The Qantas Group has disclosed projections for its FY23 performance, as capacity is set to reach 100 percent of pre-Covid levels by March 2024.
Continued strong travel demand and completion of its three-year recovery program are expected to drive the Qantas Group to a FY23 Underlying Profit Before Tax of between $2,425 million and $2,475 million.
Flying activity has increased in the second half as new aircraft arrive, more widebody jets return from long-term storage and operational reliability improves.
Group Domestic capacity will be above pre-COVID levels at 104 per cent by the end of 2H23, led by a significant increase in flying on key routes between Melbourne, Sydney and Brisbane.
Group International capacity will grow to greater than 80 per cent of pre-COVID levels by the end of 2H23, with the rate of increase slightly below plan due to some supply issues earlier in the half – such as a three-month delay to restarting Melbourne-Hong Kong due to a shortage of ground handlers in that overseas port.
Ramping up international flight operations
Qantas recently announced its projections for strong increases across its international route network.
This will mean a further ramp up in flying from October 2023 onwards that will see Group International capacity reach around 100 per cent of pre-COVID levels by March 2024.
As per the Group’s forecast, the steady return of total market capacity is seen here fare levels moderate from the peaks reached in the first half of FY23.
However, the Group states that yields are expected to remain materially above pre-COVID levels through FY24, particularly internationally.
Similarly, international freight yields have moderated to levels of around 1.5 times pre-COVID levels.
Strong demand into FY24
With the global aviation sector enjoying a sustained period of pent-up travel demand, the Qantas Group has stated that its forward booking trends indicate the strong travel demand continuing into FY24.
Revenue intakes are at 118 per cent of pre-COVID levels for Group Domestic and 123 per cent for Group International.
A common area of complaint as airlines have pushed through the pandemic dormancy period is the overall passenger experience.
Qantas say that they are continuing to improve their customer experience through a strong focus on reliability and on-time performance.
A further sticking point for the industry has been the cost of fuel. Jet fuel prices remain elevated but the Qantas Group projects that recent falls will deliver a cost improvement in 2H23, which is partly offset by adverse movements in foreign exchange for an overall benefit of $150 million.
According to CEO Alan Joyce, the issue of global aviation supply is also coming under control for the airline group.
Group CEO statement
Qantas Group CEO, Alan Joyce, said: “We’re seeing the broad trends we expected as the industry recovers and trading conditions remain very positive.”
“More parts of the aviation supply chain are returning to normal, which means we’re able to put some of the spare aircraft and crew we kept in reserve back in the schedule.”
“That’s combining with lower fuel prices to help put downward pressure on fares, which is good news for customers.”
“We’re on track to take delivery of another eight new aircraft before the end of this calendar year and we’re working hard to bring the last of our stored aircraft through heavy maintenance so we can get them back in the air,” added Mr Joyce.