Qantas profit falls on cost of fixing damaged reputation

SYDNEY - Qantas Airways said full-year profit fell as the airline invested more to repair its battered reputation and airfares declined. 

Underlying profit before tax fell 16 per cent in the year ended June 30 to A$2.08 billion (S$1.8 billion), Qantas said on Aug 29. The result was in line with analyst expectations. 

Qantas shares fell after the airline flagged a slump in international passenger revenue in the final six months of 2024 as capacity floods back into the market following the Covid-19 pandemic. Capital expenditure will jump to as much as A$3.9 billion this fiscal year from A$3.15 billion as Qantas foots the bill for its vast fleet overhaul.

The stock closed 0.8 per cent higher at A$6.37 on Aug 29. It is up 18.6 per cent in 2024.

On a call with reporters, Qantas chief executive Vanessa Hudson said international fares are continuing to fall as more aircraft take to the skies, though the pace of the decline will slow in the first half of 2025.

The results underscore the challenges facing Ms Hudson a year into her job. She is still cleaning up the mess left by her predecessor Alan Joyce, while picking up the multibillion-dollar bill for new aircraft.

“Restoring trust and pride in Qantas as the national carrier is our priority,” Ms Hudson said in a statement. “There’s more work to do.”

Ms Hudson said flight bookings were “holding up” amid a cost-of-living crisis, and customers appeared to be prioritising air travel over other discretionary spending.

That trend underpins what Ms Hudson described as an “optimistic outlook” for the year ending June 2025. She took over from Mr Joyce when he abruptly stepped down in the wake of a ghost-flight scandal, service cancellations and illegal sackings.

Qantas also announced a stock buyback of as much as A$400 million and said dividends should be restored in the first six months of 2025. That would be the airline’s first such payment since 2019. BLOOMBERG