Qantas Airways, Australia’s flagship carrier, has forecast a record annual profit for fiscal 2023 and increased its share buyback programme by up to A$100 million ($67.83 million). The airline expects an underlying profit before tax of A$2.43 billion to A$2.48 billion, slightly higher than a Refinitiv estimate of A$2.40 billion. This is nearly A$850 million higher than the carrier’s 2018 record of A$1.60 billion.
The better-than-expected forecast has not gone down well with the Transport Workers Union (TWU), which is currently involved in a court battle with Qantas regarding the sacking of nearly 1,700 ground staff at the peak of the pandemic. The union has called for the carrier to return welfare received during the pandemic.
Qantas has maintained that of the nearly A$2 billion it received from the government, about half of it was to maintain critical passenger and freight flights to keep exporters connected to overseas markets. The airline has also said that half of the A$850 million, received as JobKeeper subsidy, went directly to the staff.
The trading update by Qantas pointed towards higher demand, better cost management and lower debt. Jet fuel prices remained elevated, but a recent drop may deliver cost improvements in the second half. Qantas’ net debt is expected to be between A$2.70 billion and A$2.90 billion by June-end, significantly below a revised target range of A$3.70 billion to A$4.60 million.
Despite the positive cues, shares of Qantas were down 2.1% at A$6.365, versus a 0.1% gain in the benchmark stock index.