The Qantas Group has disclosed its performance for the first half of the 2024 Financial Year (1H24), showing a decrease in year-on-year profit, set against a period of reducing air fares and continued investment in fleet and customer service.
Overview…
Despite grappling with challenges such as fare normalization and capacity adjustments, the Qantas Group reported a notable $1.25 billion Underlying Profit Before Tax for H124.
However, this figure reflects a 13% decline compared to the previous fiscal year. Lower fares and capacity adjustments significantly impacted earnings.
Nevertheless, the Group managed to achieve increased flying and cost efficiencies, with unit costs (excluding fuel) decreasing by 5.2% year-on-year.
Travel Demand and Capacity
The surge in total flying by 25% on an available seat kilometer basis underscores robust travel demand.
Accommodating an additional 3.3 million passengers compared to the same period last year indicates a promising trajectory in post-pandemic recovery.
Notably, leisure travel spearheads the resurgence, with business travel steadily approaching pre-COVID levels, indicative of growing consumer confidence in air travel.
CEO Comments
Vanessa Hudson, the CEO of Qantas Group, expressed optimism about the company’s trajectory despite prevailing challenges. She emphasized the significance of elevating service levels and improving customer satisfaction.
Hudson acknowledged the decline in airfares since late 2022 and highlighted the cost benefits from enhanced operational efficiency and increased international flying.
Hudson extended her gratitude to the Qantas team for their pivotal role in the initial recovery phase and thanked customers and partners for their unwavering support.
She reiterated the company’s commitment to delivering consistently better service to ensure long-term success.
International and Freight Operations
The first half of 2024 witnessed significant developments in Qantas International and Freight Operations.
With a 39% increase in capacity, Qantas International resumed all pre-pandemic routes and introduced new ones, including the Perth-Paris route.
Jetstar experienced a 38% growth in international flying, attributed to new routes and increased operational reliability.
However, international freight performance faced challenges due to macroeconomic factors and increased capacity on key routes.
Despite this, domestic freight remained stable, buoyed by e-commerce growth and fleet modernization efforts.
Domestic Operations
Qantas Domestic saw a 5% increase in flying driven by the recovery in business travel and strong demand from premium leisure and the resource sector.
Despite a decline in Underlying EBIT, customer satisfaction significantly improved, reflecting the airline’s commitment to service excellence.
Fleet and Sustainability
The Group’s fleet renewal initiative saw the addition of eight new aircraft in H124, with plans for 14 more deliveries in the second half of the year.
Notable updates include the allocation of additional A321XLRs to Qantas Domestic and the acquisition of mid-life aircraft for Network Aviation.
These initiatives align with the Group’s interim emission reduction target of 25% by 2030.
2024 Outlook
Looking ahead, the Qantas Group anticipates steady unit revenue for domestic operations and a gradual return to normalcy for international routes as market capacity rebounds.
Fuel costs, net capital expenditure, and transformation initiatives are key focus areas for FY24.
In conclusion, despite facing challenges, the Qantas Group remains resilient and proactive in navigating the complexities of the aviation industry.
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