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SYDNEY, Australia – Qantas has recorded a staggering $2.7 billion loss for the 2019/20 year, following a drop of $4 billion of revenue in the second half, it was announced by the company on Thursday.

Despite the headline figure, the Australian carrier surprisingly managed a $124 million operating profit.

The final loss figure calculations included a $1.4 billion non-cash write down of assets including the A380 fleet and $642 million in one-off redundancy and other costs as part of a restructuring.

Qantas described the past few months as the most challenging in the airline’s history.

In the first half ending 31 December 2020, the airliner made an underlying profit before tax of $770 million.

Fast action to radically cut costs and place much of the flying business into a form of hibernation helped minimise the financial impact from the extraordinary sequence of events, a company statement issued Thursday said. From April to end of June, Group revenue fell 82 per cent while cash costs were reduced by 75 per cent, helping, the company said, to limit the drop in Underlying Profit Before Tax in 2H20 to $1.2 billion.

Despite significant uncertainty across most markets, the group says it remains well positioned to take advantage of the eventual return of domestic and, ultimately, international travel demand. In the meantime, Qantas Freight and Qantas Loyalty continue to generate significant cashflow and charter operations for the resources sector are performing strongly, the company said.

“The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many. What makes Qantas different is that we entered this crisis with a strong balance sheet and we moved fast to put ourselves in a good position to wait for the recovery,” Qantas Group CEO Alan Joyce said Thursday.

“We’ve had to make some very tough decisions in the past few months to guarantee our future. At least 6,000 of our people will leave the business through no fault of their own, and thousands more will be stood down for a long time.”

“Recovery will take time and it will be choppy. We’ve already had setbacks with borders opening and then closing again. But we know that travel is at the top of people’s wish lists and that demand will return as soon as restrictions lift. That means we can get more of our people back to work,” Joyce said.

“COVID is reshaping the competitive landscape and that presents a mix of challenges and opportunities for us. Most airlines will come through this crisis a lot leaner, which means we have to reinvent how we run parts of our business to succeed in a changed market.”

The Qantas CEO said that COVID-19 would impact the airline for a long time to come. He said a significant underlying loss was expected for the current 2020/21 year.

“Looking further ahead, we’re in a good position to ride out this storm and make the most of the recovery. Our market position is set to strengthen as the only Australian airline with a full service and low fares domestic offering as well as long haul international services,” Joyce added.

Dublin, Ireland-born Joyce has been at the helm of Qantas in 2008, being previously the CEO of the group’s low-cost carrier Jetstar. He joined the Qantas group in 2000 after four years with Ansett. He previously worked with Ireland’s national carrier Aer Lingus.