Home English News Business Qantas to up cost-cutting drive as cashflow turns positive

Qantas to up cost-cutting drive as cashflow turns positive

Qantas to up cost-cutting drive as cashflow turns positive

SYDNEY,: Qantas Airways Ltd on Thursday announced fresh cost-cutting initiatives to help it weather the coronavirus crisis but said its debt levels had peaked and were beginning to reduce as it swung to a cash-flow positive position in the second half.

The airline said it would report a loss before tax of more than A$2 billion ($1.5 billion) in the financial year ending June 30 due in part to aircraft impairments and redundancy payments.

However, annual underlying earnings before interest, tax, depreciation and amortisation are forecast at a positive A$400 million to A$450 million, the airline said in a market update.

Debt levels peaked at A$6.4 billion in February and are expected to fall below A$6.05 billion by June amid a rebound in domestic travel to near-normal levels, the airline said.

“The fact we’re making inroads to the debt we needed to get through this crisis shows the business is now on a more sustainable footing,” Qantas Chief Executive Alan Joyce said in a statement.

The airline announced fresh cost-cutting initiatives including a two-year wage freeze, slashing commissions to travel agents on international tickets and offering voluntary redundancies for cabin crew in its international division.

Qantas has pushed back the sale of international tickets with the exception of New Zealand to December from October previously after the Australian government forecast it would not open the borders to widespread travel until mid-2022.

The airline said its international arm was burning around A$3 million of cash a week, down from A$5 million last month, due to the opening of two-way quarantine-free travel to New Zealand and strong cargo demand.

Domestic capacity is expected to reach 95% of pre-pandemic levels in the quarter ending June 30 and to top its pre-COVID performance in fiscal 2022.

($1 = 1.2953 Australian dollars)

– Reuters

Source link