Qantas delivers record $2.47b profit on back of soaring demand and high ticket prices

Qantas Airways has soared out of the disrupted pandemic era to post a record $2.47b full-year underlying profit, backed by strong travel demand and high ticket prices. The 2022-23 results mark a stark change from a year earlier, when it fell to a $1.86b loss. “This is a remarkable turnaround, three years in the making. And it’s been hard,” Qantas’ outgoing CE Alan Joyce said. “Fundamentally, travel demand is extremely robust.” Australian international air fares have surged even after major costs, including jet fuel, have fallen from the high prices recorded early last year after disruptions to global oil supply. All financial metrics accelerated at Qantas. The return-on-invested-capital measurement, which tracks how well a company generates profits, increased to 103.6%, an almost mythical figure. This compares with a return of less than 20% before the pandemic. Qantas’ domestic earnings before interest and taxes (EBIT) – an indication of profit margins – jumped to 18.2%, representing a 50% increase in profit margins over the past six years. Typical profit margins for domestic aviation operators in Australia have traditionally been between 8 and 10%. International margins including freight were at 11.7%, while Jetstar’s margin was 9.5%. The Qantas results will be a bitter pill for some travellers, who have experienced a disrupted period of travel, punctuated by very high air fares.<br/>