The Qantas Group earned an underlaying profit of $1.43bn before tax in the last six months of 2022 to December 31, 2022. The Group reported a profit after a span of almost three years and statutory loss of $7 billion due to the pandemic.
Commenting on the results, Qantas Group chief executive officer (CEO) Alan Joyce said: “This is a huge turnaround considering the massive losses we were facing just 12 months ago. When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned. That’s effectively what’s happened, but it’s the strength of the demand that has driven such a strong result.”
The Group claimed that strong travel demand, higher yields and cost improvements from the Group’s $1 billion recovery program that is nearing completion were the major contributing factors behind this profit. Total operating margin was 16% and came despite significantly higher fuel prices.
“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,” added Joyce. “In terms of overheads, we expect the costs we’re carrying from the extra operational buffer will start unwinding from this half and into next financial year.”
The Group invested $200 million in operational resilience including holding some aircraft in reserve and rostering more backup crew and reported a significant improvement in operational performance for customers with Qantas has been the most on-time major domestic airline for five months in a row.
Going ahead, the Group will be rewarding its employees with up to $11,500 in cash and shares and $500 staff travel credit.
“Returning to profit means we can get back to reinvesting for our customers, which is clear from the network, fleet and lounge announcements we’ve made, and from the Project Sunrise cabins we’re previewing. Importantly for our investors, this also sets us up to deliver long term shareholder value,” added Mr Joyce.
Qantas’ domestic operations delivered $785 million and Jetstar’s $130 million, with margins of 22% and 11% respectively.
The Group resumed two routes and seven new routes were started.
Qantas Freight continued to deliver earnings well above pre-COVID levels. While international yields softening with the return of more capacity to the market, a permanent increase in e-commerce domestically has created a structural shift in freight volumes and earnings.