The highly anticipated FY22 results from Australia’s national carrier Qantas (ASX:QAN) were released this morning, with the report indicating operations were impacted heavily by COVID-19.

For the year, the airline group’s underlying EBITDA fell to $281 million from $410 million the year prior, underlying loss before tax worsened to $1.859 billion, which is well above analysts’ expectations for a $1.3 billion loss. Group capacity returned to 33% of pre-COVID levels for the financial year and reached 63% in the fourth quarter.

On a positive note, Qantas’s revenue increased to $9.1 billion and declared a $400 million on-market share buy-back.

Investors may be disappointed to see that the flying kangaroo didn’t announce a dividend for FY22. The airline also managed to cut net debt in FY22 to $3.94 billion.

Qantas CEO Alan Joyce’s move to offer $50 flight discounts for frequent flyers earlier this week has also been met with mixed opinions, with some deeming the vouchers as a stunt aimed at masking the company’s decision to lay off over 1600 workers to outsource labour over the last year.

Looking at the airline on a group-by-group level, Qantas Domestic reported fourth quarter capacity averaged 98% and revenue jumped to $3.4 billion.

Qantas international also experienced revenue more than doubling over FY22 and the launch of new flight routes to Delhi and Rome were launched during the year. Jetstar’s revenue only increased slightly over the year, while its underlying EBITDA worsened.

In terms of a return to profitability, group domestic operations returned to profitability in Q4 FY22.

The airline provided FY23 outlook including the expectation to have lower group international revenue with group international capacity averaging 75% of pre-COVID levels. Fuel cost for FY23 is expected to be $5 billion, driven by an approximately 60% increase in fuel prices compared to FY19.

Interestingly, the airline didn’t provide financial guidance for FY23 for its domestic, international or Jetstar units, while only predicting Qantas Loyalty Underlying EBIT is predicted to increase to $425 million to $450 million for the new financial year.

The COVID-impacted airline also detailed a three-year recovery plan including the goals to reduce gross debt to $1.3 billion, restructure cost benefits and group unit costs to hit 10% less than FY19 and FY20.

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