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Highlights:
- Qantas Airways Limited (ASX:QAN) has forecasted FY23 underlying profit before tax to be between AU$2,425 to AU$2,475.
- QAN believes that continued robust travel demand and the conclusion of the three-year recovery program will help achieve the estimated FY23 underlying profit before tax.
- The company has elevated the current on-market buyback by up to AU$100 million due to its robust balance sheet and positive outlook.
The flag carrier of Australia and the nation’s biggest airline by fleet size, Qantas Airways Limited (ASX: QAN), decreased by 2.307% and was trading at AU$6.350 on Tuesday, 23 May 2023, at 11:35 am AEST after it forecasted FY23 underlying profit before tax to be between AU$2,425 to AU$2,475.
Let’s dig into the ASX consumer stock-QAN FY23 earnings forecast in detail.
On Tuesday, the company, on the back of continued robust travel demand and the conclusion of the three-year recovery program, is anticipating steering the group towards FY23 underlying profit before tax of AU$2,425 to AU$2,475.
Further, the company added that flying activity has grown in the second half as new aircraft reach, more widebody jets come back from long operational reliability enhances. The airline’s domestic capacity will be more than pre-Covid levels by the close of 2H FY23, driven by a substantial rise in flying on main routes between Melbourne, Sydney, and Brisbane.
QAN said that international capacity would increase to more than 80% of pre-pandemic levels by the close of 2H FY23. The rate of increase will be marginally below plan because of some supply issues previously in the half period.
Though, QAN has notified an additional ramp up in flying from October this year onwards that will look at the company’s international capacity touching nearly 100% of pre-pandemic levels by March next year.
On the back of QAN’s robust balance sheet and the positive outlook, the company has elevated the current on-market buyback by up to AU$100 million. Together with the further buy-back announced, QAN’s net debt is now anticipated to fall between AU$2,700 million to AU$2,900 million on 30 June this year. It is substantially below the bottom offset by f its revised target range of AU$3,700 million and AU$4,600 million.
Though, jet fuel prices remain elevated, of late, falls will deliver a cost improvement in 2H FY23, which is partially offset by difficult movements in foreign exchange for an overall benefit of AU$150 million.
Further, QAN declared two changes to its board related to previous American Airlines Chief Executive Officer and Chairman, Doug Parker, who will join QAN’s board, bringing 35 plus years of aviation experience obtained in one of the world’s most dynamic aviation markets.
Further, in November, above seven-year serving QAN’s Chairman Michael L’Estrange AO will step down from the board at the expiry of his present term.
