After the lifting of COVID limitations sparked a robust comeback in travel demand, shocking the market and pushing its shares up 6%, Qantas Airways Ltd said on Thursday that it will buy back up to A$400 million ($276 million) of shares.
Although the rush to travel once borders opened increased its second-half profitability and assisted in reducing debt levels, it also produced a number of operational issues that forced the airline to scale back planned expansions in domestic capacity.
In the fiscal year that ended on June 30, the airline reported an annual underlying loss before tax of A$1.86 billion, which was higher than the restated result from the prior year of A$1.77 billion and somewhat higher than expert expectations.
Despite reporting annual losses for the third consecutive year, the national carriers of Australia and New Zealand claim that the worst of the coronavirus problem is now behind them. When local and international borders were blocked as part of tight measures to contain the COVID-19 pandemic, the majority of the losses were reported in the first half.
When combined with the Group’s recovery plan, the reopening of borders witnessed a sharp surge in forward travel demand, which significantly improved the balance sheet. At the conclusion of FY22, net debt has decreased from a peak of more than $6.4 billion to $3.9 billion, which is below the ideal target range of $4.2 billion to $5.2 billion.
“We always knew travel demand would recover strongly but the speed and scale of that recovery has been exceptional,” Qantas Chief Executive Alan Joyce said. “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.”
