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Despite a return to profit, Qantas still faces the anger of passengers and frequent flyers disappointed with flight delays, lost luggage, cancellations, credits and refunds.
Key points:
- Qantas has posted a billion dollar net profit after cumulative COVID-related losses of $7 billion
- The airline says strong demand, rising fares and lower costs have driven the improvement
- Chief executive Alan Joyce says airfares should soon come down as capacity catches up with demand
Gleness Stiles is one of those previously rusted-on Qantas customers now threatening to abandon the airline.
Qantas owes Ms Stiles almost $10,500 for two business class flights to South America the airline cancelled during the COVID-19 pandemic restrictions.
The airline agreed in writing to refund her travel credits in April last year. However, despite Ms Stiles making numerous phone calls and sending emails to the airline, she still has not received her money back.
"It's very frustrating and, not only that, it says that if I haven't used them by December, they're going to expire," she told The Business.
"I never in my wildest dreams thought it would take me this long to get this money back."
Ms Stiles said it is not through a lack of effort on her part.
"Even yesterday, I was on the phone to them for so long during my lunch break at work that I had to hang up and they said they would get someone to call me back, but of course I haven't heard from anyone," she said.
"The whole experience has just been totally frustrating and really, really sad.
"It's just left a really bad taste in my mouth about the way that they've treated not only me but so many other people as well."
John Le-Raye helps run Victims of Jetstar, which is one of several Facebook groups set up for disgruntled Qantas Group customers.
"The Victims of Jetstar are ordinary Australians who have lost money from the actions of Qantas and Jetstar," he said.
"They are being given vouchers which they no longer want to use. They are denied refunds.
"They go to the airport and face flight cancellations, which causes massive disruptions to their itineraries.
"Clearly the focus is on profit before people."
Billion dollar profit from 'bums on seats'
Qantas has posted a billion-dollar half-year profit, dramatically turning around its fortunes from a $456 million loss for the same period a year earlier.
The company's preferred underlying pre-tax profit measure rose even more, from a loss of $1.3 billion to a profit above $1.4 billion, as the airline's revenue more than tripled to nearly $10 billion as domestic and international travel restrictions ended.
Qantas said its return to profit comes after three years and $7 billion of cumulative losses due to the pandemic.
The airline's chief executive, Alan Joyce, said the rebound was down to a combination of travel demand, cost-cutting and higher airfares.
"When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned," he said in a statement.
"That's effectively what's happened, but it's the strength of the demand that has driven such a strong result."
Sydney University aviation expert Professor Rico Merkert said Qantas had reduced flights relative to demand to keep operating costs in check.
"So, that means that they can keep the cost under control, but they can also then get more bums on seats on those aircraft that they do fly," he told The Business.
"That means that the yields are then also going to be higher and, overall, it's improved the profitability that we have seen in these results."
Mr Merkert also said that airlines were facing a rise in costs, with Qantas flagging major fleet renewal in today's results announcement involving up to 299 aircraft over the next decade.
"The airlines — and that's not just Qantas but it's a sort of global thing that's happening at the moment — are all preparing themselves for procuring new aircraft that are a lot more fuel-efficient and, therefore, less carbon-emitting.
"That costs a lot of money, and someone needs to pay for that, and that, in many instances, is the consumer."
Don't expect airfares to fall back to pre-COVID levels
Mr Joyce said travellers could expect to see airfares fall back from recent peaks.
"Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn't kept up with demand.
"Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares."
Qantas said fuel costs were up 65 per cent, compared to pre-pandemic levels, while average airfares were up around 20 per cent on 2021 levels.
While Qantas is promising a reduction in fares, it told investors they will remain "significantly above financial year 2019 levels".
That is despite the recent arrival of Bonza in the market and the expansion of Rex's capital city operations.
"We have now four domestic jet airlines operating. We've never had that level of competition as you can see today," Mr Joyce said.
Domestic capacity is expected to rise from 94 per cent of financial year 2019 levels to 103 per cent, while international capacity is forecast to rise from 60 to 81 per cent of pre-COVID levels.
The company is returning money to shareholders through a $500 million share buyback, and will buy a further $300 million worth of shares to fund employee entitlements instead of issuing new shares, having completed a $400 million buyback in December.
Qantas also remains embroiled in major disputes with sections of its staff, notably the airline's high court challenge to a Federal Court ruling that it unlawfully outsourced its ground handling operations, which resulted in around 2,000 redundancies.
However, the airline talked up its moves to reward the employees who are still with the company.
"Around 20,000 non-executive employees are on track to receive up to 1,000 Qantas shares, currently valued at around $6,500. They are also eligible for a $5,000 cash recovery boost," the company noted.