Qantas experiences 28 percent drop in profit due to turbulence

Australia’s national carrier saw a 28 percent decrease in profit to $1.25 billion after tax in the 2024 financial year.

Under Vanessa Hudson’s leadership, following Alan Joyce, Qantas focused on enhancing customer service amidst challenges with the competition regulator.

In contrast, Qantas subsidiary Jetstar achieved its best performance yet due to an increase in demand for low-cost fares.

Hudson mentioned that this strong financial performance would enable Qantas to continue investing in its largest fleet renewal program ever.

She stated, “Qantas benefited from higher corporate and resources travel, as well as sustained high demand for international premium seats. Jetstar, on the other hand, achieved its record result by catering to the increased demand from price-sensitive leisure travelers and by reaping the benefits of its new aircraft.”

Additionally, the introduction of Classic Plus, offering millions of frequent flyer seats, contributed to increased member engagement and strong earnings for Qantas Loyalty.

Qantas reported a 10.4 percent operating margin, down from 13.5 percent in 2023 – a key indicator of revenue profit before interest and tax.

What Else Did Qantas Reveal?

Qantas delivered 16 planes in 2024, including new aircraft for Jetstar, QantasLink, and Qantas.

During the year, Qantas facilitated the repatriation of over 600 Australians from Tel Aviv and Noumea.

The airline plans to introduce international Wi-Fi on its A330s in South East Asia by 2025.

Qantas Domestic invested in fleet upgrades, food and beverage, disruption management, and technology innovations.

However, increased fuel costs were noted due to more regional flights, despite experiencing strong domestic revenue growth in the second half of the year.

Jetstar’s exceptional earnings were driven by robust revenue and profits from both domestic and international operations.

In the latter part of 2024, Jetstar expanded its routes to include flights to various destinations.

Qantas also enhanced its digital offerings, including updating its app and utilizing AI to improve customer interactions.

Travel Desire Remains

Qantas revealed stable travel desires among Australians in investor presentations (pdf).

Internationally, 49 percent expressed a desire to travel, while domestically, 61 percent desired interstate travel.

Qantas anticipates a 2-4 percent increase in domestic revenue in the first half of the financial year but expects a 7-10 percent decline internationally.

Qantas shares rose by 0.71 percent to $6.36 at 4:00 p.m., despite a 2 percent drop earlier in the day, with no dividend declared for shareholders.

Climate Investment

Qantas outlined its climate action plan and investments, including $100 million in a climate fund and donations to environmental charities.

Results Snapshot

Qantas reported an underlying profit before tax of $2.08 billion, a 16 percent decrease from the previous year. The company’s net debt was $4.1 billion in June 2024, within the target range.

Qantas conducted share buy-backs totaling $869 million and expects to deliver more in 2025.