Qantas Airways (QAN.AX) anticipated a record annual profit. On Tuesday, they increased its share buyback scheme by up to A$100 million ($67.83 million), courting demands from a workers’ union to repay billions in government epidemic help.
Underpinned by travel demand and fuel price reduction, Australia’s flagship carrier forecasts an underlying profit before tax of A$2.43 billion to A$2.48 billion for fiscal 2023, slightly better than a Refinitiv estimate of A$2.40 billion.
The expected profit exceeds the carrier’s 2018 record of A$1.60 billion by approximately A$850 million.
The Transport Workers Union (TWU), suing Qantas for firing nearly 1,700 ground personnel during the epidemic, was upset by the better-than-expected estimate.
The union demanded the carrier pack pandemic welfare in the amended buyback program.
“The $100 million share buyback scheme increase is a kick in the guts to illegally sacked workers who were told their jobs were sacrificed to save this amount of money,” stated TWU National Secretary Michael Kaine.
Qantas claims that half of the almost A$2 billion from the government was for important passenger and freight flights to connect exporters to global markets.
Vanessa Hudson, Qantas Group CFO, had stated that half of the A$850 million JobKeeper subsidy went to personnel.
Qantas’ Tuesday trading statement showed increased demand, better cost management, and lower debt.
Qantas said jet fuel prices remained high, although a recent decline may lower second-half costs.
This trade update is good. “Strong trading conditions in 1H23 have continued throughout 2H23, driving an earnings and cash flow beat versus expectations,” UBS analysts noted.
Qantas fell 2.1% to A$6.365, while the benchmark stock index (.AXJO) rose 0.1%.
Qantas’ net debt is forecast to be between A$2.70 billion and A$2.90 billion by June-end, well below the revised target range of A$3.70 billion to A$4.60 million.
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