Profit after tax fell to $869 million in the six months to December 31,down from $1 billion in the prior-year period as margins tightened and airfares fell. Qantas’ share price sunk 6.8 per cent following the results to $5.21,as investors took in the lower-than-expected returns.
Hudson,presenting her first results as chief executive,said she stood by the controversial $1 billion restructure the airline committed to in the depths of the COVID-19 pandemic,even though the business is now pumping money into restoring customer service.
“At the time we made very deliberate decisions to not impact the customer product throughout that process.... But I think if I look at where we are now with where we’re obviously in an environment where we know a competitive market is changing around us,that’s why we need to invest more[in customer],” Hudson said.
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She argued that the restructure was not intended to diminish customer service but lower costs in other ways,including by reducing head office headcount and by outsourcing ground handling – which was recently found by the High Court to have been illegal. It also modernised the IT systems,retired its fleet of Boeing 747s and offered a voluntary redundancy programme to cabin crew.
Qantas announced international earnings margins of more than 8 per cent for this financial year,underpinned by its plan to roll out direct flights between Europe and Australia’s east coast by 2025. The airline business flagged that this rollout has been pushed back by six months on Wednesday to accommodate for a delivery delay of the first A350.
Hudson told investors the group expected to spend $230 million on improving its customer and frequent flyer divisions annually. The airline business has been slammed by customers,staff and investors over the past two years for prioritising its bottom line over its product in recent years.