The airline on Dec. 3 forecast domestic capacity would reach 68% of pre-pandemic levels in December and nearly 80% in the March quarter before a pre-Christmas outbreak of COVID-19 cases in Sydney that spread to Melbourne prompted other states to shut their borders.

"This latest outbreak has probably set us back three months," Qantas chief executive Alan Joyce said in an interview at the Reuters Next conference. "In the three months to end-March, our forecast now is for the third quarter for the financial year ... we will be at 60% of pre-COVID domestic capacity levels."

The Australian flagship carrier now expected to run at 80% of pre-COVID-19 domestic capacity in the three months to end-June, Joyce added.Qantas expects to post a substantial bottom-line loss for the financial year ending June 30.

The airline has grounded its international fleet until at least July because of Australia's strict pandemic-related border controls, which have led it to report far fewer cases and deaths than most developed countries.

Qantas last week opened up sales for tickets to destinations such as the United States and United Kingdom starting in July, though the Australian government said the opening of borders remained its decision.