Qantas (ASX:QAN) begins debt reduction in domestic travel-driven recovery

Company News

by Michael Luu

Australia’s national flag carrier Qantas (ASX:QAN) has provided a full-year outlook suggesting that the company is projected to record a loss of over $2 billion for FY21 due to pandemic restrictions.

However, the $8.5 billion company has reassured investors that the hard part is now behind it, as Qantas has “turned the corner” and begun the process of reducing debt.

Qantas has attributed the acceleration of recovery to the booming demand for national air travel, as current trajectories show that gross revenue from domestic flight services are expected to increase twofold in the next half.

The Flying Kangaroo told investors that it is on trend to restore 95 per cent pre-pandemic domestic capacity in the Quarter ending on June 30.

Australia’s largest flight operator has forecast positive statutory free cash flow for the second half of the financial year, if domestic travel conditions remain at the same level. Qantas has updated its guidance for underlying EBITDA to reach $400 million to $450 million for the full fiscal year.

Qantas has been forced to postpone the reconnection of its international air routes to the end of the calendar year, despite the Federal Budget’s prediction that international air travel will be unavailable till the end of the financial year. Qantas has justified this decision with optimism about the vaccine roll-out’s progress.

Shares in Qantas are trading 3.1 per cent higher at $4.66

 

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