Australian flag carrier Qantas Airways has raised its revenue expectations for its domestic operations in the first half of the financial year. The airline is now anticipating a 3% to 5% increase in revenue per available seat kilometre for its local business, up from the previously forecasted 2% to 4%. Additionally, Qantas expects domestic capacity to rise by 1% for the full financial year, compared to the earlier projection of a 2% increase.
Qantas CEO Vanessa Hudson stated that the airline continues to meet expectations, with both Qantas and Jetstar experiencing stable demand. Jetstar saw stronger demand than expected, while Qantas Domestic witnessed improvements in load factors and corporate travel demand year on year.
The company’s shares reached a record high for the second time in the week, gaining as much as 1.6% to A$8.04. Qantas is working under Hudson’s leadership to rebuild its reputation following challenges over the past 18 months.
Qantas’ new chairman, John Mullen, mentioned that the airline is on track to reinstate fully franked dividends in the second half of the current financial year. Mullen expressed optimism about the positive outlook for Qantas and Jetstar, supported by progress in reputation restoration and a strong balance sheet.
The airline expects first-half jet fuel costs to be around A$2.55 billion, lower than the previous estimate of A$2.7 billion, due to a decrease in global fuel prices. Qantas based its current fuel cost estimate on a jet fuel price of A$140 a barrel, down from A$150 when the estimate was initially made.
Qantas disclosed that its A$400 million share buyback is 45% complete at an average price of A$7.23, with the finalization expected by the end of the year. The company reported that trading at Qantas’ loyalty program was as expected, following the introduction of a new flight rewards scheme. The loyalty division anticipates at least 10% growth in underlying earnings before interest and taxes in the current financial year.
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By Rishav Chatterjee
(Reuters) – Australian flag carrier Qantas Airways on Friday lifted revenue expectations from its domestic operations for the first half of the financial year, while forecasting lower fuel costs after a drop in global prices.
The airline is now expecting revenue per available seat kilometre for its local business to increase by 3% to 5% for the first half ended Dec. 31 compared to a year ago, up from the 2% to 4% range it provided in August.
Domestic capacity is expected to rise by 1% for the full financial year, it said, down from its August forecast of a 2% rise.
“The Group continues to perform in line with expectations, with both Qantas and Jetstar seeing stable demand,” Qantas CEO Vanessa Hudson (NYSE:) said in a speech at the airline’s annual meeting.
“Jetstar saw stronger than anticipated demand, while Qantas Domestic load factors and demand for corporate travel continues to improve year on year,” she said.
The firm’s shares gained as much as 1.6% to A$8.04 to hit a record high for the second time in the week.
Under Hudson the flag carrier is working to rebuild a reputation that was battered over the last 18 months amid legal, regulatory and customer issues.
The airline’s new chairman, John Mullen (NASDAQ:), said Qantas also remained on track to reinstate fully franked dividends from the second half of the current financial year.
“With the progress we have already made on restoring our reputation, supported by a strong balance sheet, the outlook for Qantas and Jetstar is really positive,” Mullen said in his address to shareholders.
The airline is now expecting first-half jet fuel costs of about A$2.55 billion ($1.69 billion), lower than the A$2.7 billion it had estimated earlier.
Qantas’ current fuel cost estimate is on the basis of current jet fuel price of A$140 a barrel, lower than A$150 when it was previously estimated.
The firm said its A$400 million share buyback was currently 45% complete at an average price of A$7.23. The airline anticipates its finalization by the end of the year.
Trading at Qantas’ loyalty programme was in line with expectations, the company said, following the launch of a new flight rewards scheme.
The loyalty division continues to expect at least 10% growth in underlying earnings before interest and taxes in the current financial year, Qantas said.
($1 = 1.5060 Australian dollars)
(This story has been corrected to fix the time period for domestic capacity outlook from first half to full year, in bullet 3 and paragraph 3)
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