Qantas Group has upgraded its profit expectation for the first half of 2023 anticipating strong travel demand. The Group now expects an underlying profit before tax of between $1.35bn and $1.45bn. This represents a $150 million increase to the profit range given in early October 2022.
Qantas has reported a huge operational improvement ranking as the most punctual domestic airline in October 2022. The airline made an investment of $200 million in rostering additional staff, continued recruitment, and reserved aircraft to maintain operational efficiency anticipating heavy traffic in upcoming holidays.
The Group’s net debt is now expected to fall to an estimated $2.3 billion and $2.5 billion by 31 December 2022. This is around $900 million better than expected in the most recent update, due largely to the acceleration of revenue inflows as customers book flights on Qantas, Jetstar, and partner airlines into the second half and beyond, as well as deferral of approximately $200 million of capital expenditure to the second half.
The Group has also reported redeeming around 60% of the $2 billion in COVID-related travel credits to customers.
Qantas recently finalised a three-year agreement with Jetstar pilots as part of its improved pay policy and expects to reach in-principal agreements with others in the coming weeks. More than 6,500 employees, or 33% of those covered by an enterprise bargain agreement (EBA), have now signed up for a post-COVID EBA. The Group remains on track to share the benefits of the recovery with around 20,000 non-executive employees through a $5,000 boost payment and up to 1,000 Qantas shares worth approximately $6,000, subject to key conditions being met.
The Group anticipates that customers will continue to put a high priority on travel ahead of other spending categories with signs that limit international capacity, the group hence predicts more domestic leisure demand, benefiting Australian tourism.