Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Qantas (ASX:QAN) share price loses altitude on HY22 report

The Qantas Airways Limited (ASX: QAN) share price has fallen today after announcing its first-half results. 

The Qantas Airways Limited (ASX: QAN) share price has fallen today after announcing its first-half results.

Reopening delay weighed on earnings

Currently, the Qantas share price is down 4.02% to $5.14.

Key financial results for the half ending 31 December include:

  • Revenue of $3.1 billion, up 32% year-on-year (YoY)
  • Underlying EBITDA loss of $245 million, down from a positive $86 million result in the prior half
  • Underlying loss before tax of $1.28 billion, down from a $1.01 billion loss in the prior half

Like Flight Centre Travel Group Ltd (ASX: FLT) who also reported today, the pandemic has significantly hit Qantas’ operations.

Domestic travel reached 42% of pre-pandemic capacity, impacted by the various strains of COVID-19 at the start and end of the half.

International travel was significantly subdued as Fortress Australia borders remained closed.

The uplift in revenue was largely a result of increased demand for Qantas freight and its Loyalty division.

Freight has been a natural hedge against traditional flying activities and is expected to remain elevated when travel resumes.

As a result, Qantas has allocated three new aircraft to the division to support its growth.

Overall, total flying was just 18% of pre-pandemic levels during the half.

Subsequently, earnings dipped back to negative territory.

Qantas had previously anticipated that travel would return more meaningfully during this half, and hence ramped out its capacity.

“The slow recovery in travel demand exacerbated stranded labour costs associated with the decision to stand up all Australian-based employees in December. This resulted in a temporary surplus of around 17 per cent of the Group’s workforce in quarter three”

When reopening was pushed further out due to Omicron, the business was left with extra restart costs, which weighed on earnings.

Leaner and meaner

Qantas has delivered $840 million in annual cost savings. It remains on track to reach its target of $900 million by the end of FY22.

Given the low-margin nature of the airlines, a $900 million cost-saving would have resulted in a 62% uplift in Qantas earnings before tax and interest in FY19.

The business has also added 15 new domestic routes as it capitalises on the restructure of major competitor Virgin.

To fortify its balance sheet, the business sold a parcel of land located near Sydney Airport for $802 million.

What next for the Qantas share price?

The Qantas share price will be buoyed by a return local and international travel.

From October to December, the airline reported three months of positive cash flow as forward bookings recover.

As a result, Qantas believes domestic travel will reach close to 100% of pre-pandemic capacity over the next six months.

International capacity is expected to reach 44% over the same period.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.
Skip to content