Qantas forecasts improved 1st half profit on slower revenue growth
SYDNEY — Australia’s Qantas Airways Ltd had forecast higher underlying first-half profit on Thursday as it cut capacity and raised fares, although expectations of slower revenue growth pushed its shares down as much as 7%.
Qantas said it expects to report underlying profit before tax in the range of A$ 900 million ($693 million) to A$950 million for the six months to Dec. 31, compared with A$ 852 million recorded a year earlier.
Revenue for the first quarter ended Sept. 30 rose 5.1% to A$4.19 billion.
“The domestic market is healthy but remains very competitive,” Chief Executive Alan Joyce said in a statement. “The high rate of revenue growth we’ve seen so far this year is likely to slow when compared with what was a strong second half last year.”
Qantas shares dropped at the open after the trading update before recovering some ground to be 4% lower at A$ 6.14. The carrier’s shares have surged more than 90% so far this year.
Domestic revenue per available seat kilometer ( RASK), a measure that combines ticket prices and seats filled, jumped 8% in the quarter. International revenue rose just 0.2% in the quarter ended Sept. 30, compared with a 6.9% decrease in the year-ago quarter.
The airline reported a nearrecord annual profit in August while also announcing a new cost- cutting target of A$ 400 million in savings each year. —