Qantas profit drops 20% as fuel costs surge 14%

Australian airline Qantas reported a 20% drop in annual net profits to Aus$1.29 billion ($930 million) in the year ending June 30, 2023, as soaring fuel costs weighed heavily on the company's bottom line. The hike in jet fuel prices by 14.4% was largely attributed to geopolitical tensions in the Middle East, which sent prices surging.

Despite the financial setback, Qantas remains optimistic about future revenue growth, citing resilient travel demand as the airline navigates the challenging environment. Group CEO Vanessa Hudson noted that the conflict and economic headwinds created uncertainty, leading to reduced travel demand among large corporations and the government.

In response, Qantas swiftly adjusted fares and capacity to offer customers more options to fly to Europe. To counter the impact of rising fuel costs, the airline has introduced strategic measures such as hedging for crude oil price fluctuations and redeploying aircraft. Qantas Group has also made significant fleet investments, adding 17 new aircraft during the past financial year and expecting up to 31 more in the coming year.

This investment will enable Qantas to commence retiring its double-decker A380 fleet from 2028, as the company adapts to the evolving aviation landscape.