Qantas shares (ASX: QAN) gained 0.79% today, bringing YTD gains up to an impressive 19%. As the stock continues to close in on 52 week highs, Australia’s flagship airline reported a considerable drop in its net profits, citing various factors including reduced fares post-Covid. Despite the financial setback, the airline emphasised on its ongoing efforts to enhance customer experiences and regain public trust.
For the financial year ending June 30, Qantas disclosed a 28 percent decline in net profit, which amounted to Aus$1.25 billion (equivalent to $US849 million). This decrease in profit is attributed to several elements such as lower fares in the post-pandemic market, customer-focused initiatives that incurred additional costs, increased market capacity, and a downturn in freight revenue.
Nonetheless, Qantas observed a 10.7 percent surge in revenue, reaching Aus$21.9 billion. This uptick suggests a resilient travel demand, bolstered by Australians prioritizing spending on travel. Looking ahead, Qantas forecasts stable bookings and consistent travel demand, indicating a promising scenario for the airline industry.
A strategic change in leadership marked the airline’s shift towards repairing its image, with Vanessa Hudson taking over the helm from Alan Joyce as Chief Executive. Under Joyce’s administration, the airline had encountered criticism due to perceived issues with service quality, inflated ticket prices, and the treatment of staff. Vanessa Hudson, the new CEO, has now made it a priority to restore Qantas’ stature and rebuild consumer confidence in the airline.
Furthering their commitment to address past performance concerns, Qantas announced it would reclaim over Aus$9 million in bonuses previously awarded to Alan Joyce. Additionally, in a gesture highlighting the significance of its workforce, Qantas will offer a $500 travel voucher to all its 23,000 non-executive employees, acknowledging their contributions during challenging times.
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In an attempt to further elevate customer service quality, Qantas has laid out plans to amplify investment in improving customer experiences, services, and staff support for the forthcoming year. The airline is keen on driving earnings growth and enhancing profit margins. According to Vanessa Hudson, this growth will be achieved through strategic fleet investment instead of resorting to increased airfare costs.
The focus for Qantas in the upcoming period remains to innovate and offer superior service that epitomizes the airline as trustworthy and dependable. With a clear strategy in place, Qantas aims to navigate through the financial turbulence, ensuring the satisfaction of both shareholders and customers alongside its standing as a leader in the aviation sector.
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