Qantas has posted a record underlying half year pre-tax profit of $1.4 billion, but has warned that ticket prices will not revert to pre-pandemic prices.
Releasing its half-year results to the market this morning, Qantas reported an underlying profit before tax of $1.43 billion and a statutory profit after tax of $1.0 billion.
Net debt declined to $2.4 billion, and an on-market share buy-back of up to $500 million was announced.
READ MORE: Qantas boss defends $100m cash splash amid soaring flight prices
Despite the airline coming back into the black, it warned that while ticket prices will "moderate", fares will not return to levels seen in 2019.
"Fares expected to moderate during 2H23 as capacity increases but will remain significantly above FY19 levels," Qantas told shareholders in its outlook.
In his speech CEO Alan Joyce said airline fares in Australia were up 20 per cent in Australia compared to 2021, largely due to the price of fuel and an "imbalance" between supply and demand.
"Cost of living is an issue across the economy at the moment, and we know air fares are part of that discussion," he said.
"Fares will keep trending down as more airlines can unlock capacity – which relies on things like supply chain for aircraft, labour availability and training pipelines. For Qantas, we started adding more flying back in January and have another step up in March."
READ MORE: Electrical fire breaks out at Melbourne airport
Joyce said it had been a "long and frankly difficult" journey to return the airline to profit.
"This is the recovery our people, our shareholders – and in many respects, our customers – have been waiting for," he said.
"Because this result isn't just about a single number. Ultimately, it's about getting back to our best by reinvesting in the national carrier, which I'll come back to in a moment."
He said a large amount of work had gone into ensuring the business could bounce back from the COVID-19 pandemic, which grounded airlines globally.
"This is a huge turnaround considering the massive losses we were facing just 12 months ago," he said.
"When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned. That's effectively what's happened, but it's the strength of the demand that has driven such a strong result.
"Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn't kept up with demand. Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares."
Josh Gilbert, Market Analyst at eToro, said Qantas was reaping the benefits of the world reopening.
"After enduring a significant loss of profits during the pandemic period, Qantas is now reaping the rewards of the world re-opening, beating profit expectations and drawing back investors," he said.
"Some investors may be disappointed not to see the return of Qantas' dividend, but a strong fiscal year could see it reinstated.
"Airlines may not have been at the top of many investors' lists over the last three years but these results from Qantas signify that there is plenty of opportunity ahead thanks to strong, renewed travel demand."
