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Qantas shares have soared to their highest levels in more than a year after the carrier said it expects to return to the black six months earlier than expected and post more than $1 billion in profits in the December half.
In a trading update to investors on Thursday morning, Australia’s largest airline forecast an underlying profit before tax of between $1.2 billion and $1.3 billion for the first six months of its financial year, despite the burden of higher jet fuel prices and the high inflation’s impact on consumer spending.
The forecast beat analyst expectations, which saw Qantas returning to profit by the end of June 2023. Its shares surged by as much as 12 per cent, and were trading 9.9 per cent higher at $5.68 by mid-afternoon.
“Delivering pre-COVID levels of performance requires more than pre-COVID levels of resources,” says Qantas boss Alan Joyce.Credit:Peter Rae
Chief executive Alan Joyce dismissed suggestions the airline’s growth may inflame tensions with employees and travellers who’ve been subject to poor service and working conditions, arguing the operational issues experienced earlier this year wreaked havoc across the entire industry.
“What’s become clear is delivering pre-COVID levels of performance requires more than pre-COVID levels of resources,” Joyce said.
He also denied that management was at odds with staff, despite multiple threats of industrial action over working conditions and pay, and ruled out quitting as chief executive for the second time in a matter of months.
“There is disengagement with a couple of union leaders, not with our employee base,” the Qantas boss said. “Most employees are very pleased we’re offering $10,000 bonuses and significant improvements to staff travel. Don’t misrepresent a couple of union members with a grudge as representative of employees.”
Seeking to appease employees, Qantas also announced a wage adjustment for about 20,000 employees on Thursday, which will see annual pay rises increase from 2 per cent to 3 per cent in recognition of the airline’s quick recovery, at a cost of about 40 million a year. About 5000 employees who have already agreed to a 2 per cent increase as part of their enterprise agreements will be automatically bumped up to 3 per cent.
But the upgrade has failed to impress some employee groups, with the Australian Services Union pointing out the pay increase remains below inflation.