A record-smashing annual profit forecast by Qantas could be just the start, as the national carrier cashes in on a post-pandemic boom in air travel that’s already enriching investors.
Qantas revealed on Tuesday that it expects an underlying before tax profit of about $2.4 billion in 2022-23 – a staggering 53 per cent increase on its 2018 record.
It’s the latest upbeat announcement from outgoing chief executive Alan Joyce, who led the ‘too big to fail’ airline through COVID-19 travel shutdowns thanks to $2.35 billion in taxpayer support.
Investors are being rewarded with another share buyback, which will be expanded by $100 million as the airline moves towards pre-COVID levels of domestic and overseas travel.
“We’re seeing the broad trends we expected as the industry recovers and trading conditions remain very positive,” Mr Joyce told investors.
“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,” he said.
“That’s combining with lower fuel prices to help put downward pressure on fares, which is good news for customers.”
Rivers of gold
Neil Hansford, an airline industry veteran and consultant, predicts the rivers of gold have only just started flowing for Qantas, saying the broader industry is benefiting from a travel boom.
“Qantas’ results are just starting to lift,” he told The New Daily. “[The] best is to come.”
“$2 billion looks like a starting point … this could easily exceed $3 billion next period.”
Qantas isn’t the only airline unveiling massive profits recently, with a bounce back in travel after COVID-19 also benefiting Singapore Airlines and Emirates.
Singapore airlines announced a record SG2.16 billion ($2.42 billion) net profit late last week, while Emirates posted an AED10.9 billion ($4.47 billion) profit earlier this month in signs the big players are cashing in.
But unlike both those airlines, which are government owned in their respective countries, the benefits of Qantas’ financial turnaround are primarily benefiting its private investors, with share buybacks on the agenda after the national carrier managed to pay down its pandemic debts.
Michael Kaine, secretary of the Transport Workers Union (TWU) said Qantas’ latest guidance was “obscene”, and is the result of the airline “bleeding dry workers, passengers and the tax-paying public”.
He renewed union calls for Qantas to pay back more than $2 billion in public COVID support to taxpayers.
He also slammed Qantas for laying off more than 8500 workers during the pandemic.
Profits sparks outrage
“The $100 million increase to the share buyback scheme is a kick in the guts to illegally sacked workers who were told their jobs were sacrificed to save this amount of money,” Mr Kaine said.
“Qantas passengers have faced chronic airport chaos because those 1700 families lost their livelihoods, which has been found twice by the Federal Court to have been illegally motivated to avoid them accessing their industrial rights.”
Mr Joyce, who is set to retire in coming months, has attracted more criticism this week over a plan that will see Qantas lease cabin crew and pilots from Finnair to staff and fly routes in Asia.
The move, which comes on the heels of Qantas converting two of its A330s to freight services, is being seen as a further offshoring of local jobs, an accusation Mr Joyce has denied.
Australian Council of Trade Unions president Michele O’Neil said it’s time for the federal government to crack down on the national carrier and close legal “loopholes to protect Australian workers against Alan Joyce’s business model”.
“Qantas workers know that a huge share of this profit is the result of outsourcing their jobs to multiple companies,” Ms O’Neil said.
“Qantas has set up labour-hire companies, enabling the airline to drive down wages and conditions for the benefit of outgoing chief executive Alan Joyce and Qantas shareholders.”
