Qantas 2024 Financial Results
Qantas has released its Yearly Report, showing a $2.08 billion profit for the 2024 financial year. Although this represents a 16% decline compared to last year, Qantas’ earnings remain strong. CEO Vanessa Hudson described the results as “getting the balance right” after the previous year’s record $2.47 billion gain, which was driven by high fares and aggressive cost-cutting measures under her predecessor, Alan Joyce.
The profit decline is attributed to lower airfares due to the return of market capacity, as well as increased spending on customer initiatives and fleet upgrades aimed at restoring its performance and reputation with Australian consumers. Qantas’ profitability has also decreased due to higher expenses related to wages, fuel, and legal costs, including a $100 million fine imposed by the ACCC.
Qantas’ fleet renewal program continued with the delivery of 16 aircraft, and the airline is expected to receive 20 more planes by mid-2025, including the first A321XLR in April. The new fleet enhances operating efficiency, network flexibility, passenger comfort, and reduces emissions.
Alongside the increase in new aircraft deliveries, the Group has implemented significant upgrades to enhance the customer flying experience. These include improved food and beverage offerings on Qantas, the introduction of Apple Pay on Jetstar, plans for a cabin refresh, the rollout of Wi-Fi on select Qantas international flights, upgrades to the Qantas app with flight status and baggage tracking features, and the introduction of Group Boarding. Investments in operational reliability have also led to significant improvements in on-time performance and a reduction in disruptions.
Qantas believes it is on track to restore its damaged brand. The company’s “reputation score” increased by 12 points in the year leading up to June 30, and an additional 4 points in July, reaching 67 out of 100. Although there is still some ground to cover, Qantas is now within 13 points of its highest reputation score of 80, when it was the most trusted brand in Australia.
Qantas’ 2024 ratios in Fig A below assess the company’s financial performance in terms of profitability, liquidity, solvency, and efficiency. Some ratios, such as the Rate of Return on Owners’ Equity and the Gearing Ratio, have recently reached nearly mythical levels, largely due to the accumulated losses from COVID-19, which have wiped out the equity section of Qantas’ Balance Sheet and impacted revenues in the Income Statement. Financial analysts typically avoid using the traditional debt-to-equity ratio when interpreting airline financial results, opting instead for more complex ratios. We are still awaiting reports from some financial analysts, but for now, I have used the Gearing Ratio provided by www.stockanalysis.com.
Source: Qantas chief Vanessa Hudson keeps focus on restoring trust as profit dips by Robyn Ironside The Australian Aug 29th.
Source Image:Qantas
Fig A Qantas Financial Ratios
2024 | 2023 | |
Net Profit Ratio | 9% | 12% |
Rate of Return on Owners Equity | 719% | 24650% |
Liquidity Ratio | 0.34 | 0.42 |
Gearing Ratio | 22:1 | 673:1 |
Total Expense Ratio | 90% | 86% |
Revenue Seat Factor | 83% | 83% |