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Qantas’ 2023 Yearly Report is in, and the results are fantastic. Qantas reported a profit of $2.47bn for the FY2023 a dramatic financial turnaround of $4.3 billion on last years $1.86bn loss. The result is more than $800m higher than the airline’s previous profit record in FY2018 when it posted a profit of $1.6bn. High airfares, strong travel demand and cost-cutting of $1 billion all helped Qantas deliver its biggest full-year result on record. 

It’s a great way for Alan Joyce to bow out before he hands over to its Vanessa Hudson in November. The outgoing CEO said that “This is a remarkable turnaround, three years in the making. And it’s been hard.”

Qantas 2023 ratios in Fig A below assess the performance of Qantas financial functions of profitability, liquidity, solvency, and efficiency. Some ratios have taken on almost mythical figures recently largely because the accumulated losses from Covid which have wiped out the equity section of Qantas’ Balance Sheet and revenues in the Income Statement. 

While shareholders are stoked not everyone is happy with Qantas’ record result. The Qantas results will be a bitter pill for some travellers who have experienced a disrupted period of travel (chaos at airports, misplaced baggage, flight delays and cancellations) punctuated by very high air fares. Some employees too will be unimpressed particularly those who were stood down or made redundant and had their jobs outsourced after the airline received generous government pandemic payments. 

Joyce in his last months at the helm is trying to show he is switching from rebuilding Qantas’ finances to investing in customers to restore Qantas’ brand and reputation.  This means spending billions on dozens of brand-new planes. He announced the airline had approved orders for 24 new widebody aircraft, a mix of Airbus A350s and Boeing 787s that will arrive from 2027. The 787s will replace its current A330 aircraft. Qantas too is rebuilding its airport lounges, working at reducing flight delays and finding lost bags. It is gifting millions of free frequent flyer points and trying to take the sting out of high-ticket prices with a string of ultra-cheap seat sales across Qantas and its discount carrier Jetstar. He is also trying to mend relations with his employees by allocating $340 million in bonuses for more than 21,000 workers, including pilots, cabin crew, engineers, and head office staff.

 

Fig A Qantas Financial Ratios 2022 and 2023

  2022 2023
Net Profit Ratio  -20% 12%
Rate of Return on Owners Equity -978% 246%
Liquidity Ratio 0.53 0.42
Gearing Ratio 34.5 593
Total Expense Ratio 110% 86%
Revenue Seat Factor  68% 83%

Source: Qantas delivers record $2.47 bn profit on back of soaring demand and high-ticket prices by Jonathon Barrett The Guardian Aug 24th, Qantas vows to make even more money after record profit for FY23 by Robyn Ironside The Australian Aug 24th