Qantas Earnings: As Good as It Gets but Earnings Not Expected To Fall Precipitously

We lift our Qantas fair value estimate by 3% to AUD 6.10 per share on the time value of money. Fiscal 2023 was a record year for Qantas, with an underlying pretax profit of AUD 2.5 billion in line with our forecast and guidance. This is a dramatic turnaround from underlying losses of AUD 3.6 billion in the prior two years which were ravaged by COVID-19 restrictions on flying. Air travel demand has returned strongly, while capacity is still constrained by the availability of aircraft, labour, and parts. With full planes and expensive tickets, Qantas is enjoying tremendous profitability.