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Qantas announces devastating $2.3B loss

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The Qantas Group has posted its full year results for 2021, which indicates substantial losses of $1.83 billion before tax

The Qantas group has just released it full year results for this year, and the results are devastating.

The major airline has reported a massive loss of $1.83 billion before tax, or $2.35 billion after. The airline has already lost $12 billion as a result of the Covid-19 crisis.

Qantas CEO Alan Joyce said this morning, “total revenue lost since the start of the pandemic rose to around $16 billion – and it’s likely to exceed $20 billion by the end of this year.”

“International borders were essentially closed for the whole year, and there were only about 30 days when we didn’t face some level of domestic travel restrictions,” he added.

“These are big numbers. And they sum up what continues to be very tough time for this industry, this company, and our people.”

Alan Joyce

“When travel demand does return, we’ll be performing at a level that repairs the balance sheet quickly”

Despite sporadic border changes, the airline says that 95% of its domestic flying has remained cash positive, and its maintained a domestic market share of around 70%.

“Strategically, our position has never been clearer or stronger,” said Joyce.

Qantas also reported profits in its freight division driven by international yields. This can mostly be attributed by a growth in online shopping.

“This performance – in trading conditions that were frankly diabolical – gives us a lot of confidence about how the Qantas Group is going to perform as we put lockdowns behind us in the next few months.”

Alan Joyce

CEO stresses importance of vaccination for financial recovery

Joyce said that Australia’s national vaccine rollout “is key” to Qantas’ recovery.

“Getting more people vaccinated is critical to Australia opening up, and getting our planes and people back in the air,” he said.

The airline has already made it a requirement for all employees to get the jab. 80 percent of Qantas employees have already been vaccinated. This comes as other airlines penalise vaccinated employees.

Qantas is also looking to incentivise customers to get the vaccination by offering free Frequent Flyer points, status credits and flight discounts.

When will international travel reopen in Australia?

Joyce did deliver some positive news for Australians wanting to travel overseas, saying that he expects Qantas to resume international flights to countries with high vaccination rates from mid December. This will include Singapore, Japan, the US, the UK and New Zealand.

Flights to other destinations where the vaccination rate is lower will restart from April 2022 “at the earliest”. This will include Bali, Manila, Jakarta and Johannesburg.

Joyce said that the “biggest unknown” will be the quarantine requirements for reentering Australia.

“If it’s 14 days in a hotel, demand levels will be very low,” he said.

“We’re in regular discussion with the government and have shared our plans with them. While they don’t have a crystal ball either, they agree our broad assumptions are reasonable.”

Natasha is an Associate Producer at ticker NEWS with a Bachelor of arts from Monash University. She has previously worked at Sky News Australia and Monash University as an Online Content Producer.

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Business

The “day of reckoning” for startups is here

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The collapse of Silicon Valley Bank has uncovered the truth about the startup sector. What rose from the ashes of the GFC is now a bubble about to burst.

 
We are going to start right back in 2008. Remember the Global Financial Crisis? it was meant to have huge ramifications for the banking sector – And after all the collapses, all the redundancies, all the pain – we were told it could never happen again.

Well just a few weeks ago, the very foundations of our banking system were called into question – again.

Silicon Valley Bank may not be the world’s biggest, or even America’s biggest – but it did punch above its weight. Why? Because of its title. It was literally the bank of Silicon Valley.

The past 16 years have been extraordinary for the startup sector. Enormous growth multiples that defied the rest of Wall Street.

That is – until the music stopped in the investment community. All these startups that believed you could be worth a billion dollars on the back of buzz suddenly realised the money had run dry.
It’s now about good old-fashioned profit. It had to happen some time.

But it happened right after COVID – and right before all that stimulus money washing around the community had to be taken back. Interest rates had to rise, and suddenly all these startups had to withdraw their cash to survive.

Central Banks now find themselves at a horrible crossroads. Keep raising rates to fight inflation, but risk financial instability.

The job of central bankers is to keep banks stable. But in order to keep them stable, they have to raise rates to combat inflation, and the unintended consequences about that hit really hard.

The central banks are now contradicting themselves. To create stability, they have to create instability. It’s the problem with their blunt instruments.

Let’s take Silicon Valley Bank – More expensive money reduced the value of their securities portfolios and has made it likelier that depositors will flee to the big banks.

Did you hear that? So after creating the conditions that led to too much money in the economy, to now raising rates to claw it all back, that now led to instability in the financial system – the Fed doesn’t want to know.

Let’s bring it back to the poor depositors of Silicon Valley Bank – It’s a nightmare out there in startup land.

Economic fear and funding uncertainty has put startup-founder mental health in a tailspin. Many suffer in silence because they worry that talking about it will worry investors that the sector is in trouble.

The startup economy of today is eerily similar to the banking sector of 2007 right before the financial crisis – with companies dangerously close to the edge. #Silicon Valley bank #svb #credit suisse #fed reserve #silicon valley

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Business

Accenture to axe 19,000 jobs

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The tech consulting firm says economic conditions have brought on the move

Accenture has announced it will be slashing 19,000 jobs at the tech consulting firm.

It’s all part of a proposal to cut costs to deal with a tight economic environment.

The company says it won’t put a freeze on hiring despite 2.5 per cent of staff departing in the next 18 months.

In a statement, the company says “there continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business.”

The company is expecting annual revenue growth to be up to 10 per cent for this year, which is a slight downgrade on pervious estimates.

The axing comes amid Meta and Amazon are downsizing their workforce.

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Business

Etihad Airways in trouble over emissions reduction plans

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Australia’s consumer watchdog is considering action

Etihad Airways is in hot water over allegations it lied about its emissions reduction plans.

Australia’s consumer watchdog is now considering action against the airline as the body crackdown on so-called greenwashing.

It follows two Etihad advertisements that appeared on digital advertising banners during a football match at Melbourne’s AAMI Park on 15 February last year.

The ad had the words “net zero emissions by 2050” next to its logo.

In another commercial, the airline claimed “Flying shouldn’t cost the Earth”.

Flight Free Australia claims the ads convey the misleading impression that flying with Etihad does not have a significant environmental impact and Etihad intends to achieve net zero by 2050.

But the group says middle eastern airline has no credible path to net zero emissions by this date and it is not “technologically, practically, or economically feasible” to reach this goal.

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