SYDNEY - Qantas Airways has surged back to profitability on booming travel demand after most pandemic-era curbs were dismantled, helping to shore up chief executive Alan Joyce’s position and sending the shares rallying the most in almost two years.
First-half underlying profit before tax is seen at A$1.2 billion to A$1.3 billion (S$1.08 billion to S$1.17 billion) - ending a streak of five consecutive half-yearly losses totaling A$7 billion, the carrier said in a trading update on Thursday.
Incidents of scrapped flights, late departures and lost bags are all declining, it added.
The airline’s rapid return to profitability and move towards pre-pandemic levels of punctuality take some of the pressure off Mr Joyce, who became the target of an explosion of public anger as Australia’s national airline struggled with the post-Covid-19 resurgence in travel demand.
The 56-year-old, who has led the carrier for more than 14 years, has repeatedly rejected calls to resign to take responsibility for this year’s slump in reliability.
“This is a remarkable turnaround because of how quickly it has happened,” Mr Joyce said on a call.
Asked whether he should bring forward his retirement, Mr Joyce, who previously agreed to stay on at least until the end of 2023, replied: “There is no change to my plans.”
Qantas shares gained as much as 11.8 per cent in early Sydney trading, the biggest intraday gain since November 2020. It is just one of five carriers in the 29-member Bloomberg World Airlines Index to be up this year.
The surge in travel demand immediately after Covid-19 restrictions eased this year caught Qantas on the hop. After axing more than 8,000 workers to weather the pandemic, the airline found itself hamstrung by labour shortages, illness and a shrunken fleet.
On-time performance improved to 69 per cent in September from 67 per cent in August, while cancellations fell to 2.4 per cent last month from 4 per cent in August. To help maintain this improvement, the airline will spend A$200 million in the remainder of fiscal 2023 on rostering additional crew, training new staff and paying overtime.
“It is clear that maintaining our pre-Covid-19 service levels requires a lot more operational buffer than it used to,” Mr Joyce said in the update. “That means having more crew and more aircraft on standby and adjusting our flying schedule to help make that possible, until we are confident that extra support is no longer needed.”
Workers will also be rewarded after a two-year wage freeze. The airline will bump up wage increases to 3 per cent from 2 per cent for around 20,000 employees at a cost of A$40 million a year. BLOOMBERG
