Following three years and $7.0 billion in losses due to the global COVID-19 pandemic, Qantas has returned to profitability with a FY2023 record half-year profit of $1.0 billion or $0.539 per share.
On Thursday (February 23, 2022), Qantas Group reported their first half FY2023 financial results for the six months ending December 31, 2022. The Group reported a record half-year FY2023 statutory profit of $1.0 billion or $0.539 per share. The outstanding result was driven by strong travel demand, higher yields and cost efficiencies from the company’s $1.0 billion recovery program, which is nearing completion. Qantas’ $200 million investment in operational resilience, including holding some aircraft in reserve and rostering more backup crew, delivered a significant improvement in operational performance for customers. At December 31, 2022, Qantas Group had liquidity of $5.4 billion, including $4.1 billion in cash, while net debt declined to $2.4 billion, down from $3.9 billion at the end of the previous period.
In Thursday’s announcement, Qantas Group’s 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. 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. 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.
“Our people have been absolutely central to our recovery and that’s why we’re so pleased to be in a position to reward them with up to $11,500 in cash and shares, and why we’ve given them another $500 staff travel credit today. 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.”
Qantas Group Domestic delivered an underlying EBIT of $915 million for H1 FY2023, with Qantas delivering $785 million and Jetstar $130 million, with margins of 22 percent and 11 percent, respectively. Group International delivered an Underlying EBIT of $511 million on a near doubling of pre-pandemic capacity from 31 percent in H2 FY2022 to 60 percent during the first half of FY2023, while Qantas Freight continues to deliver earnings well above pre-COVID levels. Qantas Loyalty delivered revenues of $1.0 billion and Underlying EBIT of $220 million, a 73 percent year-over-year increase.
Qantas has started their largest fleet renewal program in the airline’s history, with up to 299 new aircraft, including options, spread over 10+ years. By the end of 2023, Qantas and Jetstar are expecting to take delivery of 12 new aircraft, and an average of one new jet every three weekly over the next three years.
The Group has also updated their fleet plan. Five mid-life Airbus A319/320s will be sourced for Network Aviation to meet demand from Western Australia resource clients, and options for up to 12 additional Embraer E190s will be wet-leased to QantasLink from Alliance Airlines. Qantas has also exercised options for nine more Airbus A220-300s, increasing their firm order total to 29. The additional A220s are scheduled for delivery in FY26 and FY27. Two mid-life A320s will also be added to Jetstar Asia’s Singapore base, whose fleet had been downsized to seven aircraft during the pandemic. Finally, three additional Airbus A321P2F Freighters will be added to the Qantas Freight fleet to meet increasing demand with more efficient aircraft.
Source: Qantas