Qantas predicts return to profit in Q2 as cabin crew threaten strike

Qantas predicts return to profit in Q2 as cabin crew threaten strike

Qantas is predicting an underlying profit before tax of between $1.2 billion and $1.3 billion for the first half of FY23 after five consecutive halves of heavy losses due to the pandemic and cumulative statutory losses of $7 billion.

Strong travel demand has boosted Qantas’ recovery, with net debt expected to fall to between $3.2 billion and $3.4 billion on 31 December 2022, which is below the bottom of the target range of $3.9 billion.

Domestic travel demand remains strong across all categories. Revenue intakes for business purposes are over 100 per cent of pre-COVID levels and leisure intakes have further strengthened to over 130 per cent.

Yields from international markets are particularly strong but are expected to moderate as Qantas and other carriers steadily increase capacity.

Qantas Loyalty expects to post record earnings for the first half and is on track to reach its FY23 EBIT target of $425–$450 million.

The announcement comes as Qantas’ cabin crews threaten to strike, throwing a massive question mark over its customer’s summer holiday plans.

The Flight Attendants Association of Australia (FAAA) said two groups of the airline’s crew have filed applications to the Fair Work Commission for industrial action.

Teri O’Toole, FAAA’s national secretary, said they were being threatened with outsourcing unless they signed contracts that would “dramatically cut conditions.”

“We’re talking about deals that would extend duty lengths at the same time as reducing rest provisions, all the while not even guaranteeing work on the new (A321neo) aircraft,” O’Toole told The Australian.

“Cabin crew have raised concerns the proposal would significantly impair their fatigue management.”

The new enterprise agreement would result in cabin crew working for 12 hours instead of 9.45 hours and up to 14 hours in the case of a disruption. It would also mean rest periods between shifts get reduced to 10 hours when flights are disrupted and no other crew is available.

The earliest date for any possible action would be 18 November.

Despite this proposed industrial action, Qantas said that its operational performance has continued to improve and is “now at or pre-COVID levels in the first half of October,” per Qantas News Room.

Qantas Domestic’s on time performance in October has so far averaged 75 per cent despite a four percentage point impact from continued extreme weather conditions. The airline said that 69 per cent of its flights departed on time during September and cancellations fell from 4 per cent in August to 2.4 per cent in September. In October so far, 1.7 per cent of flights have been cancelled, which is better than pre-COVID levels, according to Qantas.

Mishandled bags remained at 6 per 1000 passengers in September and into October.

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