Qantas flags $1.1 billion HY loss, sales
Qantas is headed for a billion dollar loss but boss Alan Joyce says ticket sales are improving despite the latest coronavirus scare.
The carrier on Thursday flagged a first-half loss of more than $1.1 billion in underlying earnings is expected from a lockdown-plagued six months.
Yet leaders found positives in bookings continuing and borders reopening, as well as reduced debt.
Mr Joyce said while the Omicron variant of COVID-19 caused a slowdown in domestic bookings and a pause in overseas ones, sales had resumed.
"The news of the Omicron variant had a clear impact on people's confidence to book international trips in particular, but we haven't seen large numbers of cancellations," Mr Joyce said.
"Many customers have strong intentions to travel if their border and quarantine settings are right, and in the past few days we have seen intakes improve."
The reopening of Western Australia to interstate travellers on February 5 will restore some normality to the industry.
Qantas officials have tipped domestic flying will climb in February above pre-pandemic levels.
While the looming first-half loss will attract much attention, company leaders have reduced massive debt taken on to help the airline through the pandemic.
An $802 million sale of surplus Sydney property earlier this year has helped.
Qantas' net debt is tipped to have improved to $5.65 billion by the end of December.
Mr Joyce said the focus next year was making sure the business was cash-flow positive.
"We just need to generate cash," he said.
"For us, 2022 is not about making money. It's about generating positive cash flows and repairing the balance sheet by building revenue. We're near the debt target we set for ourselves."
Mr Joyce and his team can expect sizeable obstacles in the second half of the financial year.
Higher costs are tipped from returning all Australian-based employees to work. The airline has slashed thousands of jobs since the pandemic began to lower expenses.
The company has not stopped trying to cut costs. It aims to find $850 million in reduced costs this financial year.
Qantas also flagged tougher domestic competition next year. New airline Bonza will be among those looking to woo customers.
Meanwhile the carrier has chosen Airbus planes for its domestic fleet after a tender.
Mr Joyce said the planes were quieter and produced fewer carbon emissions.
Forty planes from the Airbus A320neo and A220 families will be ordered by the end of the financial year.
Qantas planes used for domestic flights are more narrow and have a single aisle when compared to international craft.
The value of the deal was not revealed.
ASX shares in the company were down 0.72 per cent to $4.83 at 1532 AEDT.
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