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Qantas chief executive Vanessa Hudson has revealed a net profit of $1.25 billion in her first annual financial results since taking over from former chief executive Alan Joyce in September last year.
The result was a 28 per cent drop from the record $1.74 billion Qantas profit Joyce delivered last year, which ultimately led to his death and began a tumultuous period for the battered company as customers, shareholders and employees rallied against the once-beloved brand amid widespread frustration over customer service and pricing.
Qantas CEO Vanessa Hudson. credit: Oscar Coleman
The company said it made $2.1 billion in underlying pretax profit for the year ended June 30, down 16 percent from a record year ago, citing lower airfares as the market returned to full capacity and lower cargo revenues. Its overall revenue jumped 10.7 percent to $21.9 billion. Operating margin fell to 10 percent, from 13.5 percent in 2023.
The results suggest Qantas missed profitability targets for its international and domestic divisions. Qantas International had targeted an 8% EBIT margin but instead achieved 6.4%, citing the return of global carrier capacity and lower cargo revenues. Qantas and Jetstar’s domestic arms combined achieved an EBIT margin of 14%, below their target of 18%.
The result was impacted by $198 million in legal judgments over the year, including $128 million to settle the airline’s court case with the consumer watchdog and a $70 million increase to cover the costs of unlawfully dismissing ground handlers. Those figures were not included in Qantas’ underlying earnings.
Hudson said the company was focused on restoring the brand after a painful end in 2023, which culminated in Joyce’s departure, a Supreme Court appeal loss after 1,700 workers were wrongfully dismissed, and federal court proceedings after a case brought by a consumer watchdog.
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“This year we have focused on striking the right balance in delivering for customers, employees and shareholders while building a better and stronger Qantas Group,” Hudson said in a statement to the Australian Stock Exchange on Thursday morning. “Restoring confidence and pride in Qantas as the national airline is our priority.”
The resulting profits will allow the group to invest in fleet renewal, it said. Qantas has faced criticism from investors and customers over the past two years for delaying the purchase of new aircraft, leaving its fleet at an average age of 15 years.
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