After being 11 weeks from insolvency and incurring $7 billion in losses during the COVID-19 pandemic, mpoagen Qantas is in its strongest financial position ever, its departing CEO says.
The flag carrier on Thursday reported it made an underlying profit before tax of $2.47 billion for the 12 months to June 30, compared with a $1.86 billion loss the previous year.
Its statutory profit after tax was $1.74 billion on revenue of $19.8 billion, up from $9.1 billion in revenue last year.
“It is a world away from the $7 billion in statutory losses we racked up during COVID,” chief executive Alan Joyce told reporters.
“This is a remarkable turnaround, three years in the making.”
Qantas also announced plans to replace its ageing fleet of 28 Airbus A330s with two dozen new aircraft to meet what Mr Joyce described as “incredibly robust” travel demand.
The company will start taking delivery of 12 new Boeing 787 Dreamliners and 12 new Airbus A350s in 2026/27, with plans to use the new planes both domestically and internationally.
“Because these aircraft have a fantastic range and better fuel efficiency, they are also going to enable us to open more routes across the Pacific, into Europe and also Asia,” incoming Qantas Group CEO Vanessa Hudson said.
Mr Joyce said Qantas was 11 weeks away from bankruptcy during the pandemic, but was now in its best financial position.
The flagship carrier’s net debt stood at $2.89 billion as of June 30, down 27 per cent from a year ago and from a peak of $6.4 billion at the height of the pandemic.
“The future for Qantas has never looked better,” said Mr Joyce, who is retiring in November.
While Qantas still won’t resume paying the dividends it cancelled during the pandemic, it will buy back $500 million in shares.
Mr Joyce also confirmed Qantas received $2.7 billion from taxpayers during the pandemic, including almost $900 million from the JobKeeper program.
Most of the rest came from the government for the hiring of its aircraft to move people and freight around and in and out of the country, as the circumstances required.
Asked if he ever considered repaying back any of that money, Mr Joyce told the ABC’s 7.30 program JobKeeper went to its employees and Qantas was paying back by paying corporate tax on its profits.
“As we’re making money, we’ll pay corporation tax and getting there faster,” he said.
“Should our people who got the money for JobKeeper pay that back?
“I’d say no because that’s asking them to pay it back in a difficult period of time, so what money do we pay back exactly?”
Mr Joyce, who has been summoned to appear before the Australian Senate’s cost-of-living inquiry next week, earlier told journalists economy fares had dropped 12 per cent since peaking last December.
“No business is immune to high inflation at the moment,” he said, adding that fares should keep dropping as more international capacity comes online.
Qantas’s domestic capacity is above pre-COVID-19 levels but its international capacity is at 80 per cent and won’t return to pre-COVID levels until mid-2024.
“We have the aircraft, we have the pilots, it’s just taken us a while to get the maintenance done, because every airline in the world is getting maintenance done on aircraft that went into storage for three years,” Mr Joyce said.
He denied charges Qantas was deliberating cancelling flights to engage in “slot hoarding”, saying it only cancelled flights for legitimate reasons such as technical difficulties.
“The underlying premise of this is that this is blocking competitors getting slots – and that’s just wrong,” Mr Joyce said, accusing “monopolistic airports” of attempting to make a case for using Qantas’s slots for other purposes to improve their profitability.