by New Qantas chief executive Vanessa Hudson has reported a half-year pre-tax profit of $1.25bn in her first financial results at the helm of the airline, rewarding shareholders with a $400m buyback after a turbulent period under her predecessor. .
The profit result was down 13% from last year’s record, but still well above pre-pandemic figures, and the airline is still flush with cash.
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Qantas said fares and capacity had normalised, resulting in reduced passenger revenue. However, there is still strong demand for travel underpinned by leisure, as well as business travel which is approaching pre-Covid levels.
The airline’s budget division, Jetstar, was one of the standouts in Qantas’ financial performance, with earnings from its Australian operations rising 35% to $175m in the six-month period.
The financial results are the first to be delivered under Hudson, who moved into the lead role earlier than planned amid continued criticism of his predecessor Alan Joyce.
Under Joyce, Qantas was widely criticized for reducing capacity as post-pandemic travel demand rose, leading to high ticket prices and huge profits for the airline.
There was also pandemic-era anger over lost luggage and canceled flights.
The airline is also defending allegations from the competition regulator that it advertised and sold tickets for thousands of flights it had already canceled in its internal systems.
Qantas revealed on Thursday that legal proceedings are expected to be heard later this year if they are not settled in advance.
Hudson also spoke to the hundreds of millions of dollars in fines and restitution payments the airline could face. In addition to an offer of $250m in fines from the competition watchdog in relation to the canceled flights, compensation hearings will take place in March over the illegal sub-sourcing of 1,700 ground handlers during the pandemic.
Hudson insisted that the potential large payouts would not deter the airline from continuing to invest in efforts to improve its customers’ experience and regain public trust.
“For those two cases, they are working their way through the court. There will be an outcome and we accept that these are part of the balance of the courts,” she said. “I’m not concerned that it will affect spending.”
Hudson said Qantas wanted “confidence in a better-than-ever recovery”.
“We are investing in putting more people in the contact centers so we can service and respond to customers as quickly as possible,” she told reporters in Sydney.
She also praised airline employees.
“My main focus is to have your back, to make sure you have what you need to provide the best for our customers,” she said.
The reputation rebuild includes Qantas’ decision to proactively start refunding customers with Covid credits. It still has nearly $500m in unclaimed credits.
Last year, hundreds of millions of dollars in Covid credits held by Qantas were due to expire, before the airline, in the face of intense scrutiny from customers and politicians, ended the deadline for all credits and promised cash refunds offer to certain customers. .
Half-year results show profit margins have compressed from last year, but Qantas still has enough cash to spare to announce a $400m buyback, which replaces a dividend.
Buybacks are typically used to return additional capital to investors and to strengthen a stock’s price. The airline’s net profit came in at $869m, down 13% from last year’s strong figures, and its capital expenditure is rising.
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On Thursday the airline also announced the order of eight additional A321XLR aircraft, which will operate on Qantas’ domestic network. It has taken delivery of eight new and mid-life aircraft in the first half of the financial year, with a further 14 aircraft due before July, as part of a fleet renewal plan.
The board is also being refreshed: former Telstra chairman John Mullen will become the new chairman in July after Richard Goyder announced his departure following a wave of criticism of Qantas’ corporate performance.
The Transport Workers’ Union, which maintains an adversarial relationship with Qantas and is leading the compensation case for illegally outsourced ground handlers, said the carrier’s profit was “obscene” and acted as a “reminder of the corporate greed that Qantas turned into a bag. his own before”.
“There might be a billion bucks in the bank, but at what cost?” said the national secretary of the TWU, Michael Kaine.
“The good name of the national carrier was trashed, the passengers were priced out, and workers were thrown on the scrap heap. It shows that money is far from the only measure of a successful business.”
