Omicron costs Qantas Air $470mn in profit

Bloomberg

Qantas Airways Ltd said Omicron is delaying the airline’s recovery and eating into earnings, with international travel wallowing at less than half normal volumes for months to come.
While demand has picked up since Australia’s border reopened this month, the impact of the fast-spreading Covid variant will cost Qantas A$650 million ($470 million) of operating profit in the six months to June alone, the airline said. That’s more than the company’s total earnings in the second half of 2019 — before Covid smashed global aviation.
International capacity will be just 44% of pre-pandemic levels by the middle of this year, Qantas said. “Omicron has pushed everything out by six months,” Chief Executive Officer Alan Joyce said.
The projection underlines the lingering damage to the industry from Omicron, even as much of the world peels back border restrictions to kickstart international flights. In Asia — a key focus of Qantas’s network before the health crisis — China and Hong Kong are effectively isolated as they attempt to control the virus rather than live with it.
The pandemic has now cost Qantas over A$22 billion in lost revenue, and more than A$6 billion in income. The outlook overseas leaves Qantas facing an uneven recovery, and forces it to rely more than ever on its domestic business.
With internal borders in Australia almost entirely open, capacity on domestic routes should reach 90-100% by June. The airline has launched almost 50 new routes in the past 18 months to woo back travellers.
“The domestic picture is looking better every week,” Joyce said on the call. “Demand has started to recover as Australia adjusts to truly living with Covid.”
The airline posted an underlying loss before tax in
the six months ended on
December 31 of A$1.28 billion as coronavirus restrictions
destroyed demand. That’s worse than the loss of A$1.01 billion in the same period a year earlier.