Qantas raises profit guidance by another $150 million to $1.45 billion – Australian Aviation

Victor Pody shot this Qantas A330-300, VH-QPD

Qantas has raised its half-year profit forecast by an additional $150 million as consumer demand for domestic flights increases.

The news means that Flying Kangaroo is now targeting a notable underlying profit of up to $1.45 billion.

The result comes even as the broader group reported an underlying pre-tax loss of $1.86 billion in its most recent full-year results and claimed the pandemic cost its airlines a total of $7 billion.

In a surprise statement on Wednesday, Qantas said international capacity restrictions were driving consumers to holiday in Australia instead.

“Group net debt is now expected to decrease to an estimated $2.3 billion and $2.5 billion through December 31, 2022, respectively,” the company said in a statement.

“This is approximately $900 million better than last update expected, primarily due to the acceleration in revenue streams as customers book flights on Qantas, Jetstar and partner airlines in the second half and beyond, as well as a postponement of about 200 million US dollars investment in the second half.

“Roughly 60 percent of the group’s $2 billion in COVID-related travel credits have now been redeemed by customers.

“Total credit utilization is consistent at approximately $70 million per month, and new initiatives will be announced shortly to encourage full utilization of the remaining credits over the next year.”

The airline added that its low level of net debt put it in a position to “consider future shareholder returns in February 2023.”

The news comes days after it was revealed that Qantas had put much of its poor service woes behind it and was now the country’s top airline for cancellations.

The Flying Kangaroo was also the best-performing airline in October to avoid delays, overtaking long-time best-performer Rex.

Earlier this year, the national carrier faced a series of problems, including long delays at Easter, hours of waiting for calls and even the revelation that the cabin crew of a Qantas A330 had to sleep in multiple seats in economy class.

However, Alan Joyce received strong support from Chairman Richard Goyder, who claimed in September that the CEO and his executive team had performed “exceptionally well” in a harshly worded response to the CEO’s critics.

Writing in The Australian Financial Review, Goyder commended his senior staff for guiding the airline through a pandemic that “sent other airlines and their creditors home”.

He said Qantas is now on track to fix its problems and joked: “If you haven’t heard that, it may be because the data showing the improvement has received far less media attention than stories showing how bad things have gotten.

“Meanwhile, corporate obituary writers have been busy. Their analysis was unaffected (for the most part) by what is happening at other airlines or by the fact that Qantas’ performance has turned around.”

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