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22 February, 2024

Qantas announces drop in profits and focus on people in 1H24 results

Qantas has revealed a 13 per cent drop in underlying profits and net debt of $4 billion as the Flying Kangaroos’ first results under new CEO Vanessa Hudson places focus on customers and people.

Qantas’ 1H24 results also highlight $869 million profit after tax (down 13 per cent from $1b), 52 cents statutory earnings per share (down 4 per cent), revenue increase of 12.3 per cent to $11.13 billion and a $500 travel credit bonus to around 24,000 staff members.

Qantas Group says lower fares in the last six months have contributed to a reduced revenue per available seat kilometre to the effect of around $600 million profit, while freight yields also fell by $146 million. However, the carrier says these losses were largely offset by increased levels of flying leading to around $485 million of transition costs associated with the post-COVID restart of $179 million and a 5.2 per cent year-on-year drop in unit cost.

Investing in customers and people

The Qantas Group has today announced several major investments for customers, including revealing the
interiors of its new A220 aircraft, accelerated rollout of Wi-Fi on international flights and a major upgrade to
digital platforms.

A double Qantas Points/Status Credits offer for Frequent Flyers has also been launched in addition to regular domestic and international fare sales.

The Group continues to invest heavily in people, including recruitment and training. New aircraft represent a significant career opportunity and are a key driver of promotions and investment in new skills.

As part of recognising the efforts of its people, around 24,000 non-executive employees will receive a $500
staff travel voucher to go towards already heavily discounted standby fares available to Group employees,
family and friends.

Hudson & Qantas working on feedback from 2023

“We know that millions of Australians rely on us and we’ve heard their feedback loud and clear,” CEO, Qantas, Vanessa Hudson, said.

“There’s a lot of work happening to lift our service levels and the early signs are really positive. Our customer satisfaction scores have bounced back strongly since December and we have more service and product improvements in the pipeline.

“Our people have been instrumental in the initial recovery we’re seeing and I thank them sincerely. The journey we’re on will take time, but the spirit they are bringing is fantastic and it’s made us optimistic about what we can achieve together.

Outlook

The Group is seeing strong travel demand across the portfolio and unit revenue is expected to remain stable for domestic and continue to normalise for internationally as market capacity returns.

Key assumptions and expectations for the remainder of FY24 include:

FY24 fuel cost expected to be $5.4 billion at current fuel prices, inclusive of hedging.
FY24 net capital expenditure is expected to be $3.0–3.2 billion.
FY24 depreciation and amortisation expected to be $1.8 billion.
Targeting transformation initiatives (mix of efficiency and revenue benefits) of approximately $400 million in FY24 to offset the impact of CPI.
Net debt expected to be at or below the middle of the target range by the end of FY24.

“I want to thank our customers and our partners for their support as we keep working to make the Qantas Group an organisation that everyone is proud of,” Hudson, continued.

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

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