Australia’s Qantas fell deeper into the red in its 2022 financial year, during which the “existential crisis” of the coronavirus pandemic soon gave way to a well-publicised series of operational snares.
For the year to 30 June, the Qantas Group reported an underlying loss before tax of around A$1.86 billion ($1.3 billion). This was a steeper loss compared to the 2021 financial year, where the airline group was A$1.77 billion in the red.
Group revenue was A$9 billion, higher than the previous year’s A$5.9 billion, as passenger numbers increased. Still, Qantas notes the figure is almost half the revenue reported in the pre-pandemic 2019 financial year, underscoring the long path to recovery.
While it began the financial year flying at 33% pre-pandemic capacity, group capacity now stands at 68%. Domestic flying recovered past 2019 levels at the end of fiscal 2022, coming in at 3% higher than pre-Covid levels.
Its domestic business swung to an underlying profit before tax in the April-June quarter, but posted a full-year loss, as Qantas blamed a “long period of low activity” coupled with costs incurred for network restart.
International capacity, meanwhile, rose from 17% at the start of the financial year to 49% pre-pandemic levels by 30 June. Heavy losses from the international business were offset by a record performance from Qantas’ freight division, which benefited from high yields and a rise in e-commerce demand.
Much of the airline’s current financial year was impacted by two major outbreaks – of the Delta and Omicron variants of the coronavirus – in Australia, which led to prolonged domestic lockdowns, as well as international borders remaining shut.
It was only in the April-June quarter that Australia began to reopen borders and ease pandemic-related curbs, a move that led to a surge in demand.
“While the first three quarters of the year were defined by border closures and waves of uncertainty caused by Covid-19 variants, the fourth quarter saw the highest sustained levels of travel demand since the start of the pandemic,” states Qantas.
The swing in demand in the final quarter has created a series of issues for the airline group – from long waiting times at its call centre, to mishandled luggage, and flight cancellations – as it struggled to keep up.
Airline chief Alan Joyce, in a statement alongside the release of the financial results, acknowledged the “extremely challenging time”, stating: “We’re the first to admit we haven’t gotten everything right lately.”
Adds Joyce: “The past year has been challenging for everyone. We had to ramp down almost all flying once Delta hit and stay that way for several months before ramping back up through multiple Omicron waves as we all learned to live with Covid-19 in the community. We always knew travel demand would recover strongly but the speed and scale of that recovery has been exceptional.”
The airline group, which also comprises low-cost unit Jetstar, ended the financial year with 322 aircraft, an increase of seven jets. This was largely due to the introduction of more Embraer E190s for regional operations.