By Derek Rose in Sydney

QANTAS expects there to be no let-up in travel demand as the company reports record profits on the back of high fares and a booming domestic market.

The Australian flag-carrier said on Tuesday that yields would remain materially above pre-covid levels through 2023/24, particularly for international flights, but fares were gradually dropping as the industry added capacity.

Bookings indicate strong travel demand continuing, with revenue currently at 118 per cent of Qantas’s pre-pandemic levels for domestic flights and 123 per cent for international journeys.

Qantas said by the end of the year it would be operating slightly more domestic flights than it did before the pandemic, led by a significant increase in its key routes between Melbourne, Sydney and Brisbane.

The airline’s international capacity is at 84 per cent of pre-covid levels and will reach 100 per cent by March.

Qantas said it expects to make a 2022/23 underlying profit before tax of between $2.425 billion and $2.475 billion, significantly outstripping previous records but broadly in line with guidance and consensus expectations.

Unions blasted the profit forecast announcement as well as $100 million share buyback program also announced on Tuesday and called on Qantas to return taxpayers’ money given to the company during COVID-19 lockdowns.

“This obscene profit forecast is the result of Qantas management bleeding dry workers, passengers and the taxpaying public,” TWU national secretary Michael Kaine said.

“The right thing to do would be to pay back every dollar of no-strings government handouts Qantas received from Scott Morrison before it trashed every essential section of the airline to prop up executives and shareholders.”

Mr Kaine said Qantas received $2.7b in “government handouts” during the pandemic.

But Qantas has said about half of what is classified as “government assistance” during the pandemic was a fee for service for operating important flights during the lockdowns, with the other half going directly to Qantas staff.

A Qantas spokesman rejected any claim it would repay the money.

ACTU president Michele O’Neil said the profit announcement showed “corporate greed has reached unacceptable levels” and Qantas’ standards had fallen dramatically with constant flight delays and lost luggage.

Chief executive Alan Joyce said more parts of the aviation supply were returning to normal, which meant Qantas was able to take some of the spare aircraft it kept in reserve back into schedule.

“That’s combining with lower fuel prices to help put downward pressure on fares, which is good news for customers,” he said.

An A380 Qantas mothballed at Victorville Airport in California’s Mojave desert will return to service by year-end after maintenance and cabin modifications, while two Airbus A330s will be leased from Finnair.

Finland’s flag carrier will operate the routes on Qantas’ behalf from October until late 2025 between Sydney and Singapore and, from late March, from Sydney and Bangkok.

“More parts of the aviation supply chain are returning to normal, which means we’re able to put some of the spare aircraft and crew we kept in reserve back in the schedule,” chief executive Alan Joyce said in a statement.

“That’s combining with lower fuel prices to help put downward pressure on fares, which is good news for customers.”

Qantas said its $500m share buy-back announced in February was three-quarters complete and it would spend another $100m on the program.

Including that additional buyback, Qantas expects to end the financial year on June 30 with a net debt of between $2.7b and $2.9b, down from a peak of $6.4b at the height of the pandemic.

RBC Capital Markets analyst Owen Birrell noted that the $100m “token lift” in the share buyback program paled in comparison with the $1.4b gap between Qantas’s expected year-end net debt and its target range of $3.7b to $4.6b.

He said it raised the question of whether there would be a major step-up in Qantas’s investment in its fleet.

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