Qantas Group has posted its first full-year surplus since before the pandemic, reporting an underlying profit before tax of A$2.47 billion ($2.7b) and a statutory after-tax profit of A$1.74b ($1.887b). 

The announcement comes as Air New Zealand also reports a dramatic turnaround in its results, a $585m underlying profit compared to a loss of $725m last year as travel booms. 

Qantas says its profit compares with A$7b ($7.59b) in accumulated losses over the three prior years. 

The company said that underpinning the profit was the completion of the group’s A$1b ($1.084b) recovery programme (launched in the first year of those losses), a 132 per cent increase in flying compared with the 2022 financial year, and strong travel demand driving significantly higher revenue. 

Around A$340m ($368.8m) has been set aside in bonuses for more than 21,000 Qantas employees, including pilots, cabin crew, engineers and head office staff. This was originally flagged in September 2021 in response to the challenges and hardships employees faced in dealing with the Covid crisis and to incentivise the turnaround. 

These bonuses include up to 1,000 Qantas shares (valued at around A$6000 or $6510) that will now vest, and an A$5000 ($5424) “recovery boost” that eligible employees are receiving as enterprise agreements are finalised - a total of around A$11,000 ($11,934) each. 

Qantas Group chief executive Alan Joyce said the results show a substantial turnaround in both our finances and service over the past year. 

“Flight delays and cancellations have largely returned to pre-Covid levels and we’ve shifted from heavy losses to a strong profit and pipeline of investment worth billions of dollars,” Joyce said. 

It doubled the number of people carried to 46 million compared to the year before. 

“Travel demand is incredibly robust and we’ve taken delivery of more aircraft and opened up new routes to help meet it,” Joyce said. 

Operational performance improved considerably during the year after a challenging ramp-up, with Qantas achieving the best on-time performance of the major domestic airlines for 11 months out of 12 and Jetstar returning to pre-Covid levels. 

Normalising of international capacity and the unwinding of inefficiencies from the return to flying will help put downward pressure on fares and strengthen financial performance. 

Fares peaked in the second quarter of the 2023 financial year after increasing due to strong demand and industry-wide supply chain constraints. 

Additional capacity, moderating fuel costs and a stronger Australian dollar applied downward pressure in the second half, with fares falling by around 12 per cent. 

In inflation-adjusted terms, domestic fares are now 4 per cent higher than pre-Covid levels and international fares are 10 per cent higher. 

The airline has launched a major fare sale, with one million fares on sale and over one billion in loyalty bonus points to say thank you to customers also announced. 

Qantas today announced a firm order for 24 widebody aircraft, consisting of 12 Boeing 787s and 12 Airbus A350s. With deliveries starting in 2027 and continuing into the next decade, these aircraft will replace the bulk of the current A330 fleet, with purchase right options stretching out until at least 2037 to provide flexibility for future growth and, ultimately, replacement of the A380 fleet. 

It is in addition to the order for 12 specially-modified A350s to operate Project Sunrise flights, linking Australia directly to New York and London, arriving in 2026. 

In its outlook, Qantas said it had entered FY24 with a very strong balance sheet, A$1b ($1.084b) in reoccurring cost benefits from its recovery programme, and strong trading conditions as consumers continue to prioritise travel.