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Qantas’ Half Yearly Report is in, and the results were excellent. New CEO, Vanessa Hudson delivered a half-year profit of $1.25bn in her first financial result in the top job. While down 13% than last year last year, its 40% better than before the pandemic.

Unions were less positive, calling on Ms Hudson to share the bumper profit with the airline’s 24,000 workers beyond the $500 in staff travel credit provided.

The profit drop is due to lower airfares and more spending on improving customer experiences, like better food, technology, and Wi-Fi, and helping customers track luggage. Fares have fallen more than 10 per cent since peaking in late 2022.

Financially the airline is in a healthy position. Qantas continues to generate substantial profits, and it’s recovering from the pandemic faster than most other airlines. Qantas’ share price is almost back to what it was before the pandemic.

Despite its multi-million-dollar profit, Qantas’ earnings will face pressure by the end of the financial year. The airline plans to spend $3 billion mainly to update its fleet. Instead of using their old Boeing 717s, they’re getting new Airbus A220 jet aircraft. Also, they’ve ordered eight more Airbus A321XLRs for their domestic flights, in addition to the 20 they already ordered. This is part of their plan to gradually switch from the old Boeing 737s, starting in early 2025.

Another $140 million for customer improvements is earmarked for the second half of the financial year, speeding up the rollout of high-speed Wi-Fi on international flights, upgrading digital technology, and increasing frequent flyer rewards.

Qantas is also potentially facing a $250 million fine for selling tickets on already cancelled flights and a significant compensation bill for illegally outsourcing the jobs of ground handling workers. There’s also a risk that the increased cost of living could make people less interested in flying. On top of that, Qantas is spending more on fuel because of higher oil prices and a lower Australian dollar.

Source: Qantas CEO posts healthy first half profit and outlines plans to rebuild trust by Robyn Ironside The Australian Feb 22nd, New Qantas learns to fly without Alan Joyce by Eric Johnston The Australian Feb 22nd, Qantas lifts investment in planes as profit falls by Amelia McGuire SHM Feb 22nd