Qantas has posted a billion-dollar half-year profit, dramatically turning around its fortunes from a $456 million loss for the same period a year earlier.
The company's preferred underlying pre-tax profit measure rose even more, from a loss of $1.3 billion to a profit above $1.4 billion, as the airline's revenue more than tripled to nearly $10 billion as domestic and international travel restrictions ended.
Qantas said its return to profit comes after three years and $7 billion of cumulative losses due to the pandemic.
The airline's chief executive, Alan Joyce, said the rebound was down to a combination of travel demand, cost-cutting and higher airfares.
"When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned," he said in a statement.
"That's effectively what's happened, but it's the strength of the demand that has driven such a strong result."
Don't expect airfares to fall back to pre-COVID levels
Mr Joyce said travellers could expect to see airfares fall back from recent peaks.
"Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn't kept up with demand.
"Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares."
Qantas said fuel costs were up 65 per cent, compared to pre-pandemic levels, while average airfares were up around 20 per cent on 2021 levels.
While Qantas is promising a reduction in fares, it told investors they will remain "significantly above financial year 2019 levels".
Domestic capacity is expected to rise from 94 per cent of financial year 2019 levels to 103 per cent, while international capacity is forecast to rise from 60 to 81 per cent of pre-COVID levels.
The company is returning money to shareholders through a $500 million share buyback, and will buy a further $300 million worth of shares to fund employee entitlements instead of issuing new shares, having completed a $400 million buyback in December.
Qantas also remains embroiled in major disputes with sections of its staff, notably the airline's high court challenge to a Federal Court ruling that it unlawfully outsourced its ground handling operations, which resulted in around 2,000 redundancies.
However, the airline talked up its moves to reward the employees who are still with the company.
"Around 20,000 non-executive employees are on track to receive up to 1,000 Qantas shares, currently valued at around $6,500. They are also eligible for a $5,000 cash recovery boost," the company noted.
Story By: Michael Janda
Original story link:https://www.abc.net.au/news/2023-02-23/qantas-profit-result-february-2023/102012212
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