Australia's Qantas Airways has upgraded its profit guidance for the six months to 31 December on firmer travel demand, particularly from domestic passengers that are prioritising spending on air travel.
The firm expects underlying profit before tax of A$1.35bn-1.45bn ($900mn-960mn), up from its previous guidance of A$1.2bn-1.3bn issued on 13 October for the first half of the 2022-23 fiscal year. The increased profitability is driven by firm travel demand, allowing Qantas to charge higher fares that offset higher fuel costs.
Fuel costs are expected to be A$5bn in 2022-23, which would be a record high for Qantas despite international capacity being around 30pc below pre-Covid-19 pandemic levels.
The airline's return to profitability follows five consecutive fiscal half-years with an accumulated A$7bn in financial losses because of the impact of the pandemic on global air travel. Qantas expects its net debt will fall to between A$2.3bn-2.5bn on 31 December, which is A$900mn less than it expected last month, as revenues accelerate because of customers booking flights for January-June and beyond.