Qantas said it has seen “a significant drop in booking momentum” for international flights because of news about the Omicron variant of Covid-19 and additional travel restrictions.
Alan Joyce, Qantas Group chief executive, said: “The news of the Omicron variant had a clear impact on people’s confidence to book international trips in particular, but we haven’t seen large numbers of cancellations.
“Many customers have strong intentions to travel if the border and quarantine settings are right.”
His comments came as the Australian carrier said it expects to finish the first half of 2022 with a “materially better net debt position than it had prior to the start of Delta variant lockdowns in June”.
In a statement, it said: “This improvement was made possible by the $802 million (£434 million) sale of land in Mascot that was not core to the group’s long-term strategy and strong sales that flowed once firm opening dates for international and domestic borders were announced.”
It anticipates a “significant loss” in the first half despite the recent boost in travel activity.
“Assuming no further lockdowns or significant travel restrictions, the group expects an underlying Ebitda loss for the first half of FY22 in the range of $250 million to $300 million. (£135-162 million),” it said.
With almost all states and territories now open, the group expects domestic flying to be about 75% of pre-Covid levels by the end of December, rising to more than 100% in February 2022.
Routes to London, Los Angeles and Singapore restarted in November, enabling the group to capture “high levels of pent-up demand”.
However, the ramp-up of international capacity has been slowed by about 10 per centage points in the second half of 2022 and is now expected to be at the bottom end of the previously quoted 40-55% range of pre-Covid levels.
Joyce said: “This has been one of the worst halves of the entire pandemic, where most states had their borders closed and the majority of Australians were in lockdown.
“Fortunately, the structural changes we made earlier in the pandemic put us in a good position to weather these extremely poor trading conditions while the national vaccination rate reached a point where states started to open back up.
“We’ve significantly reduced our cost base which improves our ability to recover. We were able to switch on an initial wave of international flights in time for the accelerated border opening in November, which meant we could capitalise on pent-up demand.”
Late last month, Australia postponed its reopening to some foreign travellers because of the Omicron variant from December 1 to December 15.