AFTER three years and $7 billion in statutory losses due to the pandemic, Qantas Group has returned to profit-making, with a record half-year result.
The company earned an underlying profit before tax of $1.43 billion to 31 December, which is 49% higher than the prior first half record, achieved in the 2018 fiscal year.
Net debt declined to $2.4 billion, down from $3.9 billion at last result, and well below Qantas’ target range, while the company’s total operating margin was 16%, which came despite significantly higher fuel prices.
Qantas said the drivers of the positive result were consistently strong travel demand, higher yields, and cost improvements from the company’s $1 billion COVID recovery plan, which is on track for completion by the end of the fiscal year.
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.
This investment resulted in a material improvement in passenger satisfaction, with Qantas now the most on-time major domestic airline for five months in a row.
The strong financial position means Qantas can reinvest in its fleet, which it is doing so through an upgrade which includes 11 more Airbus aircraft, and its customer experience, through ongoing funding for lounges and technology.
Qantas is also rewarding employees, with 20,000 non-executive staff rewarded with a $500 travel credit, and recovery bonuses now up to $11,500 each in cash and stocks.
General stockholders have not been left out either, with an on-market share buy-back of up to $500 million announced for next month.
“This is a huge turnaround considering the massive losses we were facing just 12 months ago,” Chief Executive Officer Alan Joyce enthused.
“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.”