Qantas extends flight cancellations for two more months, raises more debt

(Reuters) – Qantas Airways (QAN.AX) said on Tuesday it would extend flight cancellations into June and July, and added that it secured further debt funding that should support the airline through to the end of 2021 if the coronavirus crisis prolongs.

The Australian carrier secured A$550 million ($352.99 million) in further funding against three of its Boeing 787-9 aircraft and said it could raise another A$2.7 billion from other aircraft assets if needed.

“The group has sufficient liquidity to respond to a range of recovery scenarios, including one where the current trading conditions persist until at least December 2021”, the carrier said in a statement.

The coronavirus pandemic has brought global travel almost to halt and with much of the world still facing some form of movement restrictions, it remains unclear when the uncertainty will ease.

Qantas said it expected a net cash burn rate of about A$40 million a week by the end of June. It added that as of Monday it had short-term liquidity of A$3.5 billion, including a A$1 billion facility that was undrawn.

“With the possible exception of New Zealand, international travel demand could take years to return to what it was,” Chief Executive Officer Alan Joyce said in a statement.

Last month, the company’s smaller rival Virgin Australia Holdings (VAH.AX) entered voluntary administration after being battered by the coronavirus crisis and a high debt load.