Australia's Qantas Warns of Costly Coronavirus Impact

Canberra (dpa) - Australian flagship carrier Qantas warned on Thursday it was facing a severe financial impact due to the coronavirus outbreak in China, which has led to decreasing demand for travel across Asia.

Qantas said the pandemic could cost the airline up to 150 million Australian dollars (99 million US dollars) for the financial year, largely due to cutting down flights.

The airline has reduced flights temporarily across Asia by 16 per cent until at least the end of May. Routes from Australia to mainland China, Hong Kong and Singapore are affected.

Qantas said it was cutting flights, was also sending staff on leave, freezing recruitment, and bringing forward planned maintenance of several aircraft to cope with the immediate virus fallout.

Each of Qantas' budget airlines in Asia – Jetstar Asia (Singapore), Jetstar Japan and Jetstar Pacific (Vietnam) – have suspended flights to mainland China. They are also making significant flight reductions across the region, the company said.

Earlier this month, Qantas had announced it would suspend its two direct services to mainland China until the end of March. The Sydney to Beijing route has been shut down completely, while Sydney to Shanghai will remain suspended until May.

A total of 74,576 coronavirus cases have been reported across mainland China, resulting in 2,118 deaths, since the Covid-19 first appeared in the city of Wuhan, population 11 million, in December last year.

The case has been confirmed in 26 countries across the world. Outside mainland China, there have been 10 confirmed deaths due to Covid-19.

Qantas Group chief Alan Joyce told shareholders the company has some flexibility to ride out any temporary storms.

"Coronavirus resulted in the suspension of our flights to mainland China and we're now seeing some secondary impacts with weaker demand on Hong Kong, Singapore and to a lesser extent Japan," Joyce said in a statement on Thursday.

"This is an evolving situation that we're monitoring closely," Joyce said, adding the past few months "have been extraordinarily difficult for the tourism industry."

Apart from coronavirus scare, Australia also faced a massive bush fire crisis that burned more than 12 million hectares of land.

The announcement of Qantas comes as the airline posted an interim first-half net profit slide down 3.9 per cent to 445 million dollars on Thursday, blaming the drop on the political protests in Hong Kong, higher foreign exchange costs and trade wars.

The underlying profit for the first half was 771 million dollars, or 0.5 per cent down compared to the prior corresponding period.

Qantas, also known as the "flying kangaroo," turned 99 years old in November. It is one of the oldest airlines in the world.

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