Qantas profit soars, reputation repairs ‘on schedule’
Derek Rose |
Qantas shares have taken flight after Australia’s largest airline delivered one of its biggest profits, raised its dividend and splashed out on another 20 mid-range aircraft.
Qantas on Thursday posted a $1.6 billion full-year statutory net profit after tax, up 28.3 per cent from a year ago, while its underlying pre-tax profit rose 15 per cent to $2.4 billion.
Citing customer loyalty surveys, Qantas said its reputation and brand was “rebuilding at a strong and steady pace,” an allusion to the battering the airline took at the end of Alan Joyce’s tenure as CEO in 2023.
Replacement chief executive Vanessa Hudson deserved credit for turning things around, EToro analyst Josh Gilbert said.
“(Ms) Hudson inherited a mammoth challenge in balancing shareholder returns, rebuilding trust with consumers, and satisfying regulators,” he said.
“Just under two years in the job, and the results speak for themselves.
“The airline has stabilised, costs are being managed effectively, and customer sentiment is slowly being rebuilt.”
The latest blow to the airline’s reputation was a record $90 million fine earlier in August for illegally sacking 1820 staff.
It added to a $100 million fine it received for selling tickets to flights that were already cancelled between 2021 and 2023, against the backdrop of executives pocketing seven-figure bonuses.
Revenue for the year ended June 30 grew 8.6 per cent to $23.8 billion, thanks to growth in its international operations and strong demand for domestic business and leisure travel.
In early afternoon trading, Qantas shares were on track for their best performance in over two years, rising 9.1 per cent to an all-time high of $12.12.
The airline said it had ordered 20 Airbus A321XLR aircraft that will begin arriving in 2028, taking its total order for the next-generation planes to 48.
The jets have a range of 8700km, about 3000km more than the Boeing 737s they will replace.
The aircraft will allow Qantas to launch flights to destinations across Southeast Asia and Pacific islands that are not currently viable.
Qantas flagged Perth-India and Adelaide-Singapore as two possibilities for new routes and said more updates would follow.
Sixteen of the jets will have lie-flat business seats and seat-back entertainment screens for longer routes, such as flights between Perth and the east coast as well as short- and medium-haul international routes.
Qantas’ first two A321XLRs, configured for domestic and short-haul international trips, are expected to begin flying mid-September on the busy Sydney-Melbourne and Sydney-Perth routes.
“Investing in new aircraft is one of the most significant ways that we can provide our customers with a better flying experience,” Ms Hudson said.
“These billion dollar investments are possible because of our continued strong financial performance.”
Ms Hudson said direct flights to London and New York from Australia’s east coast were a step closer to reality, with the first Project Sunrise A350-1000ULR set to move to Airbus’ final assembly line in France in October.
Qantas expects to take delivery in October 2026 and to make its first Project Sunrise flights in the June quarter of 2027.
Qantas will pay investors a final dividend of 16.5 cent per share as well as a special dividend of 9.9 cents per share.
The airline also announced it would pay about 25,000 of its non-executive employees $1000 in Qantas shares each year.
AAP
