Qantas Airways (ASX:QAN) has announced a 13% decrease in its half-year net profit after tax, totalling $873 million, attributing the decline primarily to a reduction in airfares by more than 10% since the peaks observed in late 2022.
First performance indicator since Joyce
This is the first financial performance report under the leadership of new CEO Vanessa Hudson, who succeeded Alan Joyce in September following his early departure amid various controversies surrounding the airline.
Despite the downturn in profit, Australia’s flagship carrier has pledged to improve customer service and satisfaction.
Hudson highlighted significant advancements in this area. "There's a lot of work happening to lift our service levels and the early signs are really positive," Hudson said, noting a robust recovery in customer satisfaction scores since December.
The airline's focus on enhancing service quality comes alongside its decision to extend its share buy-back program, opting not to pay dividends but instead to repurchase up to $400 million worth of shares in the coming months.
In addition to service improvements, Qantas reported a passenger increase, carrying more than 26 million passengers in the latter half of 2023, and highlighted the success of its budget airline, Jetstar, which saw an 84% increase in pre-tax profit to $325 million.
Declining profitability
And yet both the domestic and international segments of Qantas experienced a decline in profitability, with the airline attributing part of these challenges to rising fuel costs, which are anticipated to impact the second half of the financial year significantly.
Amid these operational adjustments, Qantas is also addressing legal challenges, including a class action lawsuit and scrutiny over its handling of flight cancellations and ticket sales.
Nevertheless, Hudson remains optimistic about the airline's direction and its ability to manage these issues without them affecting its investment plans.
As Qantas continues what seems like a long recovery from the impacts of the COVID-19 pandemic and navigates through legal and operational hurdles, its leadership insists it is focused on long-term success and committed to improved service standards and a strategic approach to financial management.