Qantas Forecasting Second-Best Annual Profit

May 4, 2017

Qantas is forecasting its second highest result ever for its full year to end June, as domestic operations show improved performance and international conditions ease.

The Australian flag carrier said it expects a full year, pre-tax profit of between AUD$1.35 billion and AUD$1.40 billion (USD$1 billion - USD$1.03 billion). That would be a drop from the previous financial year’s AUD$1.53 billion, but still the airline’s second biggest pre-tax profit.

In an update for the third quarter to end March 2017, Qantas said the tough conditions in the international market had eased slightly, with unit revenue down 5.6 percent over the previous year’s quarter. The airline increased international capacity by 2.2 percent in Q3.

Group revenue for the quarter fell 1.4 percent to AUD$3.96 billion, from AUD$4.01 billion.

Qantas International increased capacity by 4.8 percent in the third quarter, but its low cost unit Jetstar saw a 1.8 percent decline as a Japanese route was transferred to Qantas.

Unit revenue in the domestic segment rose 4.6 percent on a capacity drop of 3.7 percent as it reacted to the downturn in Australia’s mining sector.

“Last year we posted the highest earnings in Qantas’ history and our guidance today would make this year’s underlying profit the second best in almost 100 years, Qantas chief executive Alan Joyce said.

“Internationally it’s still tough, with high levels of capacity growth pushing fares down, but we’ve seen those conditions ease slightly. Because of the work we’ve done to transform Qantas… our international businesses are navigating the headwinds better than our key competitors,” Joyce added.

(Airwise)