Qantas Airways delayed plans to restart most international flights by four months until late October, in line with the country's vaccination programme completion, after swinging to a first-half loss due to Covid-19 travel restrictions.
The carrier posted an underlying loss before tax of A$1.03 billion ($820.4 millon) in the six months ended December 31, compared to a profit of A$771m a year earlier, it said in a statement on Thursday. Half-year revenue dropped 75 per cent year-on-year to A$2.33bn.
"These figures are stark, but they won’t come as a surprise," Alan Joyce, Qantas group chief executive, said. "Border closures meant we lost virtually 100 per cent of our international flying and 70 per cent of our domestic flying."
The Covid-19 pandemic has ripped through the aviation industry in an unprecedented manner. The outlook for global airlines is deteriorating as governments impose tighter lockdowns to curb an increase in infection rates and new virus variants, the industry's main lobby group said.
Qantas said it has a high level of liquidity because of cost-cutting measures and raising debt and equity, giving it "breathing room" to deal with uncertainty and funding for restructuring.
Its total liquidity stood at A$4.2bn as of December 31, which included total cash of A$2.6bn and committed undrawn facilities of A$1.6bn. Net debt stood at A$6.05bn
Qantas said it is planning to restart regular international passenger flights to most destinations from October 31– a four month delay from the previous estimate of July.
"The date change aligns with the expected timeframe for Australia’s Covid-19 vaccine rollout to be effectively complete," the airline said.
Qantas is planning to resume flights to 22 of its 25 pre-pandemic international destinations including Los Angeles, London, Singapore and Johannesburg from October 31.
The airline is still planning for a "material increase" in flights in the Australia-New Zealand travel corridor from July 1, Mr Joyce said.
A full recovery in international capacity is not expected until 2024, according to the airline.
As part of its three-year plan to deal with the Covid crisis, the airline will axe 8,500 jobs, with another 7,500 to be stood down until international travel recovers, Mr Joyce said.
The airline's three-year recovery plan will deliver at least A$1bn in permanent annual savings from the 2023 fiscal year onwards, Qantas said. An interim target of $600m in permanent savings for fiscal year 2021 remains "on track".
Looking ahead, the carrier expects the group's domestic capacity to increase to 60 per cent of pre-Covid levels in the third quarter and 80 per cent in the fourth quarter.
Group international capacity is currently at approximately 8 per cent of pre-crisis levels and unlikely to materially increase during in the second half, it said.
Net debt is expected to peak in the second half and the repair of its balance sheet to begin in the fourth quarter, it said.
AUSTRALIA SQUAD
Steve Smith (capt), David Warner, Cameron Bancroft, Jackson Bird, Pat Cummins, Peter Handscomb, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Shaun Marsh, Tim Paine, Chadd Sayers, Mitchell Starc.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
RESULTS
6.30pm Handicap (TB) $68,000 (Dirt) 1,200m
Winner Canvassed, Par Dobbs (jockey), Doug Watson (trainer)
7.05pm Meydan Cup – Listed Handicap (TB) $88,000 (Turf) 2,810m
Winner Dubai Future, Frankie Dettori, Saeed bin Suroor
7.40pm UAE 2000 Guineas – Group 3 (TB) $125,000 (D) 1,600m
Winner Mouheeb, Ryan Curatolo, Nicholas Bachalard
8.15pm Firebreak Stakes – Group 3 (TB) $130,000 (D) 1,600m
Winner Secret Ambition, Tadhg O’Shea, Satish Seemar
9.50pm Meydan Classic – Conditions (TB) $$50,000 (T) 1,400m
Winner Topper Bill, Richard Mullen, Satish Seemar
9.25pm Dubai Sprint – Listed Handicap (TB) $88,000 (T) 1,200m
Winner Man Of Promise, William Buick, Charlie Appleby
