Qantas releases the loyalty parachute as profits fall

Qantas' profit has taken a hit, falling 28.3 per cent to $1.25 billion as airfares moderated amid increased competition and efforts to woo back customer trust that had eroded in the aftermath of the pandemic.

The airline deliberately reduced its margins on international travel as it worked to strike a balance in delivering for shareholders, employees and customers, Qantas chief executive Vanessa Hudson said Thursday.

"That was a very deliberate investment in the customer, to get that balance right," Ms Hudson said.

The reduction in profit was also due to a fall in freight revenue and a $230 million investment to upgrade customer experiences, she said.

Of that, $100 million was spent renovating Qantas' airport lounges, with the airline also spending to upgrade its food and beverage offerings, its digital systems, its call centres and its loyalty programs.

"Both Qantas and Jetstar saw significant uplift in satisfaction," Ms Hudson said.

"I speak a lot to customers on planes and in airports, and what I hear and what they say to me is that things feel different, and that is actually a reflection of the incredible work of our people."

But she acknowledged there was more work to be done. Qantas' customer satisfaction score under a widely used survey rose 16 points in the past 13 months, standing at a 67 out of 100, she said.

"To give you a reference point, when Qantas had the highest reputation in the country, that score was 80," Ms Hudson.

"Our ambition is to get back to being the the best and that pride in the national carrier, and so we feel really confident in the momentum that we've got behind that, but there is still lot more to do, and that is what we're going to focus on this year."

With aircraft manufacturers still experiencing supply chain issues, Qantas now expects the first of 28 Airbus A321XLRs it ordered to arrive in April.

The 197-seat, single-aisle aircraft are more spacious and have a longer range than the Boeing 737s they are replacing, enabling more direct flights to Southeast Asia.

Qantas also announced it had reached an agreement with the Flight Attendants Association Australia to increase the pay of 800 short-haul cabin crew, after the Albanese government in December passed "same job, same pay" legislation that made it illegal for labour hire workers to be paid less than regular employees.

The short haul cabin crew had been employees of a wholly owned Qantas subsidiary, QF Cabin Crew Australia.

The airline also announced on Thursday a further share buy-back of up to $400 million and said it was looking to resume paying dividends in the second half.

Qantas does not currently have franking credits, so paying a dividend now would not be tax efficent, chief financial officer Rob Marcolina indicated.