Qantas flags bonus and shareholder bonanza after record $1.6b profit
Qantas said it will pay its workers $67 million in bonuses and announced $500 million in shareholder returns after its underlying profits jumped to a record high, thanks to higher earnings in its domestic operations.
Underlying earnings before tax climbed 14 per cent in the year to June to $1.6 billion, the highest ever, the airline said in a statement to the ASX on Thursday morning. The group's after-tax profit for financial year 2017/18 was up 14.9 per cent at $980 million.
Qantas plans to pay out bonuses of $2500 to 27,000 non-executive employees, and return $500 million to shareholders via a $332 million share buyback and a 10 cents per share dividend.
Qantas chief executive Alan Joyce said the company was able to achieve its result despite fuel costs rising by $193 million, or 6 per cent.
“We’re facing another increase to our fuel bill for FY19 and we’re confident that we will substantially recover this through a range of capacity, revenue and cost efficiency measures, in addition to our hedging program,” Mr Joyce said.
“Our investment in free Wi-Fi and cabin improvements are delivering a better experience for customers as well as higher earnings for Qantas and Jetstar.”
Qantas said it paid $4 million in company tax - the first time it has paid corporate tax since 2009.
Earnings from the group’s domestic Qantas and Jetstar networks grew 25 per cent to $1.1 billion as it filled more seats on each flight and increased ticket prices.
Qantas domestic maintained its market share of the lucrative corporate market, and grew its share of the small to medium business market, the airline said.
Qantas International's earnings rose by 7 per cent to $399 million, with its profit margin steady despite fierce competition from other carriers flooding into Australia.
The group's once-booming loyalty and frequent flyer business slowed to 1 per cent earnings growth for the year, compared to 6.6 per cent last year, which Qantas said was due to "market conditions" and the continued impact of changes to credit card fees.
Mr Joyce said he was confident of returning the loyalty division to more rapid growth through its expansion into health insurance and its own line of credit cards.
Qantas also announced it would create a second pilot academy somewhere in regional Australia to help met the growing global demand for airline pilots.
The location of its first academy, announced in February this year, has not yet been decided.
More to come