The Qantas Airways Limited (ASX: QAN) share price is having a strong session on Thursday morning.
At the time of writing, the airline operator's shares are up 4% to $5.80.
This follows the release of the company's half-year results.
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Qantas share price charges higher on results
- Revenue up 12.3% to $11,127 million
- Underlying profit before tax down 12.8% to $1,245 million
- Statutory profit after tax down 13.2% to $869 million
- No interim dividend but $400 million on-market share buyback
- Net debt of $4 billion
What happened during the half?
For the six months ended 31 December, Qantas reported a 12.3% increase in revenue to $11,127 million.
This was driven by growth across the business compared to the prior corresponding period.
Qantas Domestic delivered a 3.4% increase in revenue to $3,758 million, Qantas International posted a 14.2% lift in revenue to $4,340 million, Jetstar revenue was up 18.6% to $2,486 million, and Qantas Loyalty revenue jumped 24.8% to $1,271 million.
The company's earnings didn't grow over the prior corresponding period. Its underlying profit before tax was down 12.8% to $1,245 million for the half.
Management notes that this reflects fares and capacity continuing to normalise. Lower fares contributed to reduced revenue per available seat kilometre, which had around a $600 million impact on profit, while freight yields fell by $146 million.
This was partially offset by increased flying of $485 million and unwinding of transition costs from the post-COVID restart of $179 million. Unit cost (excluding fuel) fell by 5.2% year-on-year.
Management commentary
Qantas' new CEO, Vanessa Hudson, acknowledged the company's failings last year but was pleased with recent progress. She commented:
We know that millions of Australians rely on us and we've heard their feedback loud and clear. There's a lot of work happening to lift our service levels and the early signs are really positive. Our customer satisfaction scores have bounced back strongly since December and we have more service and product improvements in the pipeline.
Having the financial strength to keep investing is key, and that makes the strong performance that all business units had in the first half so important. We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022. At the same time, we've seen a cost benefit from fewer cancellations and delays, and scale benefits as more international flying returns.
Outlook
Management advised that it is seeing strong travel demand across the company's portfolio.
Unit revenue is expected to remain stable for domestic and continue to normalise for international as market capacity returns.
