Qantas rebounds to record profit, upgrades fleet plan to capture travel demand
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(Reuters) -Qantas Airways Ltd on Thursday posted a record profit in the first half rebounding from five straight half-year losses and announced a A$500 million ($340.30 million) share buyback, adding that it expects air fares to remain above pre-COVID levels, although moderating in the next half.
The airline also upgraded its fleet plan to restore capacity faster and meet strong demand from leisure travel, resources and domestic freight markets.
Qantas plans to add five additional aircraft for its freight and resources customers in Western Australia and has options for up to 12 additional aircraft to be wet leased from Alliance Aviation to provide increased capacity in the domestic market.
To capture the tourism recovery in Asia after China’s reopening, Qantas is also adding two aircraft for Jetstar Asia, due for delivery in mid-2023.
Qantas Chief Executive Alan Joyce said the company is yet to see signs of cost-of-living pressures in its bookings.
“Supply chain and resourcing issues are starting to unwind, which will help the company to add more capacity and that will put downward pressure on fares,” he said.
The company said fares are up by about 20% in Australia compared to 2021, and by similar amounts in key markets like the Unites States.
Qantas also warned about ongoing challenges in the industry, including aircraft manufacturer delays, supply chain snarls and labor constraints, that continued to adversely affect operations.
The airline posted an underlying profit before tax of A$1.43 billion for the six months ended Dec. 31, compared with a loss of A$1.28 billion in the year ago and its own forecast range of A$1.35 billion to A$1.45 billion.
Qantas said it expects to remain below its target net debt range by the end of fiscal 2023.
($1 = 1.4693 Australian dollars)
(Reporting by Savyata Mishra and Harish Sridharan in Bengaluru; Editing by Krishna Chandra Eluri and Shailesh Kuber)