircraft.
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New international route and lounges
In the press conference, Joyce also announced that the airline will launch a new flight route from Auckland Airport (AKL) to New York’s John F. Kennedy International Airport (JFK) starting June 2023.
Joyce said flying to JFK via AKL would provide better connection options from more cities in Australia, before the 16-hour direct flight to the East Coast in the US.
The AKL-JFK flights will initially start at three times weekly, and will be operated by the Boeing 787 Dreamliner aircraft, with three new aircraft scheduled for delivery in 2023. Sale of seats on this route begins August 25, 2022.
“We think this route will be very popular with Australians given the opportunity to connect via Auckland and it also gives New Zealanders more choice,” Joyce said.
Joyce also announced that Qantas is investing in a lounge upgrade program, with plans to build new lounges in Adelaide, Auckland, Port Hedland and Rockhampton.
Qantas currently has 35 domestic lounges and 16 lounges at international airports globally, including in Australia.
New cabin crew training center
Joyce also highlighted in the press conference that with Qantas embarking on a recruitment drive for regional, domestic and international crew members, the airline recently opened a new cabin crew training facility at its headquarters in Mascot, Sydney.
Called ‘The Longreach Center’, the facility can train up to 200 cabin crew per day. It features First, Business and Economy aircraft cabins and galleys where new recruits and existing crew undergo service training.
The announcement came days after Qantas also confirmed that it will open a new flight training center in Sydney by year 2024.
Concluding his speech, Joyce said that the aviation industry has been ‘sorely tested’ by the pandemic and that the company is ‘first to admit we haven’t gotten everything right lately’. Joyce said however, that given the plans Qantas has, ‘it will get better from there.’