Qantas posts record underlying profit, but shares in doldrums

SYDNEY: Qantas shares fell to their lowest in more than a month yesterday, despite Australia’s major carrier posting a record underlying profit of $A1.6 billion ($NZ1.75 billion)

The airline reported fullyear net profit rose 15% to $980 million, helped by strong performances from the domestic flying business of Qantas and Jetstar.

Chief executive Alan Joyce said the record profit reflected a strong market but warned of challenges ahead.

‘‘We’re facing another increase to our fuel bill for 201819 and we’re confident that we will substantially recover this through a range of capacity, revenue and cost efficiency measures, in addition to our hedging programme,’’ he said in a statement. Qantas shares closed down 2.8% at $6.53, having fallen as low as $6.29 during the day.

The group’s domestic flying division delivered earnings of $1.1 billion, a 25% jump from the previous year, driven by efficiency gains and higher seat occupancy on its planes, as the airline boosted premium offerings such as new lounges and free WiFi for passengers.

Qantas international division increased its earnings by 7% to $399 million and held its earnings.

The company has set aside a further $67 million for up to 27,000 nonexecutive employees with a bonus of $2500 each, and said it would return $500 million to its shareholders.