Qantas has unveiled a remarkable pre-tax profit of $2.5 billion, setting a new record for CEO Alan Joyce's final year at the helm of Australia's largest airline.
Following a significant recovery from a $860 million loss in 2021-22, the airline's after-tax earnings surged to $1.74 billion, also marking a historic achievement.
The anticipation of such a result had been growing since the airline's impressive first-half rebound, which was further bolstered by an upgraded guidance in May.
The magnitude of this recovery was highlighted by the remarkable doubling of annual revenue, surpassing $19 billion by June 30.
Qantas has also taken the opportunity to confirm an order for 24 aircraft, comprising 12 Boeing 787s and 12 Airbus A350s. These deliveries are projected for the 2027 financial year.
Mr. Joyce emphasized, "It's because of our strong financial position that we can invest in new aircraft, new destinations, and new training facilities — all of which will enhance our future."
Despite this success, shareholders will not receive a dividend yet. However, an on-market share buy-back has been approved by the Board, enabling a return to shareholders of up to $500 million. This buyback initiative will commence next month, following a $1.0 billion return during 2022-23 through share buybacks at an average price of $6.19.
Entering FY24 with a robust balance sheet and expecting ongoing benefits from its recovery program, Qantas envisions a bright future. The airline's key assumptions for FY24 include a projected total fuel bill of $2.6 billion for the first half, sustained Group Domestic capacity exceeding pre-COVID levels, and gradual recovery of Group International capacity, aiming to reach 100% of pre-COVID levels in 2H24. Qantas Loyalty anticipates an Underlying EBIT of over $500 million in calendar year 2023, well ahead of its FY24 EBIT target.
Addressing fiscal matters, Qantas expects a reduction of approximately "$400 million in transitionary costs incurred in FY23," while an ongoing transformation of over $300 million in FY24 is expected to offset CPI.
Qantas acknowledges that Net Debt might rise in FY24 but is projected to remain below the lower end of the target range. This range is expected to expand as invested capital grows.
The airline also extended a generous gesture to customers, unveiling 1 million new airfare deals for Qantas and Jetstar, along with over one billion bonus points for frequent flyers as a token of appreciation (eligibility restrictions apply). Moreover, the company allocated 340 million to reward more than 21,000 staff, including granting up to 1,000 Qantas shares each.
After facing pandemic-induced losses, Qantas anticipates a resumption of company tax payments in the second half of 2023-24. Additionally, it plans to begin building franking credits in 2025, facilitating the resumption of dividends to shareholders, as highlighted in the release on Thursday.
