Sunday, April 14, 2024

Qantas profit falls as airfares normalise

Qantas boss Vanessa Hudson has unveiled a 13 per cent decline in first-half profits as airfares softened and flight capacity increased, in her first set of financial results since she took over leadership of Australia’s biggest airline from Alan Joyce in September.

Profit after tax fell to $869 million in the six months to December 31, down from $1 billion in the prior-year period, the company said in a statement to the ASX on Thursday morning. Revenue rose 12.3 per cent to $11.13 billion.

The airline announced a share buyback of up to $400 million.

The airline announced a share buyback of up to $400 million.Credit: Oscar Colman

Underlying earnings before interest, tax, depreciation and amortisation– the metric most closely watched by investors– fell 13 per cent to $1.3 billion as the cost of airfares fell and number of flights increased after the pandemic, putting pressure on its passenger and freight yields.

While no dividend was declared for the half, the carrier announced another share buyback of up to $400 million on top of the $452 million it has bought back since August.

Qantas posted a record $2.47 billion in profit in the 2022-23 financial year to the delight of investors and chagrin of customers who felt the business had prioritised its bottom line over passenger experience. Hudson said in August that record profit was not as good as it will get for Qantas.

Commenting on the result on Thursday, she struck a conciliatory tone, saying there was “a lot happening to lift our service levels, and the early signs are really positive”.

“We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022.“: Qantas boss Vanessa Hudson.

“We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022.“: Qantas boss Vanessa Hudson. Credit: Eamon Gallagher

“We know that millions of Australians rely on us, and we’ve heard their feedback loud and clear,” she said in the results announcement. “We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022.”

“We need to deliver a service that is consistently better in order to succeed long term and that’s what we’re focused on,” she added.

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