Qantas unveils share buyback despite €833m loss

Qantas has reported a loss of more than one billion Australian dollars (€694 million) for the third consecutive year but the group, led by Irishman Alan Joyce, said a rebound in leisure and business travel had been stronger than expected, as it launched a A$400 million share buyback.

The Australian airline reported a A$1.2 billion (€833 million) loss for the 2022 financial year on Thursday — better than the A$2.3 billion it recorded in the year before. The carrier, which was 11 weeks from collapse at the height of the Covid-19 pandemic, laid bare the financial impact, saying cumulative losses in the past three years hit almost A$7 billion, while lost revenue is said to have been A$25 billion.

Chief executive Mr Joyce said: “To put that in perspective, on a statutory basis, Covid cost us more money in the past three years than we made in the five years before that. The fact we’ve been able to steer through this is remarkable.”

Qantas, which cut thousands of staff during the pandemic, has suffered a hit to its reputation this year as an unexpectedly strong rebound in travel has combined with staff shortages to cause chaos at the country’s airports and on its international routes. Lost bags, along with flight cancellations and delays, have seen Mr Joyce become the focal point for public anger.

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“It simply wasn’t good enough and for that we have apologised,” Mr Joyce said. He pointed to rising levels of improvement in customer service, including the ratio of “on time” flights rising from a low of 52 per cent to 66 per cent, compared with 80 per cent before the pandemic.

The airline known as the “flying kangaroo”, reported a stronger financial performance as cost savings of A$1 billion helped it cut debt to less than A$4 billion, from A$6.4 billion at its peak during the pandemic. That enabled the company to announce the A$400 million buyback.

Shares in Qantas gained almost 10 per cent to A$4.99 in early trading on Thursday.

Anthony Moulder, an analyst with Jefferies, said the combination of strong travel demand, easing operational issues and cost savings would return Qantas to profit in the 2023 financial year, despite fuel costs rising to A$5 billion.

Michael Kaine, head of the transport worker’s union, questioned the airline’s commitment to its workforce after it sacked thousands of staff during the pandemic.

“No one wants to see airlines making losses, but they do want to see them being responsible. That’s not how Joyce-led Qantas — which has methodically smashed working conditions and service standards — has been run for years,” he said.

Also on Thursday, Air New Zealand said its full-year pretax loss widened by 95 per cent to NZ$810 million (€505 million) despite a 9 per cent rise in revenue after the country reopened its international borders this year.

“As we’ve been seeing overseas, travel demand is much stronger than anyone anticipated. But we’re operating in a very tight labour market with high fuel prices, tough economic conditions and the highest levels of employee sickness in more than a decade,” said chief executive Greg Foran. — Copyright The Financial Times Limited 2022