Qantas profits soar past $2 billion despite multimillion-dollar fuel bill surge

Despite its best on-time performance in years, Qantas has copped a 13 per cent hit to its full-year profits, due to skyrocketing fuel costs driven by the war in the Middle East.

The airline’s full-year profit, released on Thursday, came in at $2.06 billion, a $330 million dip from last year.

The primary driver of the drop was the war in the Middle East, which added $610 million to the airline’s total fuel bill as the conflict brought soaring costs.

While Qantas managed to absorb some of those costs, it still suffered a direct $420 million hit to overall earnings.

At the same time, both private travellers and corporate clients began cutting back on domestic and international flights as consumer confidence slumped.

Qantas chief executive Vanessa Hudson said both Qantas and Jetstar were performing strongly in the first half of the year before the conflict erupted.

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“In response to the surge in fuel prices, we quickly adjusted fares and capacity and redeployed aircraft to give customers more options to fly to Europe,” she said.

“These actions, along with other mitigations, limited the net impact on earnings to $420 million, despite a $610 million increase in our fuel bill.

The multibillion-dollar profit came as the airline announced it had its best on-time performance in seven years.

Workers poised to strike as Qantas record major profits

Following the announcement of the enormous profit, Qantas copped major criticism from unions, whose workers are poised to strike.

The Transport Workers Union (TWU) slammed the group for its “anti-worker” strategy as more than 600 Qantas Ground Service (QGS) workers voted on industrial action, with 100 more expected to also join.

The TWU accused the airline’s management of continuing the aggressive anti-worker tactics imposed by former chief executive Alan Joyce, which it claims prioritise short-term profits.

It also said ground workers are now split across 38 subsidiaries and labor hire agencies, leading to eroded pay and conditions, high turnover, and severe safety failings.

The union also noted the 14 improvement notices issued recently at Qantas Freight following a worker death last year.

TWU national secretary Michael Kaine took aim at recent management decisions, including reported plans to offshore 1000 jobs through an artificial intelligence agreement and the closure of key regional bases.

“Hundreds of Qantas workers are now voting on industrial action. They’ve had enough of this company doing everything possible to make their jobs less secure and less safe,” he said.

“We must ensure Qantas profits benefit the whole Australian public, not just Qantas executives.”

Meanwhile, Jetstar airport operations workers are set to vote early next week on potential protected industrial action after the Fair Work Commission approved an application by the Australian Services Union (ASU).

The union slammed the airline for tying wages to a three per cent group pay policy, leaving Jetstar staff as the lowest-paid across the Qantas Group, despite the group delivering major profits and returning $700 million to shareholders.

ASU assistant national secretary Scott Cowen questioned the company’s priorities following the announcement, stating that workers are being asked by Jetstar to “accept the bare minimum”.

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“Workers don’t want to have to take industrial action, but the company’s complete failure to deal with the cost-of-living and extreme heat means that we’re left with no other choice,” Cowen said.

“If there’s $700 million to return to shareholders, there’s money to pay Jetstar workers a fair wage.

“It says everything about Jetstar’s priorities that on the same day the Qantas Group announces a bumper profit, our members are having to prepare a ballot just to be heard.”