Qantas profits descend as fares fall after Covid

Net profit at Australia’s Qantas dropped 28 percent for the fiscal year – Copyright AFP DAVID GRAY

Australian airline Qantas on Thursday reported a slide in net profit as post-Covid fares dropped, but said it was working to rebuild its reputation after a string of public scandals.

Net profit fell 28 percent to Aus$1.25 billion ($US48 billion) for the financial year that ended June 30, the airline said.

It blamed lower fares as market capacity expanded after the pandemic, along with the cost of customer-friendly initiatives and a reduction in freight revenue.

Revenue climbed 10.7 percent to Aus$21.9 billion, however.

The carrier forecast stable bookings and travel demand in the months ahead, tipping a “positive revenue momentum”.

Australians were making travel a spending priority, and their intention to travel over the next 12 months remained “high”, it said.

“Our focus this year has been getting the balance right in delivering for customers, employees and shareholders while building a better, stronger Qantas Group,” said chief executive Vanessa Hudson.

“Restoring trust and pride in Qantas as the national carrier is our priority, and while there’s more work to do, we’ll get there by delivering for our customers and people consistently into the future.”

Hudson took the pilot’s seat of the 103-year-old airline after the late 2023 departure of her predecessor Alan Joyce, who has been blamed for the carrier’s troubles.

Qantas said this month it would claw back Aus$9.26 million in bonuses paid to Joyce, citing the Irish-born executive’s performance.

– ‘Underlying strength’ –

During his tenure, the once-beloved airline faced sustained criticism over its service, soaring ticket prices and the treatment of staff. 

It enraged once-loyal Australians by charging high ticket prices despite record profits and getting a multi-billion-dollar taxpayer-funded bailout during the pandemic. 

It was also embroiled in a bruising “ghost flights” scandal that saw it pay a large fine for continuing to sell seats on long-cancelled flights. 

Seeking to “recognise the efforts” of employees, Qantas said it would give a Aus$500 staff travel voucher to all 23,000 non-executive workers. It is the second staff voucher issuance after a similar gesture in February.

Hudson said the results showed the “underlying strength” of Qantas’ operations.

“The investment in operational reliability and customer initiatives delivered a positive improvement in on time performance and customer satisfaction with Qantas ending the year as the most on time major domestic airline,” she said

“Our strong financial performance and balance sheet will allow us to continue to invest in our largest ever fleet.”

The carrier has long been seen as the “spirit of Australia” — the nation’s link to the rest of the world. 

Although not state-run, Qantas is seen as an integral part of the economy and vital to cohesion in a country where major cities are hundreds of kilometres apart.