After three years and $7 billion in statutory losses due to the pandemic, the Qantas Group has returned to profit with a record result for the first half of FY23.
The group earned $1.43 billion underlying profit before tax to 31 December 2022, which is 49 per cent higher than the prior first half record result achieved in FY18. Profit after tax was $1.0 billion.
The drivers of the Qantas Group returning to profit were consistently strong travel demand, higher yields and cost improvements from the group’s $1 billion recovery programme that is nearing completion, and came despite higher fuel costs.
A $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. Qantas has been the most on-time major domestic airline for five months in a row.
Qantas Group returns to profit
The strong financial position means the group can reinvest, particularly in fleet and customer experience, as well as rewarding employees and shareholders, Qantas said.
This includes the unveiling of prototypes of first and business class suites that will be fitted to its Airbus A350 aircraft from late 2025.
Offering a new level of luxury, privacy and clever use of space, these interiors have been designed with Project Sunrise in mind, which will see Qantas fly direct from the east coast of Australia to New York and London
Huge turnaround
Commenting as Qantas Group returns to profit, Qantas Group 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.”
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