Qantas profits have dropped by 91 per cent in what the Australian carrier called “the most challenging period in its long history” in its 2020 financial year results released today.

The airline reported a statutory loss before tax of A$2.7 billion and an underlying profit before tax of A$124 million.

Qantas adds that it had a strong first half of the year (A$771 million underlying profit before tax) followed by a “near total collapse in travel demand” and a A$4 billion drop in revenue in the second half.

The airline also announced plans to cut 6,000 jobs due to the coronavirus crisis. Around 4,000 of its 6,000 planned job cuts are expected to be finalised by the end of next month, added the carrier.

Qantas Group CEO Alan Joyce said the second half of the 2020 financial year was the toughest set of conditions the national carrier had faced in its 100 years.

“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,” said Joyce.

“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,” he added.

Joyce said the 2020 financial year results showed how the Covid-19 crisis had “derailed” what would have been a strong financial performance.

“We were on track for another profit above A$1 billion when this crisis struck. The fact that we still delivered a full year underlying profit shows how quickly we adjusted when revenue collapsed,” said Joyce.

“Covid will continue to have a huge impact on our business and we’re expecting a significant underlying loss in FY21.”

Qantas says planned net capital expenditure was reduced by A$400 million in the second half for a total of $1.6 billion for FY20.

The airline adds that “significant further reductions are forecast in FY21” with the deferral of B787-9 and A321neo deliveries to meet the airline group’s requirements.

More than 100 Qantas aircraft are now in storage. The airline says its A380 fleet will be “on the ground for years”.

The airline group has scheduled 20 per cent of its pre-Covid domestic capacity for August.

The carrier says international flights are still unlikely to restart before July 2021, but possibly earlier for Trans Tasman.