Qantas eyes record annual profit on strong travel demand, raises share buyback

AUSTRALIA’S flagship carrier Qantas Airways said on Tuesday (May 23) it was expecting a record profit this fiscal year on the back of strong travel demand, and that it had raised its share buyback by up to A$100 million (S$89.5 million).

Airlines across the globe have benefited from a rebound in travel demand from Covid-19 lows, although high fuel and staff costs have weighed on their post-pandemic recovery.

Qantas said flying activity increased in the second half and costs associated with operational buffer the group applied to improve reliability were starting to moderate. Jet fuel prices remain elevated, but recent falls are expected to deliver a cost improvement in the second half.

“More parts of the aviation supply chain are returning to normal, which means we’re able to put some of the spare aircraft and crew we kept in reserve back in the schedule,” CEO Alan Joyce said in a statement.

“That’s combining with lower fuel prices to help put downward pressure on fares.”

The airline expects an underlying profit before tax of between A$2.4 billion and A$2.5 billion for fiscal 2023, compared with a A$1.9 billion loss in the previous year.

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Qantas said it expects its domestic capacity to reach above pre-Covid levels by the end of the second half, and international capacity to grow to more than 80 per cent of pre-pandemic levels.

Net debt is now expected to be between A$2.7 billion and US$2.9 billion at end-June, significantly below a revised target range of A$3.7 billion to A$4.6 million.

Qantas swung to a record first-half profit this year, and has said it expects its international capacity to reach about 100 per cent of pre-Covid levels by March 2024. REUTERS