At a time when airfares in and out of Australia are hitting record highs due to continued demand and a lack of capacity, Qantas has today announced an upgrade in its profit expectations for the first half of the financial year 2023.
The Qantas Group said it now expects an Underlying Profit Before Tax of between $1.35 billion and $1.45 billion. This totals a $150 million increase to the profit range given in early October 2022.
In a media release, Qantas said consumers continue to put a high priority on travel ahead of other spending categories, and there are “signs that limits on international capacity are driving more domestic leisure demand, benefiting Australian tourism.”
The Group also reported that fuel costs remain “significantly elevated” compared to last year and are expected to reach approximately $5 billion for the financial year, which would be a record high for the Group despite international capacity at around 30 per cent below pre-COVID levels.
Meanwhile, operational performance has continued to improve compared to recent months, with Qantas yesterday being ranked as the most on-time domestic airline in October.
The airline said its $200 million investment in rostering additional staff, continued recruitment and reserve aircraft would help maintain these levels during the latest wave of COVID infections in the community and into the busy Christmas period, as well as limiting the operational impact of extreme weather (especially wind) in November.
An airline still in debt to the tune of $2.3 – $2.5 billion
Despite the profit forecast upgrade, the Group expects its net debt to now range between $2.3 billion and $2.5 billion by 31 December 2022.
This is around $900 million better than expected in the most recent update, the airline said, due largely to the acceleration of enhanced revenue as customers book flights on Qantas, Jetstar and partner airlines into the second half and beyond.
The national carrier also said around 60 per cent of the $2 billion in COVID-related travel credits held by the Group have now been redeemed by customers.
Regarding the question of more capacity, Qantas said it would add more flights “as quickly as possible in the second half of the year while maintaining operational reliability.”
Eye-watering airfares continue
New research released today by comparison site Finder found around a third of Australians (36% – equivalent to 7.2 million people) were deterred from travelling due to soaring airfares and rising travel costs.
Discount economy airfares were up 56 per cent between April to August 2022 compared to the same period last year, according to the ACCC.
The Karryon: Together In Travel community has also shared some of the overpriced airfares they’ve recently experienced across the board in booking flights for clients and themselves.
They included domestic airfares ranging from $1,900 for an Adelaide–Kununurra return economy flight to a Sydney-Perth round trip in Business at $6,880.
International airfares to popular destinations in Asia Pacific included return flights to Japan at $7,000, Brisbane–Tokyo return flights for $11,000 and Sydney-Auckland return economy flights for $3,000.
For Aussies travelling to the Americas, be prepared to fork out for flights. Current business class tickets sold include Sydney–Minneapolis return flights at $31,000, Melbourne–Orlando return flights for $27,000, Brisbane–Chicago return flights for $25,000 and Brisbane–Chile flights for a whopping $39,000.
However, despite the price hike, 35 per cent of Aussies still plan to travel over the Christmas period –whether that’s interstate (14%), intrastate (14%) or overseas (8%).
According to the Australian Bureau of Statistics, there were 1,040,550 departures in September 2022 – a monthly increase of 98,340 trips.
You can read the full Finder Report here.
