Qantas soars back to billion-dollar profit

STORY: Australia’s biggest airline saw record profit for the first half of the financial year while its fares remain sky-high.

Qantas Airways raked in nearly a billion U.S. dollars as it rides a boom after years of losses during the global health crisis.

The company said Thursday that ticket prices will fall in the months ahead as the company and its competitors add more flights.

But while it and airlines around the world have enjoyed raging demand from people ready to travel again, jacking up fares and profits, cost of living is steadily creeping up with wallets squeezed by groceries, fuel, and mortgages.

Still, Qantas CEO Alan Joyce told reporters he expects hunger for travel into 2024.

"While interest rates and inflation are expected to hit discretionary spending at some point, we have yet to see any signs of that in our bookings, in our forward bookings. In fact, the research shows that travel is one area that people want to prioritize over the next 12 months."

The threat of a cost-of-living crunch is a taste of what U.S. private equity firm Bain Capital will face if it proceeds with an IPO for domestic rival Virgin Australia this year.

For now, Qantas feels comfortable enough for a stock buyback it announced Thursday to the tune of some $340 million U.S. dollars.

But investors were startled enough by estimates fare prices will subside that share values tumbled down by 7% after Joyce spoke.