Qantas soars back into profit as travel explodes

Tourism is back in a big way with Qantas crediting strong travel demand for putting the airline on course to a huge half-year profit.

Perth visitors Carla Chertman and daughter Hannah view the underwater Great Barrier Reef sea life and divers at the Cairns Aquarium on Thursday. Picture: Brian Cassey

After two years in mothballs, Australia’s tourism industry has roared back to life, with Qantas crediting an expected $1.3bn half-year profit to the strength of travel demand.

Not even an estimated 35 per cent hike in airfares or the well-documented airline performance issues have deterred travellers, with domestic and international flights packed with passengers.

Qantas chief executive Alan Joyce said revenue from leisure travellers was now at 130 per cent of pre-Covid levels, and business travel spending at 100 per cent.

In recent months, Qantas carried more people into Europe and Britain than in the corresponding pre-Covid period on direct London and Rome flights.

Other red-hot international destinations included Fiji, Bali, India and the US, while domestically Melbourne, Sydney, Cairns and the Gold Coast were in the greatest demand.

Mr Joyce said full planeloads had helped put Qantas back on course to profit after accumulating $7bn in losses since 2020.

Qantas chief financial officer Vanessa Hudson said so far, the lower Australian dollar had proved no deterrent to outbound travel. “Internationally, that has been growing in terms of demand and intent to travel in the next 12 months,” she said.

Flight Centre founder Graham Turner said the only area of weakness for the tourism industry was inbound travel, with overseas visitors still wary of Australia’s hardline Covid policy.

Australian Bureau of Statistics data shows short-term arrivals from overseas at 44 per cent of 2019 levels in Aug­ust.

“When the government shuts a country down and shuts the travel industry, you can’t expect it to recover overnight but the signs are good,” Mr Turner said.

“We’re seeing a lot of travel, particularly corporate and business travel. I’d say a fair bit of Qantas’s success is coming from the business travel sector, and very high international fares.”

Expensive airfares had been no deterrent to travel, particularly overseas trips, which Mr Turner put down to pent-up demand.

“People are just accepting that if you want to travel, you have to pay for it,” he said. “The really expensive fares tend to be the business class and premium fares. There’s still reasonable value in economy fares.”

Virgin Australia was also seeing enormous demand and Queensland Tourism Industry Council chief Brett Fraser said operators were reporting strong domestic bookings, with hotel occupancy rates during school holiday periods peaking at 90 per cent across the state. “We are confident the Christmas season will echo earlier holiday periods and provide another influx of domestic visitors,” he said.

Destination Gold Coast head of stakeholder and strategy Rach­el Hancock said accommodation providers in the holiday hotspot were already more than 60 per cent booked for the end of year.

And although international visitors were yet to return in large numbers, Cairns in far north Queensland was still seeing a strong tourism rebound.

Cairns Aquarium owner Daniel Leipnik said Tourism Research Australia data showed visitors were up 24 per cent on pre-Covid levels, driven by a huge influx of domestic tourists. “I really believe … that all those Australians who travelled to Cairns during the pandemic fell in love with the place and have spread such a positive word about their experience.”

Perth resident Carla Chertman visited the aquarium with daughter Hannah on Thursday as part of the family’s first interstate trip since West Australian borders reopened in February.

“We’re loving it,” said Ms Chertman. “We’ve been to the Gold Coast to visit friends and now Cairns … It’s great to be travelling again.”

Originally published as Qantas soars back into profit as travel explodes