The Qantas Group has posted its third consecutive Statutory Loss Before Tax of more than $1 billion, reflecting the Delta and Omicron impacts as well as upfront costs from restarting the airline as lockdowns finally ended.
For the full 2022 financial year, the Group experienced an Underlying Loss Before Tax of $(1.86) billion and a Statutory Loss Before Tax of $(1.19) billion. The difference between these two measures largely reflects the $686 million net gain on the sale of surplus land, which helped reduce COVID-related debt.
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. Overall, the Group’s flying levels for the year averaged 33 per cent of pre-pandemic levels but finished at 68 per cent.
Group Domestic operations were profitable at the Underlying EBIT level in 4Q22, while Qantas Freight posted another record annual performance and Qantas Loyalty accelerated its earnings growth to double digits in the second half.
The reopening of borders saw a huge increase in forwarding travel demand, which when combined with the Group’s recovery plan, has resulted in a significant improvement to the balance sheet. Net debt has fallen from a high of more than $6.4 billion to $3.9 billion at the end of FY22, putting it below the optimal target range of $4.2 billion to $5.2 billion.
With the existential crisis posed by the pandemic now over, the Group is focused on responding to current operational challenges. Key customer measures for Qantas including contact centre wait times, cancellation rates and mishandled bag rates are trending back towards pre-COVID standards during August 2022.
There has been a significant improvement in on-time performance, which lifted from 52 per cent in July to 66 per cent in August (to date). This is expected to reach 75 per cent in September and around 80 per cent in October 2022, pending external factors such as extreme weather.
Qantas Group CEO Alan Joyce said: “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.
“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 in the community.
“We always knew travel demand would recover strongly but the speed and scale of that recovery have been exceptional. Our teams have done an amazing job through the restart and our customers have been extremely patient as the whole industry has dealt with sick leave and labour shortages in the past few months.
“Safety remains number one, but our service isn’t at the level expected of the national carrier. There is a lot of work happening to bring us back to our best, including hiring more people, rolling out new technology and reducing domestic flying so we have more sick leave cover.
“We saw a big improvement in baggage handling and cancellations in August, which we expect will return to pre-COVID standards next month. The on-time performance also improved significantly and should be close to our usual high standard in September.
“We’re even more confident in the future than we were six months ago, so today we’re announcing more investment in our people and our customers, including a major boost to staff travel benefits, new routes and new lounges. We’re also announcing the first capital return for shareholders since they provided us $1.4 billion at the start of the pandemic to support our Recovery Plan.”
