Friday, August 30, 2024 Qantas’ FY24 financial results show a 16% drop in underlying profit before tax and a 28% decrease in statutory net profit, mirroring trends at Air New Zealand. On Thursday, Qantas, Australia’s flagship airline, released its financial results for the year ending June 30, 2024 (FY24). Echoing the recent trends seen at Air New Zealand, Qantas experienced a 16% decline in underlying profit before tax and a 28% decrease in statutory net profit after tax compared to the previous fiscal year.
Analyzing the figures, from July 1, 2023, to June 30, 2024 (FY24), the Qantas Group reported an underlying profit before tax of AU$2.08 billion ($1.41 billion) and a statutory net profit after tax of AU$1.
25 billion ($850 million). This contrasts with AU$2.47 billion ($1.
68 billion) and AU$1.74 billion ($1.18 billion) reported in FY23.
Qantas linked the drop in earnings to a moderation in fares as market capacity increased, higher expenditure on customer initiatives, and a reduction in freight revenue. Although the previous financial year saw record profits, it was also marked by significant controversy involving Qantas and its former CEO, Alan Joyce. Issues such as reliability concerns, refund delays for canceled flights, and customer complaints dominated headlines and news broadcasts.
Over the past year, Qantas has invested AU$230 million ($156 million) in enhancing customer services, implementing over 120 initiatives aimed at improving service levels. This investment has led to changes such as updated route-specific menus, increased availability of frequent flyer seats, a revamp of digital platforms, and the recruitment of 200 staff to manage customer credits and disruption recovery. Additionally, Qantas introduced baggage tracking, resulting in a more than 30% reduction in mishandled baggage compared to the previous year, with performance now surpassing pre-pandemic standards.
Fleet renewal has been a major focus for Qantas, with significant investments in new aircraft. In FY24, the airline welcomed 11 new planes, with plans to add 20 more in the coming year. Additionally, the remaining two Airbus A380s will be reintroduced over the next 18 months.
Jetstar now operates 15 A321LRs, while regional carrier QantasLink has put three new Airbus A220s into service. In June, QantasLink also announced an investment in 14 mid-life De Havilland Dash 8-Q400 turboprops to replace the smaller Q300 and Q200 aircraft, reinforcing its dedication to maintaining regional connectivity across Australia. About half of Jetstar’s new A321LRs have replaced older Airbus A320s, generating an additional AU$7 million ($4.
8 million) in EBIT per aircraft due to improved fuel efficiency and economies of scale. Qantas is also preparing for the arrival of its first Airbus A321XLR, expected in April next year. Pilots are already training on a new CAE 7000XR Series simulator in Sydney.
Over the next three years, Qantas will train more than 240 A321XLR pilots at its Sydney Flight Training Centre. In May 2024, the Qantas Group achieved pre-pandemic levels of international capacity. However, this revenue boost was counterbalanced by increased competition, leading to an 11% decrease in unit revenue, though the decline moderated between January and June.
The ultra-long-haul Boeing 787-9 nonstop routes from Perth to London, Rome, and, as of July, Paris, are experiencing high demand. This strong performance is boosting confidence in the upcoming Project Sunrise flights, set to launch in mid-2026. Jetstar’s international network has expanded notably, thanks to the continuous addition of new Airbus A321LR long-range narrowbodies.
The enhanced range of the A321LRs has enabled the airline to extend its short-haul international services to destinations such as Fiji and Bali. As a result, Boeing 787-8s have been reassigned to long-haul nonstop routes, including flights from Australia’s east coast to Japan and South Korea. To ensure the smooth integration of its new aircraft, Qantas made substantial investments in its workforce, driven by the need to support these additions.
Over the year, the airline created up to 2,000 new full-time positions, including pilots, engineers, cabin crew, and airport staff, while also promoting 2,300 existing employees. During FY24, Qantas received 150,000 applications for 4,700 advertised roles. Looking forward, Qantas anticipates stable demand across its portfolio, projecting a 2-4% increase in Group domestic unit revenue for FY25.
However, international unit revenue is expected to decrease by 7-10% due to the continued return of market capacity. This decline is expected to slow in the second half of FY25 and turn positive in the fourth quarter. In a noteworthy response to the sudden collapse of its low-cost competitors Bonza and Rex this year, Qantas and Jetstar stepped in to provide free flights to over 45,000 stranded passengers.
This gesture is likely to significantly restore public confidence in Qantas, demonstrating a commitment to customer service beyond just financial performance and marking a significant recovery from the challenges faced a year ago..
