Qantas record profit forecast, revised buyback irk workers' union
By Harish Sridharan
(Reuters) - Qantas Airways on Tuesday forecast a record annual profit and hiked its share buyback programme by up to A$100 million ($67.83 million), courting demands from a workers' union to return billions received as pandemic aid from the government.
Australia's flagship carrier expects an underlying profit before tax of A$2.43 billion to A$2.48 billion for fiscal 2023, slightly higher than a Refinitiv estimate of A$2.40 billion, underpinned by travel demand and a moderation in fuel prices.
The forecast profit is nearly A$850 million higher than the carrier's 2018 record of A$1.60 billion.
The better-than-expected forecast irked the Transport Workers Union (TWU), which is currently involved in a court battle with Qantas regarding the sacking of nearly 1,700 ground staff at the peak of the pandemic.
The union was also critical of the revised buyback programme, calling for the carrier to pay back welfare received during the pandemic.
"The $100 million increase to the share buyback scheme is a kick in the guts to illegally sacked workers who were told their jobs were sacrificed to save this amount of money," said TWU National Secretary Michael Kaine.
Qantas has maintained that of the nearly A$2 billion it received from the government, about half of it was to maintain critical passenger and freight flights to keep exporters connected to overseas markets.
Qantas Group Chief Financial Officer Vanessa Hudson has said previously that half of the A$850 million, received as JobKeeper subsidy, went directly to the staff.
STRONG TRADING UPDATE FAILS TO IMPRESS INVESTORS
There were multiple positive cues for investors in Tuesday's trading update by Qantas, which pointed towards higher demand, better cost management and lower debt.
Jet fuel prices remained elevated, Qantas said, but added that a recent drop may deliver cost improvements in the second half.
"Overall, this is a positive trading update. The strong trading conditions seen in 1H23 have continued throughout 2H23, driving an earnings and cash flow beat versus expectations," UBS analysts wrote in a note.
Still, shares of Qantas were down 2.1% at A$6.365, versus a 0.1% gain in the benchmark stock index.
Qantas' net debt is expected to be between A$2.70 billion and A$2.90 billion by June-end, significantly below a revised target range of A$3.70 billion to A$4.60 million.
(This story has been refiled to fix a typographical error in paragraph 5)
($1 = 1.4743 Australian dollars)
(Reporting by Harish Sridharan and Himanshi Akhand in Bengaluru; Additional reporting by Archishma Iyer; Editing by Anil D'Silva, Subhranshu Sahu and Sherry Jacob-Phillips)