Qantas Forecast For Seat Shortage Suggests No End To High Fares
Qantas Airways Ltd. said strong travel demand and the completion of its cost-cutting program will drive profit growth this year.
(Bloomberg) -- Qantas Airways Ltd. said air-travel demand will outstrip available seats for the foreseeable future, a forecast that suggests passengers will have little respite from soaring fares any time soon.
“There’s still a mismatch between supply and demand that’s likely to persist for some time, especially for international flying,” Qantas Chief Executive Officer Alan Joyce said Tuesday.
Bookings point to “strong travel demand” beyond June into the next financial year. Domestic revenues are running at 118% of pre-Covid levels and 123% for international travel, Qantas said.
Read more: Airfares Set for Big Jump Again in Business and Economy
The soaring appetite for flights, combined with Qantas’ cost-cutting program, is allowing Joyce to drive up fares and super-charge profits in his final year as CEO. It could be almost another year — March 2024 — before international capacity reaches pre-pandemic levels, according to the Sydney-based carrier.
Read more: Qantas Names First Female CEO in Start of Reputational Rebuild
The airline on Tuesday forecast record pre-tax income of between A$2.43 billion and A$2.48 billion ($1.65 billion) for the year ending June 30. An existing A$500 million share buyback was increased by as much as A$100 million.
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Qantas shares fell 1.5% to A$6.40 at 11:01 a.m. as the profit forecast for this financial year was broadly in line with analysts’ estimates.
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