Praveen Menon and Echha Jain
(Reuters) – New Qantas Airways CEO Vanessa Hudson (NYSE:) posted lower profits in her first results on Thursday but gifted shareholders with a AU$400 million ($262.2 million) share buyback and vowed to increase spending on customers. what an Australian flag carrier looks like. fix your damaged reputation.
Hudson, the airline’s first female chief executive, took over from long-serving Alan Joyce late last year after one of the most reputation-damaging years of the year.
The company is defending an antitrust lawsuit over the sale of tickets for already canceled flights, and the court also found that the airline illegally fired 1,700 ground employees in 2020.
“It’s fair to say that over the last six months I’ve been listening a lot more than I’ve been talking,” Hudson said at a press conference at a Qantas hangar at Sydney Airport.
“Listening to our customers and listening to you, our people, both on the planes at our airports and in the investments we make to bring the voices of our people to the voices of our customers in everything we do,” she said.
She said Qantas would introduce new interiors for its A220 aircraft, speed up the rollout of Wi-Fi on international flights, update its digital platforms and offer other new loyalty schemes.
Qantas’ core pre-tax profit was A$1.25 billion ($785.9 million) for the six months ended December 31, down 12.8% from a record A$1.43 billion a year earlier as it saw a surge in travel following the pandemic .
Profits fell slightly short of the consensus estimate of A$1.26 billion, Jeffries said.
“With trading conditions remaining good and the balance sheet strong enough to fund the buyback and higher capex, Qantas remains in a much stronger position than implied by the current share price multiple,” said Anthony Moulder, equity analyst at Jefferies.
Qantas shares are trading positively, up 1.8% in early trading.
NORMALIZATION OF TARIFFS
Qantas said delays in the delivery of the Airbus A350 would impact Project Sunrise, its high-profile plan for the world’s longest non-stop flights between Sydney and London.
Air New Zealand, which also saw profits fall 38% on Thursday due to weaker travel demand and rising costs, added that Boeing’s (NYSE:) delay in 787 Dreamliner delivery would impact its operations.
Hudson said the decline in revenue in the first half was due to normalization of tariffs and capacity.
Tariffs have fallen more than 10% since peaking in late 2022. Lower fares contributed to a fall in Qantas’ revenue per free passenger kilometer, impacting the company’s bottom line by about A$600 million.
But travel demand remains strong across all sectors this year, Hudson said, with leisure continuing to lead the way and business travel now approaching pre-COVID levels.
The airline was criticized for its high cancellation rate during the peak travel month last December, particularly its low-cost arm JetStar.
Hudson said the cancellation was due to weather events that were beyond the airline’s control.
“Qantas is the most on-time airline of the last 12 months, so we are doing much better than our competitors,” Hudson said.
“But this is not our guideline. Our focus is to get up to where we were pre-COVID and actually get better and even exceed that, and do it consistently.”
($1 = 1.5270 Australian dollars)
($1 = 1.5253 Australian dollars)