After three years of heavy turbulence, Qantas lands safely with $1.4b profit

Qantas has posted an interim underlying pre-tax profit of $1.43 billion in its first return to profitability since the coronavirus pandemic started three years ago.


Feb 23, 2023, updated Feb 23, 2023
Qantas chief executive Alan Joyce (Photo: ABC News, Tom Hancock)

Qantas chief executive Alan Joyce (Photo: ABC News, Tom Hancock)

The record first-half result was at the top end of the airline’s forecast for an underlying profit between $1.35b and $1.45b in the first half of fiscal 2023.

The statutory net profit for the six months to December 31 was $1b, compared to a $456 million net loss a year ago.

“When we restructured the business at the start of Covid, it was to make sure we could bounce back quickly when travel returned,” CEO Alan Joyce said on Thursday.

“That’s effectively what’s happened, but it’s the strength of the demand that has driven such a strong result.”

By 1030 AEDT, the group’s shares were trading 3.2 per cent lower at $6.26 each in a weaker Australian market.

A rebound in air travel demand helped Qantas notch up revenue of $9.9b, more than three times the figure for the same period a year ago.

“While interest rates and inflation are expected to hit discretionary spending at some point, we have yet to see any signs of that,” Joyce said in a media briefing.

“In fact, research shows that travel is one area that people want to prioritise over the next 12 months.”

Qantas’ profit turnaround comes after three years and $7 billion in statutory losses due to the pandemic, and was delivered despite fuel costs soaring 65 per cent from pre-pandemic levels last year amid the Russia-Ukraine conflict.

All segments of its business turned profitable during the half year, led by Qantas Domestic which recorded $785m in earnings before interest and tax, compared to a $613m loss a year ago.

Qantas International and Freight was the second most profitable segment, generating $464m in earnings, while Qantas Loyalty garnered a $220m gain. Jetstar recorded half year earnings of $177m.

Qantas said domestic flying levels had averaged 94 per cent of pre-pandemic levels, while international capacity also doubled to 60 per cent.

It expects travel demand to continue helping drive the recovery this year and in 2024. Its domestic capacity will exceed pre-Covid levels in the second half of 2023, while international capacity is forecast to reach 81 per cent of 2019 levels in the second half.

The national carrier will not pay any interim dividend for the half year but announced an on-market share buy-back of up to $500 million.

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