Qantas Reveals $2.5 Billion Profit

Qantas has promised to start direct flights from Sydney to London by late 2025 Steve Parsons/PA

Qantas Group will provide employee benefits, reinvest for customers and return capital to shareholders after releasing its first full-year statutory profit since the COVID-19 pandemic.

The airline achieved a statutory after-tax profit of $1.74 billion and an underlying profit before tax of $2.47 billion, compared to $7 billion in accumulated losses over the last three years.

This follows the Group’s $1 billion recovery program, a 132 percent fly increase compared with FY22 and robust travel demand drove significantly higher revenue.

Qantas Group CEO Alan Joyce said Qantas is in the best financial state in decades.

Mr. Joyce said results show a “substantial turnaround in both our finances and service over the past year.”

“We’ve got new aircrafts arriving every three weeks, which we can afford, and we’ve got over 160 aircrafts on order over the next decade,” he said.

“We can afford to invest and grow—especially in new aircraft—while still delivering returns to shareholders.”

The exceptional balance sheet strength was backed by net debt falling to $2.89 billion, well below the $3.7 billion to $4.6 billion target range and the FY19 level of $4.7 billion. Combined with cashflows from a structurally enhanced business, data is expected to underpin future aircraft deliveries and shareholder returns.

Following a return of $1.0 billion during FY23 through share buy-backs at an average price of $6.19, Qantas today approved a return to shareholders of up to $500 million through an on-market share buy-back commencing in September 2023.

Qantas Orders More Aircraft For The International Fleet

Qantas also announced new aircrafts will replace the bulk of the current A330 fleet, consisting of 12 Boeing 787s and 12 Airbus A350s.

With deliveries starting in FY27 and continuing into the next decade, purchase right options stretching out until at least FY37 provide flexibility for future growth and replacement of the A380 fleet.

Mr Joyce said the Group negotiated options and purchase rights with Airbus and Boeing, which it can “draw down on as needed for replacement and growth over the next decade and beyond.”

Partnering with Airbus and Boeing could provide access to up to 500 million litres of Sustainable Aviation Fuel (SAF) annually from 2028, including from the United States.

Qantas chief executive officer-designate Vanessa Hudson said the deal gives the Qantas Group access to sustainable aviation fuel supplies out of the United States, providing a pathway to achieving 2030 SAF targets.

A line of Qantas aircraft sits at Kingsford Smith Airport in Sydney, Australia, on Oct. 31, 2021. James D. Morgan/Getty Images

“New aircrafts are also a key part of cutting our emissions and reaching our sustainability targets. They burn significantly less fuel, especially when moving from a four-engine A380 to a twin-engine A350,” Mr. Joyce said.

The average age of the 330 fleet will be 21 years when the replacement program starts in FY27 and is in line with the Group’s typical replacement profile.

Aircraft scheduled to leave the Qantas fleet towards the end of the replacement program will undergo a cabin refurbishment from FY25, including next-generation Economy seats.

Qantas named its international fleet renewal ‘Project Fysh’ to honour airline co-founder Sir Hudson Fysh.

One Billion Points For Frequent Flyers

Meanwhile, the Qantas Group on Aug. 24 launched a giant sale across its network to thank frequent flyers with their choice of points or status credits.

In addition to gifting more than a billion Qantas Points shared between Frequent Flyers who have flown at least one Qantas flight in the past 12 months, members can choose to receive Status Credits.

More than one million seats are on sale for travel across Qantas Domestic, Qantas International, Jetstar and QantasLink regional flights.

The sale includes flights to more than 90 destinations nationwide, allowing travellers great value fares and pre-plan family and friends visits, business trips or holiday getaways.

A traveller arrives to check-in at the Qantas domestic terminal at Sydney Airport in Sydney, Australia, on Aug. 25, 2022. Lisa Maree Williams/Getty Images

Qantas fares will be up to 40 percent off, including return flights from Sydney to London for $1,799 and Melbourne to Los Angeles for $1,199.

Jetstar fares are up to half price, with domestic Jetstar flights starting from $29 one-way and Jetstar international flights from $145 one-way.

Mr. Joyce said although fares are still higher than pre-COVID, the Group saw economy fares “come down on average by around 12 per cent over the past six months” as more capacity returned to the market.

“We expect that downward pressure to continue,” he said.

“Our people have been absolutely critical to our recovery, and it hasn’t been an easy road for them.”

“This is my last full year results as Qantas Group CEO,” he said

“From November, Vanessa (Hudson) will be a very safe pair of hands to lead all of this forward. To provide the leadership, drive and foresight to make the most of the opportunities ahead for the Qantas Group”.