Qantas group CEO Alan Joyce said the second half of the financial year was the toughest set of conditions the national carrier had faced in its 100-year history.
But he remains positive about the outlook for Qantas and its Jetstar subsidiary following its restructuring and once restrictions are eased domestically and internationally.
"The Flying Kangaroo wings are clipped for now but it's still got plenty of ambition and we plan to deliver on it," Mr Joyce told reporters on Thursday.
The airline reported an underlying profit before tax of $124 million for the 2019/20 financial year compared with $1.33 billion the year before.
"The impact of COVID on all airlines is clear," Mr Joyce said on Thursday morning.
"It's devastating and it will be a question of survival for many."
It had scored a $771 million pre-tax profit in the first half of the year before things fell apart.
"[The results] reflect a strong first half of the year, followed by a near-total collapse in travel demand and a $4 billion drop in revenue in the second half due to the COVID-19 crisis and associated border restrictions," Qantas said.
The national carrier's statutory net loss was $1.96 billion.
On a pre-tax basis, the loss was $2.7 billion, including aircraft writedowns.
Its A380 aircraft are in long-term storage in the US and its 747s have been retired six months ahead of schedule.
"We are sadly progressing reductions of our workforce and 4000 people will leave the organisation by the end of September," Mr Joyce said.
"Despite the recent setbacks, we know conditions will ultimately improve and the hard decisions we've made so far are about making sure that the Qantas Group is ready to take part in that recovery."
The carrier says given current border restrictions, 20 per cent of pre-COVID domestic capacity is scheduled for August.
Recent sales activity shows there will be high levels of demand when those restrictions are eased.
The airline has flagged that a Trans-Tasman route could start earlier than the July 2021 timeframe for international travel.