Qantas flying high after record year

  • 23/02/2016
(Reuters)
(Reuters)

By Fiona Rotherham

Australia's biggest airline Qantas' underlying performance in the 2015 calendar year was the best in its 95-year history through revenue growth, cost cutting and lower fuel prices, along with benefits from ending its damaging domestic war with Virgin Australia two years ago.

Underlying profit before tax rose 151 percent to AU$921 million (NZ$992.72m) in the six months ended Dec. 31, while net profit after tax jumped to AU$688m (NZ$741.58m) from AU$203m (NZ$218.81m), the Sydney-based company said in a statement.

The airline announced an on-market share buy-back of up to AU$500m (NZ$538.94m) kicking off early next month.

Qantas said it was a record first-half performance with every part of the group contributing to the result.

Revenue increased by 5 percent to AU$8.5 billion (NZ$9.16b) while total unit costs were down by 7 per cent compared with the prior first half. It continues the turnaround the airline has been on since racking up big losses as recently as two years ago.

The airline also announced today it would expand its Christchurch to Brisbane service year-round, following a record-breaking summer at Christchurch Airport and its seasonal service achieving flights averaging more than 90 percent full.

From June the service will operate three times a week, rising to four times in summer.

Chief executive Alan Joyce said the record half-year result reflects a stronger, more agile Qantas.

"Both globally and domestically the aviation industry is intensely competitive," he said.

"That's why it's so important that we maintain our cost discipline, invest to grow revenue, and continue innovating with new ventures and technology.".

Effective fuel hedging saw the group gain a AU$448m (NZ$482.89m) first-half benefit from fuel hedging which allowed it to take advantage of lower global fuel prices.

Its shares fell 4.8 percent to A$3.80.

Budget offshoot Jetstar, which has expanded its competition with Air New Zealand to regional air routes, reported record underlying earnings of AU$262m (NZ$282.40m), compared with AU$81m (NZ$87.31m) in the prior half.

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