Qantas Airways, the esteemed Australian airline, has recently announced an upgrade of its first-half domestic revenue projections, alongside intentions to recommence dividend payments in the latter half of the fiscal year. This news has propelled the company’s shares to an all-time peak.
With fresh leadership at the helm, the well-known Australian airline has been making strides in restoring its reputation, which was previously tarnished over the past year and a half due to various legal, regulatory, and customer-related challenges.
The carrier has reported a stronger-than-forecasted domestic travel demand and has also reduced its first-half jet fuel expenses following a decline in global prices. These reductions have resulted in an estimated A$2.55 billion ($1.69 billion), a noteworthy decrease from the previous A$2.7 billion prediction.
Qantas shares soared to a record A$8.04, marking a 1.6% rise and the second record-breaking increase within a week.
In terms of revenue for each available seat kilometre, Qantas forecasts a 3% to 5% increase for its domestic operations for the first half, ending December 31, compared to last year. This is an upgrade from the 2% to 4% range predicted in August.
However, the airline’s international revenue per available seat kilometre is projected to decline by 7% to 10% due to the competition restoring capacity and airfares retreating from post-pandemic peaks.
Qantas CEO, Vanessa Hudson, affirmed during the airline’s annual general meeting that despite market challenges, the group was performing as expected in the first half. She highlighted the strong demand for Jetstar, Qantas’ domestic operations and corporate travel services.
The airline’s leadership expressed no opposition to Qatar Airways proposed 25% stake in Virgin Australia, their chief domestic competitor. They believe Qantas’ investment plan positions it well for competition.
In a departure from the past, the annual meeting was less contentious than the previous year, when shareholders heavily criticized then-Chair Richard Goyder over a series of crises and voted down the airline’s executive pay plans.
Qantas is set to reinstate fully franked dividends from the second half of the current fiscal year, a practice that was put on hold in 2019 due to the pandemic.
Chair John Mullen assured shareholders of the airline’s commitment to learning and growing from past mistakes. With a strong balance sheet and a renewed reputation, Mullen expressed optimism for Qantas and Jetstar’s future.
Qantas also revealed that it has completed 45% of its A$400 million share buyback at an average price of A$7.23, with plans to finalize it by year-end.
