The “Flying Kangaroo” has returned to profit after three years, with underlying profits before tax reaching $1.43 billion in the six months to 31 December 2022.
The airline credited its strong result to high travel demand, higher yields and cost improvements from its $1 billion recovery program. It also announced an on-market share buy-back of up to $500 million.
The Group’s after-tax profits reached $1 billion and its net deb declined to $2.4 billion. Statutory earnings per share were 53.9 cents and its total operating margin reached 16%, despite significantly higher fuel prices.
It’s a turnaround for the airline, which has suffered $7 billion in statutory losses over the last three years since the pandemic began.
“Our people have been absolutely central to our recovery and that’s why we’re so pleased to be in a position to reward them with up to $11,500 in cash and shares, and why we’ve given them another $500 staff travel credit today.
– Alan Joyce, CEO Qantas
CEO Alan Joyce also addressed air fares, which have remained above pre-COVID levels in Australia due to a 65% increase in the price of fuel and less capacity from all airlines due to supply chain issues. Fares are, on average, 20% higher than they were in 2021.
“Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn’t kept up with demand,” Joyce said. “Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares.”
Joyce said he expects overheads to also unwind from this half and into the next financial year.
As a result of the strong financial position, Qantas said it could reinvest in fleet and customer experience and reward its staff. It claims 20,000 non-executive staff were given a $500 travel credit and recovery bonuses of up to $11,500 in cash and shares.
“Our people have been absolutely central to our recovery and that’s why we’re so pleased to be in a position to reward them with up to $11,500 in cash and shares, and why we’ve given them another $500 staff travel credit today,” Joyce said.
Qantas Loyalty also continued to perform, delivering $1 billion in revenue and underlying EBIT of $220 million for the half, a 73% increase on the first-half of 2022. It’s on track to reach between $425 million and $450 million for the full-year.
Looking ahead, the airline expects travel demand to remain strong throughout FY23 and FY24, and expects Group domestic capacity to increase from 94% to 103% and Group international capacity to increase from 60% to 81% through the second-half of FY23.
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