Australia’s national carrier, Qantas Group, has announced a record full-year underlying profit of $2.47bn, representing a dramatic financial turnaround for the country’s largest airline.
The result is the company’s first profitable result since FY2019 after it incurred more than $7bn of statutory losses during the pandemic.
After tax, Qantas statutory profit surged to $1.74bn which will likely renew pressure on the airline to justify the $2.7bn in pandemic-era support it received.
Qantas’s profit margins have been supported by growing demand for domestic and international flights, higher airfare prices and lower operating costs.
The full-year results to June 30 are more than $800m higher than the airline’s previous profits record in FY2018 when it posted an underlying profit before tax of $1.6bn.
Outgoing chief executive Alan Joyce said the results represented a substantial turnaround for the airline in terms of its finances and service delivery.
“Flight delays and cancellations have largely returned to pre-Covid levels and we’ve shifted from heavy losses to a strong profit and pipeline of investment worth billions of dollars,” Mr Joyce said.
“We safely flew almost 70 billion more seat kilometres and doubled the number of people we carried to 46 million compared to the year before.”
“It’s because we’re in a strong financial position that we’re able to invest in new aircraft, new destinations and new training facilities – all things that will make us better in the future.”
But the sharp turnaround for the company has not been without controversy.
After outsourcing nearly 2000 baggage and ground handlers during the pandemic, Qantas was found by the Federal Court in December to have breached the Fair Work Act in an attempt to avoid future industrial action which the airline rejects.
Qantas is appealing this decision in the High Court.
On Monday, the airline was served a class action claim seeking millions of dollars in compensation for the Qantas customers who never received refunds for money or points that they spent on trips that were ultimately cancelled due to the pandemic. Qantas has denied the allegations.
Qantas has also faced strident criticism for it service, with flight disruptions, delays and cancellations, high ticket prices, lost baggage, and suggestions of widespread technical faults with its aircraft adding to its woes.
The airline also announced it will return $500 million to shareholders through a new share buyback program starting in September. This follows the completion of an earlier $400 million buyback program in the six months to December 2022.
The 2022-23 profit result will be the last full-year reporting period with Mr Joyce at the helm, having led the airline for 15 years. His replacement, Qantas chief financial officer Vanessa Hudson, will assume the chief executive role from October.