Qantas Hands Back Yet More Cash to Shareholders

  • Airline plans A$378 million stock buyback after record profit
  • Qantas has handed A$2.1 billion to investors since late 2015
Alan Joyce, Qantas Airways CEO, discusses Qantas’ earnings and performance.

Qantas Airways Ltd. handed back more money to shareholders after reporting record first-half profit, defying a warning by S&P Global Ratings that the airline needs to divert cash to upgrade its ageing fleet.

Australia’s national carrier said Thursday it will buy back as much as A$378 million ($295 million) of shares and announced a 7 cents-a-share dividend. That’s on top of A$2.1 billion already returned to investors since late 2015 as Chief Executive Officer Alan Joyce’s three-year turnaround program generated record profits.

“We now have a lot of momentum behind us,” Joyce said in a statement. “We’re confident about the future it allows us to build.”

For a detailed breakdown of Qantas earnings, click here

After reviving the carrier, Joyce has showered shareholders with capital returns, stock buybacks and reinstated dividends. He is now plowing capacity into Asia, the fastest-growing travel market in the world, to tap Chinese tourists flocking to Australia. 

Payback Time

Qantas has given back more than A$2 billion to investors in the past three years

Source: Qantas annual report 2017

Note: Fiscal years end in June

Underlying profit before tax in the six months ended Dec. 31 rose 15 percent to A$976 million. Qantas previously flagged earnings for the period of A$900 million to A$950 million.

While Qantas is buying eight Boeing 787-9 Dreamliners, partly to fly direct to Europe, S&P said last week that Qantas was running out of time to upgrade its fleet before the investment required becomes unmanageable. 

Rejecting S&P’s views, Qantas said the rating agency has ignored the fundamentals of its business and fleet strategy.

Qantas said Thursday its low-cost carrier Jetstar will start taking delivery of aircraft from its existing order of 99 A320 aircraft, beginning with 18 A321LR NEOs from mid-2020.

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