Qantas Projects $1.3 Billion First-Half Profit

Qantas has just released an ASX update, expecting an underlying profit before tax of $1.2 to $1.3 billion for the first half of the fiscal year 2023, based on current forwards bookings and fuel costs. Qantas has also announced a number of steps in response to the current high level of travel demand.

This follows five consecutive halves of significant losses owing to the pandemic, with statutory losses totalling $7 billion.

Strong travel demand has helped Qantas’ recovery, with nett debt forecast to decline to between $3.2 billion and $3.4 billion by December 31, 2022, well below the goal range of $3.9 billion.

Domestic travel demand continues to be robust across all categories, and yields from overseas markets are solid. Still, they are projected to drop as Qantas, and other carriers slowly add capacity.

The news comes as Qantas cabin crews prepare to strike, casting a large cloud over its customers’ summer holiday plans. The Flight Attendants Association of Australia (FAAA) announced that two groups of airline staff have filed applications for industrial action with the Fair Work Commission.

Qantas continues to invest in additional manpower, such as rostering extra crew and training new recruits. Over time, a conservative approach to scheduling keeps around 20% of capacity in reserve that may be called upon to decrease delays and cancellations.

A new wage policy will see annual pay increases adjusted upwards from 2% to 3%, automatically applying to about 5,000 employees who had already agreed to the 2% uplift. In contrast, about 3,600 employees who joined the Group after the retention program’s cut-off date in mid-2021 will now receive 250 share rights to recognise their role in the accelerated recovery.

CEO Alan Joyce said, “it’s been a really challenging time for the national carrier, but today’s announcement shows how far we’ve come”.