(Reuters) – Qantas Airways on Tuesday forecast a record annual profit and hiked its share buyback programme by up to A$100 million ($67.83 million), courting demands from a workers’ union to return billions received as pandemic aid from the government.<\/p>\n\n\n\n
Australia’s flagship carrier expects an underlying profit before tax of A$2.43 billion to A$2.48 billion for fiscal 2023, slightly higher than a Refinitiv estimate of A$2.40 billion, underpinned by travel demand and a moderation in fuel prices.<\/p>\n\n\n\n
The forecast profit is nearly A$850 million higher than the carrier’s 2018 record of A$1.60 billion.<\/p>\n\n\n\n
The better-than-expected forecast irked the Transport Workers Union (TWU), which is currently involved in a court battle with Qantas regarding the sacking of nearly 1,700 ground staff at the peak of the pandemic.<\/p>\n\n\n\n
The union was also critical of the revised buyback programme, calling for the carrier to pack welfare received during the pandemic.<\/p>\n\n\n\n
“The $100 million increase to the share buyback scheme is a kick in the guts to illegally sacked workers who were told their jobs were sacrificed to save this amount of money,” said TWU National Secretary Michael Kaine.<\/p>\n\n\n\n
Qantas has maintained that of the nearly A$2 billion it received from the government, about half of it was to maintain critical passenger and freight flights to keep exporters connected to overseas markets.<\/p>\n\n\n\n
Qantas Group Chief Financial Officer Vanessa Hudson (NYSE:HUD) has said previously that half of the A$850 million, received as JobKeeper subsidy, went directly to the staff.<\/p>\n\n\n\n
STRONG TRADING UPDATE FAILS TO IMPRESS INVESTORS<\/p>\n\n\n\n
There were multiple positive cues for investors in Tuesday’s trading update by Qantas, which pointed towards higher demand, better cost management and lower debt.<\/p>\n\n\n\n
Jet fuel prices remained elevated, Qantas said, but added that a recent drop may deliver cost improvements in the second half.<\/p>\n\n\n\n
“Overall, this is a positive trading update. The strong trading conditions seen in 1H23 have continued throughout 2H23, driving an earnings and cash flow beat versus expectations,” UBS analysts wrote in a note.<\/p>\n\n\n\n
Still, shares of Qantas were down 2.1% at A$6.365, versus a 0.1% gain in the benchmark stock index.<\/p>\n\n\n\n
Qantas’ net debt is expected to be between A$2.70 billion and A$2.90 billion by June-end, significantly below a revised target range of A$3.70 billion to A$4.60 million.<\/p>\n\n\n\n
($1 = 1.4743 Australian dollars)<\/p>\n