In a financial disclosure unveiled on Thursday (22 February 2024), the renowned flag carrier Qantas Airways Ltd (ASX: ASX:QAN) of Australia reported a 12.8% dip in its first-half profits. Simultaneously, the company revealed plans for an additional on-market buyback, earmarked for a substantial sum of up to AU$400 million. The descent in first-half earnings was ascribed to the normalization of fares and capacity, as stated by the airline.
Key financial metrics
For the six months concluding on December 31, Qantas Airways presented an underlying profit before tax amounting to AU$1.25 billion ($785.88 million), in stark contrast to the AU$1.43 billion recorded in the preceding year.
Contrary to the A$1.26 billion consensus estimate by Jefferies, the airline's financial performance fell slightly short. This deviation can be attributed to the impact of lower fares, contributing to a decrease in Qantas' revenue per available seat-kilometer, effectively denting the company's bottom line by approximately AU$600 million.
Amidst a series of controversies, including strike threats by pilots within its unit, the centenarian airline foresees achieving a net debt at or below the midrange of the targeted spectrum by the culmination of fiscal 2024. This comes as the company discloses a net debt standing at AU$4.0 billion during the initial half of the fiscal year.
Outlook
In navigating these financial waters, Qantas Airways employs strategic measures, balancing the intricacies of profit margins, revenue generation, and fiscal responsibility. As the airline grapples with internal challenges, it anticipates a fiscally sound conclusion to the current fiscal year, showcasing resilience amid market fluctuations.