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Qantas has just issued a monster profit upgrade just weeks after releasing its annual report.

Qantas is now forecasting a profit of between $1.2 and $1.3 billion for the first half of the 2023 FY. To put this into perspective market analysts were forecasting a $1.5 billion profit for the entire 2023 FY.

This is a major moment for Qantas which only 12 months ago was still virtually shut down.

Qantas planes are full as passengers catch up on travel now that borders are open.
Not even an estimated 35% hike in airfares or the well documented performance issues have deterred passengers.

The profit upgrade continues a parallel story for Qantas. The first one shows a new, leaner airline taking flight. Alan Joyce has overseen a textbook financial recovery for an airline that was in serious trouble due to an unpreceded change in the external environment. The other story is of a tarnished brand because of lost luggage, chaos at airports, delays, and cancellations as its restarted operations.

Qantas still faces some hurdles moving forward. The Aussie dollar is low which pushes up costs, oil prices are 75% higher than pre Covid and there is the prospect that higher interest rates will substantially slow Australia’s economic growth. Beyond COVID these are issues that all airlines face and Qantas has a long history of managing these headwinds.

On another front the Albanese government has introduced its Fair Work Amendment (Secure Jobs, Better Pay) legislation into Parliament in 2022. The Bill proposes and overhaul of the Enterprise Bargaining system which will impact Qantas. The industrial relations reform provides a system for multi-employer bargaining and allowing the Fair Work Commission (FWC) to arbitrate disputes over flexible work and place new caps on rolling fixed-term contracts.

Qantas is currently in the process of working out their succession plan for when Alan Joyce retires. He is expected to leave by the end of 2023 now that he has guided Qantas successfully through the pandemic. Qantas has a history of promoting from within and the airline is not expected to advertise externally for a new CEO.

Source: Qantas soars back into profit as travel explodes by R Ironside The Australian Oct 13th, Qantas reboot takes flight from pandemic as CEO Alan Joyce faces new set of challenges by E Johnson The Australian Oct 13th , Qantas board to face questions about succession planning as Alan Joyce heads into 15th year as CEO by R Ironside The Australian Nov 1st.