The Qantas Airways Limited (ASX: QAN) share price will be closely monitored Thursday after the airline revealed a mixed set of results for an action-packed 2022 financial year.
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What did the company report?
- Revenue up 53.5% to $9.1 billion
- Underlying loss before tax up 4.8% to $1.86 billion
- Statutory loss after tax 49.2% down to $860 million
- Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) down 31.5% to $281 million.
The airline announced that no dividend will be paid. However, it will execute an on-market buyback of shares worth up to $400 million.
What else happened in FY22?
Understandably for an airline, the biggest events for Qantas over the financial year were not necessarily within the business itself.
The year saw both the Delta and Omicron variants of COVID-19, as well as vaccinations, have a massive impact on the travel industry. The period started with heavy restrictions on movement between states and internationally, but ended with all of those measures removed as Australia transitioned to a post-pandemic life.
However, Qantas and the airports were left short-staffed as travel made a huge comeback in 2022. Both the April and July school holidays saw queues snaking out of the terminal at places like Sydney Airport.
The congestion, lack of staffing, and poor weather also meant many delayed and cancelled flights. The Motley Fool reported previously that more than 54% of Qantas flights took off late last month, to go with a cancellation rate of 5.6%.
The damage to the Qantas brand has been so substantial that earlier this week chief executive Alan Joyce apologised to frequent flyers and offered remediation such as $50 vouchers, extended status, and lounge access.
The airline also proposed to buy regional carrier and wet lease provider Alliance Aviation Services Ltd (ASX: AQZ) but the ACCC has recently expressed its concerns over the deal.
What did management say?
Joyce said:
This result takes the statutory loss before tax impact of COVID on the Qantas Group to nearly $7 billion and our total revenue losses to $25 billion. These figures are staggering and getting through to the other side has obviously been tough.
We always knew travel demand would recover strongly but the speed and scale of that recovery has been exceptional. Our teams have done an amazing job through the restart and our customers have been extremely patient as the whole industry has dealt with sick leave and labour shortages in the past few months.
Safety remains number one, but our service isn't at the level expected of the national carrier. There is a lot of work happening to bring us back to our best, including hiring more people, rolling out new technology and reducing domestic flying so we have more sick leave cover.
What's next?
Qantas stated that going into the current financial year its balance sheet repair process is "effectively complete".
While it made no group-wide revenue or profit/loss forecasts for 2023, it predicted:
- Lower international flights revenue, averaging 75% of pre-pandemic levels
- Recovery plan to complete to meet $1 billion cost reduction target
- Underlying depreciation and amortisation expected to be $1.8 billion.
Qantas share price snapshot
The share price for Qantas has fallen 11.8% year to date. Most of that was attributable to mid-June when it fell 19.7% over just 10 days on the back of recession fears out of the United States.
