Qantas Expecting H1 Profit Drop

October 31, 2016

Qantas has given a preliminary trading report indicating a three percent revenue dip in the first quarter, and expectations of a first-half profit drop.

Revenue for the three months to end September was AUD$3.98 billion, down from USD$4.11 billion in the first quarter last year. The drop is due to increased competition on international routes and subdued domestic demand, Qantas said.

Qantas expects to report a first-half underlying profit before tax of between AUD$800 million and AUD$850 million (USD$608 million - USD$646.8 million), down from the AUD$921 million reported in the same period last year.

The Australian flag carrier expects H1 capacity to increase by between 1.5 and 2 percent, down from previous guidance of between 2 and 3 percent.

“Like most carriers globally, we are seeing international air fares below where they were 12 months ago,” Qantas group chief executive Alan Joyce said. “We remain disciplined on cost, continue to manage capacity carefully to match demand, and have secured the benefit of lower fuel prices through our hedging.”

Qantas expects to pay AUD$1.5 billion in first half fuel costs, down from USD$1.7 billion in the first half last year.

(Airwise)