Qantas’ full year results reveal major profit

Qantas boss Alan Joyce has shared details about his exit following the airline’s record profit.

Qantas has posted an underlying profit before tax of $2.47 billion for the financial year.

The airline said it was expecting $2.45 to $2.47 billion for the 2023 financial year and it appears it was right on the mark.

It had a statutory profit after tax of $1.74 billion. Its net debt also declined to $2.89 billion.

Qantas said its return to profit comes after three years and $7 billion of cumulative statutory losses.

The company said underpinning the profit was completion of its $1 billion recovery program (launched in the first year of those losses), a 132 per cent increase in flying compared with FY22 and strong travel demand driving significantly higher revenue.

Qantas Group CEO Alan Joyce described the results as a “turnaround in both our finances and service over the past year”.

“Flight delays and cancellations have largely returned to pre-Covid levels and we’ve shifted from heavy losses to a strong profit and pipeline of investment worth billions of dollars,” he said in a statement on Thursday.

Qantas CEO Alan Joyce. Picture: NCA Newswire / Gaye Gerard

Mr Joyce said travel demand was “incredibly robust” and that was why they had taken on new aircraft and new routes.

“It’s because we’re in a strong financial position that we’re able to invest in new aircraft, new destinations and new training facilities – all things that will make us better in the future,” he said.

“Our people have done a superb job under very difficult circumstances. Today’s result means more than 21,000 non-executive staff will receive up to $6000 worth of Qantas shares as a thank you for their part in our recovery, plus another $500 staff travel credit.

“This is in addition to a $5000 cash payment to eligible employees as new enterprise agreements are finalised.”

‘Extremely challenging’: Joyce addresses exit

Mr Joyce will retire as CEO in November, making these the last full-year results he will announce for the company.

“It’s been extremely challenging but I’m please to say the future of the national carrier is on solid ground,” he said, speaking to media on Thursday.

He said the Qantas Group’s financial position was the “strongest it’s ever been” and there was a huge improvement in customer satisfaction but acknowledged there was “still more we have to do”.

Chief Financial Officer Vanessa Hudson will take over as CEO in November. Picture: NCA Newswire / Gaye Gerard

My Joyce described leaving as a “bittersweet moment”, explaining he has put so much of his life into the company but also wanted to go off and do other things.

“The things I look back on and say that I’m pretty proud of would be first of all getting the company through the worst crisis in its 100-year history and the crisis we were 11 weeks away from bankruptcy,” he said, speaking of the Covid pandemic.

He also pointed to Qantas-owned budget airline Jetstar making flying accessible.

“I couldn’t get on an aircraft until I was 23 because my family couldn’t afford it,” he said.

“There are a lot of Australians flying today because of Jetstar.”

Mr Joyce was appointed CEO of Jetstar in 2003 before becoming CEO of Qantas in 2008.

He was due to leave the company earlier than this year but stayed to see it through the pandemic.

Mr Joyce said he was proud “the future for Qantas has never look better”.

Chief financial officer Vanessa Hudson will be Qantas’ new CEO.

Ms Hudson has worked in a number of executive positions across the company over 28 years, including chief customer officer and senior vice president for Qantas across the Americas and New Zealand.

She said the results were “not as good as it gets” and expected the future earnings potential of the business to continue to grow.

Ms Hudson and Mr Joyce announcing the Qantas Group’s full year results on Thursday. Picture: NCA NewsWire / Christian Gilles

New aircraft on order

Qantas also announced on Thursday a firm order for 24 widebody aircraft, including 12 Boeing 787s and 12 Airbus A350s, which are expected from 2027.

The intention is for the new aircraft to replace the bulk of the Qantas Group’s current A330 fleet.

It is in addition to Qantas’ order of 12 specially modified A350s to operate Project Sunrise flights, which will arrive from late 2025.

Project Sunrise is about launching ultra long-haul flying with non-stop flights from the east coast of Australia to Europe and New York.

Qantas urged to return government handouts

Qantas revealed in May it expected to make a $2.5 billion net profit this year, prompting calls for the national carrier to return Morrison-era pandemic assistance.

The Qantas Group had posted a market update to the ASX, crediting “very positive” trading conditions with creating an estimated pre-tax profit of $2.45 to $2.47 billion for the 2023 financial year.

It said an increased demand in travel, the arrival of new aircraft and higher fare and freight prices had given the Group a “strong balance sheet”.

The Transport Workers Union, which is locked in a court battle with Qantas over the sacking of 1700 ground staff at the height of the pandemic, said the airline should use the forecast profit to pay back $2.7 billion of government assistance.

There were calls for Qantas to hand back pandemic assistance payments in May when it forecasted a $2.5 billion profit margin this year. Picture: NCA NewsWire / David Geraghty

Michael Kaine, the union’s national secretary, said the forecast was a “kick in the guts” for workers and passengers.

He said the “right thing to do” would be to pay back the government support payments Qantas received during the pandemic.

Australian Senate summons Qantas CEO

Earlier on Thursday, before Qantas posted its full-year results, it was revealed the Australian Senate had issued a summons to Mr Joyce, requesting he appear before an inquiry into the cost-of-living crisis on Monday.

It is understood he will be grilled on high airfares, his personal bonuses, the airline’s Covid travel credit scheme and outsourcing of ground handling staff.

It was reported Mr Joyce refused to attend voluntarily.

A Qantas spokesperson said: “Qantas was invited to attend a cost-of-living Senate committee hearing and to nominate relevant executives, which we did. Despite no other company CEO being required to attend, the committee subsequently insisted that Qantas CEO Alan Joyce appear, which he will do.”

Class action over Covid travel credits

On Monday, class action law firm Echo Law announced it had lodged proceedings against Qantas in the federal court on behalf of “hundreds of thousands” of Qantas customers whose flights were cancelled during the Covid pandemic due to travel restrictions.

Echo Law partner Andrew Paull alleged Qantas failed to immediately issue refunds to customers and instead pushed out travel credits.

He said the airline needed to be “held accountable and refund that money with interest”.

But Qantas said it “completely” rejected Echo Law’s claims.

On Thursday, Mr Joyce and Ms Hudson were asked how much of Qantas’ profit was because of unredeemed flight credits, which expire at the end of this year.

“We actually haven’t taken any material profit in unredeemed Covid credits at all,” Ms Hudson said.

Mr Joyce added: “We really are keen for people to use the credits.”

“My message to everyone out there is that if you have a credit, call a call centre,” he said, adding there was a dedicated team to deal with this.

“Ring that, get the credit, either use it for a booking … or ask for your money back and we’re very happy to do that.”

He said there were still $370 million worth of unclaimed credits in Australia and 80 per cent can get refunds.

Qantas’ Travel Credits Concierge Team can be contacted on 1300 171 505.