LONDON – Australian national flag carrier Qantas has seen strong travel demand in the first half of the year. This is supported by positive forecasts on financial and operational performance as we head into the second half of the financial year. Demand remains strong with travel for business and leisure both reaching 100% and 130% of pre-Covid levels respectively.
A good year
In what is still a rocky landscape for the aviation industry – with fuel prices up 75% compared to pre-Covid. Paired with both inflation rates and interest rates rising quickly, Qantas expects to post a profit anywhere between $1.2 and $1.3 billion for the first half of financial year 23.
Qantas Group CEO, Alan Joyce, said: “It’s been a really challenging time for the national carrier but today’s announcement shows how far we’ve come. Since August, we’ve seen a big improvement in our operational performance and an acceleration in our financial performance.”
All of the above positive performance sets the Australian carrier up to reduce their net debt to between $3.2 – $3.4 billion. This indicating a solid standing, given their target range was $3.9 billion.
Qantas group performance
There are plans in place to return additional Airbus A380’s from storage, along with three new Boeing 787-9’s due for delivery. These additional aircraft will help boost group capacity from 61% in the first half of the year, to 77% in the second. ‘On time performance’ has increased to 69% from 67%, however this still lacks when you take into account that its own 75% target.
Sister airline, Jetstar has seen some torrid performance during September due to multiple aircraft being out of service as a result of lightning strikes, bird strike, damage from runway debris and challenges within global supply chain.
October has started considerably better however, and November is expected to be better again still. The low cost subsidiary is expected to receive 8 further A321 LR jets between now and May 2023.
Scheduling has remained conservative in a bid to leave some wiggle room available to utilise in times of delays and cancellations. Current data shows that 20% of the groups capacity is being left in reserve to help bridge the gaps in times of need.
Both airlines will have ten narrow body, six wide body and four regional aircraft on standby and available to use. As the outlook becomes more certain, these jets will be added back into daily service.
“Qantas’ operations are largely back to the standards people expect, and Jetstar’s performance has improved significantly in the past few weeks and will keep getting better with the extra investments we’re making.” Joyce continued.
Staff at the airline are expected to be paid back for their hard work and loyalty, as the airline has today announced a 3% wage increase is set to be implemented, this after a two year wage freeze.
The wage increase will apply to around 5,000 employees and will be on top of a 5,000 dollar recovery boost payment announced in June. This increase is set to come at a $40 million cost to the business.
AviationSource also reported in August that Qantas was set to rejuvenate its staff travel programme, since then more than 10,000 beneficiaries have been added in a large scale expansion to ensure access to more friends and family of staff.
“The fact our financial recovery has accelerated means we can invest more in rewarding our employees, who are doing an amazing job. We’ll spend an additional $40 million a year on permanent pay increases for our people on top of the $200 million in cash and share bonuses we’ve announced for our people.” Joyce said.