Qantas First-Half Net Profit Falls 25 Pct

Australia's Qantas Airways posted its first half results on Friday, showing a net profit fall of 25 percent to AUD$515 million (USD$396.7 million).

The group’s preferred measure, underlying profit before tax, was AUD$852 million, down 7.5 percent from the previous year’s AUD$921 million.

Total revenue for the six months to end December was AUD$8.18 billion, a 3.3 percent drop. Total expenditure was down slightly at AUD$7.24 billion.

Qantas said profitability at its international division was impacted by “the high levels of capacity growth affecting all major airlines, but it achieved significantly higher margins than the industry average.”

Qantas group carried 2 percent more passengers during the period at 26.76 million, with Jetstar a standout with a 15 percent increase in pax numbers carried.

Group revenue in revenue passenger km terms (RPK) was up 1.1 percent on a capacity increase of 1.4 percent. The revenue seat factor edged 0.2 of a percentage point down at 81.0 percent.

Jetstar provided strong growth with an 8.3 percent increase in RPKs on a 4.5 percent ASK capacity increase. Seat factor was up 1.7 points at 81.9 percent.

“Qantas and Jetstar’s domestic operations produced an outstanding result… The international market is tough because of capacity growth and lower fares, and Qantas International is not immune from those pressures,” Qantas chief executive Alan Joyce said.

Qantas will receive its first two Boeing 787-9 Dreamliners in late 2017. The aircraft, part of an order of eight, will be used to establish a non-stop Perth to London service from March 2018, a first for the ‘kangaroo route’ between the UK and Australia.

Overall group capacity is expected to rise by between 1 and 2 percent in the second half, Qantas said in a statement.