© Reuters. Qantas planes are seen at Kingsford Smith International Airport, following the coronavirus outbreak, in Sydney, Australia, on March 18, 2020. REUTERS / Loren Elliott
By Jamie Freed
SYDNEY (Reuters) -Qantas Airways Ltd said on Thursday it was preparing to resume international travel with countries with high vaccination rates in December, sending higher stocks as it reported a narrower annual loss of A $ 1.73 million ( $ 1.262 billion).
The airline, which landed its international fleet in March 2020 due to closed borders, said it planned to recover five of its 12 super-jumbs A380 Airbus SE (OTC 🙂 from mid-2022 to fly to United States and Great Britain, one year earlier than previously planned.
It is a promising signal for travel to the Asia-Pacific region, where borders are largely closed and international travel is 95% below pre-COVID levels, although the Qantas plan depends on government decisions. and could be delayed. Shares rose 3.7% to the highest levels since April.
Australia set a target last month for 80% of adults to be fully vaccinated for a calibrated reopening of their international borders.
Currently, more than half of the population is closed due to COVID-19 outbreaks and just over 30% are fully vaccinated, although forecasts say the country could reach 80% by the end of the year as that more doses of imported vaccines arrive.
Pending government decisions, Qantas said he hoped flights would resume in countries with high vaccination rates such as Singapore, Japan, the United States, Britain and, hopefully, New Zealand from mid-December.
Flights to places with lower vaccination rates, such as Indonesia, the Philippines, Thailand and South Africa, will resume from April 2022, he added.
“One of the biggest unknowns is the quarantine requirements for fully vaccinated travelers entering Australia,” said Alan Joyce, CEO of Qantas. “If they spend 14 days in a hotel, demand levels will be very low. A shorter period with additional testing and the option to isolate yourself at home will see many more people traveling.”
The airline expects international capacity to reach 30% to 40% of pre-COVID levels in the third quarter and 50% to 70% in the fourth quarter.
It will not review an order for up to 12 Airbus SE A350 aircraft capable of making direct flights from Sydney to London until the borders are reopened, Joyce told analysts, adding that the earliest flights could start would be in 2024. or 2025.
The company will also withdraw two A380s and has delayed the delivery of three Boeing (NYSE 🙂 Co 787-9 and two A321neos per year.
Qantas reported pre-interest earnings, taxes, depreciation and amortization (EBITDA) of A $ 410 million over the twelve months ended June 30, in line with the average figure expected by 11 analysts surveyed by Refinitiv.
“Overall, with vaccination rates continuing to rise, the outlook beyond exercise 22 remains positive for Qantas, which remains a key COVID recovery stock,” Jefferies analyst told clients (NYSE 🙂 Anthony Moulder.
The legal loss of A $ 1.73 billion, including impairments and restructuring costs, was better than last year’s $ 1.96 billion.
The airline reported $ 3.8 billion in liquidity on June 30, with a $ 200 million drop from April 30.
The domestic market had performed strongly in the fourth quarter, when state borders, often closed at times of small outbreaks of COVID-19, had been largely open.
But the country’s most populous city, Sydney, has been closed since late June and the airline said this month that it was temporarily idling some 2,500 unpaid employees for at least two months as it reduced its capacity due to of the lowest demand.
Qantas said recent outbreaks and the suspension of a travel bubble with New Zealand were expected to reduce the company’s underlying EBITDA by around US $ 1.4 billion during the first half.
Domestic capacity is expected to increase to 53% of pre-COVID levels in the second quarter and then to around 110% of pre-COVID levels in the second half.
(1 $ = 1.3744 Australian dollars)
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