Qantas (ASX:QAN) increases profit expectation by AU$150M, shares up

2 min read | November 23, 2022 01:30 PM AEDT | By Sonal Goyal

Qantas (ASX:QAN) increases profit expectation by AU$150M, shares up — Image source: © Mauriehill | Megapixl.com

Why has Qantas upgraded its guidance?

The company expects to report underlying profit before tax of AU$1.35–AU$1.54 billion in 1HFY23. The profit range has been increased by AU$150 million compared to the range shared in early October 2022. The company said it was upgrading its guidance because travel demand was strengthening.

Consumers are prioritising travel over other spending categories. Also, the limit on international capacity is leading to increased leisure demand.

The company expects net debt to fall to AU$2.3–AU$2.5 billion by 31 December 2022. It represents an improvement of AU$900 million over the recent update. The acceleration in revenue inflow drives expectations.

In comparison to FY19, the fuel cost is significantly higher and is expected to reach AU$5 billion in FY23. Qantas said that it would be a record high for the company when the airline’s international capacity is approximately 30% less than pre-COVID-19 levels.

Qantas ranked the most on-time domestic airline

The company reported continuous improvement in its operational performance as it was declared the most on-time domestic airline in October. Qantas said that it would maintain these levels by investing AU$200 million in rostering extra staff, reserving aircraft and continuing recruitment.

This investment is expected to assist during the busy Christmas period and limit the effects of extreme weather conditions.

What else?

Qantas informed the market that it had recently finalised an agreement with Jetstar pilots for three years as a part of its improved pay policy.

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