QANTAS PROFIT SLIDES ON COSTLIER FUEL
Airline, however, announces A$400m share buyback plan and higher dividend
QANTAS Airways posted a 6.5 per cent fall in annual net profit yesterday, driven by fuel costs and a weaker Australian dollar, but cheered investors with a A$400 million (RM1.13 billion) share buyback plan and higher dividend.
The Australian flag carrier said its after-tax profit fell to A$891 million, down from A$953 million in the previous year.
Underlying pre-tax profit — the airline’s most closely watched measure — was 17 per cent lower at A$1.3 billion for the year ended June 30 than A$1.57 billion in the previous year.
That was below a consensus estimate of A$1.36 billion, Refinitiv data shows, but investors were forgiving of the shortfall that was largely due to a one-off non-cash provision for items including employee leave provisions.
Revenue, however, rose five per cent to A$17.97 billion.
Qantas said it would keep capacity flat in line with demand in a sluggish Australian economy.
“Looking ahead we are feeling very confident about this financial year,” said chief executive officer Alan Joyce.
The airline announced plans to buy back up 79.7 million shares in an off-market tender and declared a fully-franked final dividend of A$0.13 a share, up from A$0.10.
Qantas’ fuel costs rose 19 per cent and are forecast to rise by another A$100 million in the current financial year, for which it is already fully hedged.
Joyce said the airline was seeing weakness in the price-sensitive domestic leisure market served by budget carrier Jetstar, but premium leisure demand and corporate demand remained steady.
He declined to provide investors with guidance on forward bookings.
Qantas also said yesterday it would run marathon ghost flights from New York and London to Sydney carrying just a few staff to see how the human body holds up before commercial services start.
The airline will simulate the world’s longest direct flights with Boeing Co’s Dreamliners as soon as October.
The payload of 40 passengers and crew will undergo a host of medical checks and assessments.
The airline wants to start direct flights from here to New York and London as soon as 2022.
Joyce described the services as aviation’s final frontier.
The services, which take about 20 hours, aren’t a sure thing. Qantas still hasn’t decided on a Boeing or Airbus SE plane that can fly the route fully laden without a break.
And it is not clear how passengers will tolerate living in the cabin for the best part of a day and night.
Joyce had said he plans to choose either Boeing’s 777-8X or Airbus’ ultra-long-range A350900ULR and 1000ULR for the flights.