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Qantas has recorded a bumper annual profit of $1.7 billion in the last financial year, but once-loyal customers with the airline say the result is at their expense.
Key points:
- Qantas's return to profit comes after it posted an $860 million net loss in the last financial year
- The airline says its profitability is due to "incredibly robust" demand for travel after the pandemic
- Outgoing CEO Alan Joyce has hailed the results as a "substantial turnaround" for Qantas
Its preferred underlying pre-tax profit measure figure is $2.5 billion pre-tax, and comes after Qantas posted a $1.4 billion profit in its half-yearly results in February.
Its underlying pre-tax profit is in line with what the airline expected, telling investors in May it forecast a profit between $2.4 to $2.5 billion.
The annual result is a dramatic turnaround for the national carrier, which reported a loss of $860 million a year ago.
Revenue for the airline doubled to $19.8 billion in the last financial year, while net debt fell to $2.89 billion.
Qantas also reported fares had fallen by "around 12 per cent" after increasing capacity, moderating fuel costs and the stronger Australian dollar.
It noted domestic airfares were 4 per cent higher than they were pre-COVID, while international fares had risen by 10 per cent "in inflation adjusted terms".
The money Qantas earnt from seat selection, extra baggage, leg room and snacks (known as ancillary revenue) rose by 38 per cent compared to 2019.
It is the first time since 2019 that Qantas has reported an annual profit, after three years of sustained losses during the COVID-19 pandemic which grounded the aviation industry.
'Not the airline you used to be'
Speaking on Thursday morning, outgoing Qantas CEO Alan Joyce acknowledged that Qantas had disappointed its customers during its COVID recovery.
"That startup [after COVID] for every airline, has not been as smooth as we would like it," he said.
"We didn't deliver to the high expectations our customers wanted, I had to apologise for that.
"But the people of Qantas are fixing that. It's not quite there where we needed to be ... but we still have work to do."
Amelia and Jamie Buchanan were loyal Qantas customers for years, but have been disillusioned with the airline's service after spending months seeking compensation for cancelled and delayed flights last year.
"I'd say I'm out of pocket between $2-3,000," Ms Buchanan says.
"I know it doesn't seem like a lot, but in this day and age, it can be quite a significant amount of money to some people."
After a late flight cancellation in November, Ms Buchanan rebooked herself on another airline to make it in time for an international conference.
Their trip home was also fraught with issues when their return flight was delayed, meaning they missed their connection home to Hobart.
Qantas paid for a night's accommodation in Melbourne, but the pair say that is a fraction of what they are owed by the airline.
"It's been very disappointing, it's made me feel quite sick to my stomach," she said.
"I don't feel like I have any faith in the airline anymore.
"In the past, they've been fantastic. We haven't had any issues, their customer service has been great.
"Just of late, I just feel that they just don't care, that they just want to essentially just fob you off because they can."
Mr Buchanan said the airline was at odds with its world-renown branding, and hopes incoming CEO Vanessa Hudson will improve the customer experience when she takes the helm.
"Their motto is 'the Spirit of Australia' and I think they're acting in a way that's very disingenuous to that statement," he said.
"That's not at all Australian to be posting record profits at the expense of your customers.
"I just really hope that the new CEO takes her statement seriously of looking after customers as a focus of her new mandate.
"You're not the airline that you to used to be."
Demand to travel remains 'robust'
Thursday's annual results for the airline are the last from Mr Joyce as CEO before he hands over to its Ms Hudson, its current chief financial officer, in November.
"These results show a substantial turnaround in both our finances and service over the past year," Mr Joyce said.
"Flight delays and cancellations have largely returned to pre-COVID levels and we've shifted from heavy losses to a strong profit and pipeline of investment worth billions of dollars.
"Travel demand is incredibly robust and we've taken delivery of more aircraft and opened up new routes to meet it."
Mr Joyce said customer satisfaction had "improved significantly", and the airline's staff had done a "superb job under very difficult circumstances".
Qantas also used its annual results to confirm the order of 24 aircraft, consisting of 12 Boeing 787s and 12 Airbus A350s, with deliveries expected in the 2027 financial year. The airline has not confirmed how much the new planes will cost but has said it is a "multi-billion-dollar order".
"It's because we're in a strong financial position that we're able to invest in new aircraft, new destinations and new training facilities — all things that will make us better in the future," Mr Joyce said.
Qantas will not pay corporate tax on its earnings last financial year, with losses in years prior allowing it to "carry forward" tax losses.
"In [financial year] 25 we will be paying corporate tax again," Mr Joyce told The World Today.
The airline will not pay a dividend to shareholders, but will provide a $500 million buyback.
Bumper profits at a turbulent time
Qantas's annual results come after Mr Joyce was summonsed to appear before the Senate Inquiry on the Cost of Living, after Qantas's offer of another executive was rejected.
The airline said forcing someone who is not a public official to appear before a Senate committee is unprecedented, but confirmed Mr Joyce would attend.
He will appear before the committee next Monday, August 28.
Qantas's earnings come at a turbulent time for the airline, after another year plagued by flight cancellations and delays, and unredeemed flight credits.
The airline has also been widely criticised for receiving $2.7 billion in taxpayer-funded government subsidies during the pandemic, with $855 million alone from JobKeeper.
Secretary for the Transport Workers Union Michael Kaine said its profit should warrant the airline paying back the billions of dollars in taxpayer support to the government.
"Qantas owes a great debt to the Australian public. Every dollar of profit reported today should refund the public purse," he said.
"If Qantas won't pay it back, it should at the very least return quality jobs and service standards to the once-trusted airline."
Qantas has previously said it had no plans to repay the government subsidies, which it received when the airline was not profitable.
Its profit result follows a class action being lodged against Qantas on Monday by Echo Law for not refunding tickets for cancelled flights during the COVID-19 pandemic, claiming it was against Australian consumer law.
Qantas has rejected the allegations.