Qantas HY26 results

[FlyingKangaroo]

This is a bit harsh but first of all, some of those Covid credit holders may no longer even be alive or able to travel... five years is a long time when you're getting pretty up there, and Qantas would have no way to know. Locked in limbo forever.

Pax based overseas may also never have found an opportunity to use them. We had a trip planned to South America that never eventuated in the form we had intended; had I had credits with indefinite expiration on Aerolineas Argentinas, they'd still be sitting there (instead, they just held onto the money and that was that).

Add to that credits people lose (it happens, especially for business travel I suspect -- just forgotten, or former employees, etc.) and very small balances people never bother to use and I can see that all adding up to those figures pretty fast when you consider how much revenue they collect in a year.

QF shot itself in the foot being so difficult during those years, and now find themselves in the unenviable position of having to maintain what is perhaps the most generous lingering Covid credit system in the industry. Diddums, I suppose.

 

[RooFlyer]

Sorry, originally a duplicate post.

Qantas to create 8500 jobs and overhaul frequent flyer program after record profit

Qantas has delivered a record half year profit of $1.46bn, up $71m on the previous corresponding period, as it announced plans to re-establish a cabin crew base in Asia, create 8500 more jobs by 2030, and allowfrequent flyers to earn status credits on the ground.

There are also plans to add Las Vegas to the airline’s network, with a new seasonal route from Sydney to operate between December and March, saving up to five hours in flight time.

Statutory profit after tax was up $2m at $925m, with shareholders to score a fully franked dividend of 19.8c a share.

The underlying profit result just beat the 2023 record achieved under former CEO Alan Joyce, of $1.43bn.

Low fares carrier Jetstar and the Qantas Loyalty division both increased earnings over the six months by 12 per cent to $492m and $286m respectively, while Qantas Domestic remained the biggest money spinner for the group generating earnings of $676m.

Qantas International saw earnings dip 8 per cent to $300m, which was attributed to wage escalation, industry pressure and investment in training for Project Sunrise flights.

But can't please everybody

Qantas dumped by investors after mixed result

Qantas has fallen more than most companies listed on the S&P/ASX 200 in afternoon trade on Thursday, as investors react to its first-half results. They delivered a mixed bag with the airline’s first-half profit before tax of $1.45 billion coming in ahead of expectation, while international operations lagged.

Citi analyst Samuel Seow said domestic earnings before interest and tax were in line with expectations at $676 million, supported by domestic revenue per available seat kilometre rising 2 per cent and capacity growth of 4 per cent. International EBIT was weaker at $300 million versus a consensus of $344 million, affected by higher wages and investment costs, with revenue per available seat kilometre broadly in line but operating margin down 90 basis points.

 

[moa999]

Not that much of a suprise. Profit has basically flat lined - no growth starts to hurt your P/E ratio.
And obvious signs of cost increase hitting margins.

 

[RooFlyer]

Joe Aston covers the profit in today's 'Rampart'. Unfortunately I don't can't afford to subscribe, so just see the teaser

Qantas' Grand Theft Aero finale

Qantas' first-half result delivered on Thursday morning was widely described by the Australian media as a "record profit", though of course that is true only on an "underlying" basis. On a statutory basis, it was actually lower than Qantas' profit for the previous December half ($1.31 billion versus $1.32 billion).

The delta between Qantas' statutory profit and "record" underlying profit in 1H26 is a full $149 million of exclusions, taking us back to the bad old days of Mascot bunker accounting when the company's chief financial officer was … *checks notes*… Vanessa Hudson!

He quotes from his book:

Underlying or 'adjusted' profit is whatever management would like it to be. It is a magical number, a stranger to International Financial Reporting Standards, and is arrived at by excluding from a company's legal profit any major items of expenditure that the company deems 'one-off', 'non-recurring', 'significant', 'extraordinary', 'abnormal', 'exceptional' or just plain inconvenient.

 

[IainF]

These are the 2 slides I find useful

How much RRIA?
that seems to have flatlined
Still crazy amount of COVID credits in the bank ….View attachment 499018View attachment 499019

I wonder which highly gifted toddler in the CFO's marketing team came up with "the flywheel effect" ?

 

[CaptJCool]

I wonder which highly gifted toddler in the CFO's marketing team came up with "the flywheel effect" ?

It was the hamster … straight face

 

[elanshin]

At a surface level, shouldn't we be expecting profits not to be as high given slight softening of travel demand as well as bigger capex spends from new planes to lounges and so forth.

 

[kamchatsky]

At a surface level, shouldn't we be expecting profits not to be as high given slight softening of travel demand as well as bigger capex spends from new planes to lounges and so forth.

Agree on this. I was looking at the domestic air fares recently and I was completely put off by the high prices that both QF and VA charges these days. With the cost-of-living crisis, I think domestic travel will continue to soften.