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 kilometer for its local business to increase by 3 percent to 5 percent for the first half ended December 31 compared to a year ago, up from the 2 percent to 4-percent range it provided in August.
Domestic capacity is expected to rise by 1 percent for the full financial year, it said, down from its August forecast of a 2-percent rise.
“The Group continues to perform in line with expectations, with both Qantas and Jetstar seeing stable demand,” Qantas Chief Executive Officer Vanessa Hudson 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 percent to AU$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, 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 AU$2.55 billion ($1.69 billion), lower than the AU$2.7 billion it had estimated earlier.
Qantas’ current fuel cost estimate is on the basis of current jet fuel price of AU$140 a barrel, lower than AU$150 when it was previously estimated.
The firm said its AU$400-million share buyback was currently 45 percent complete at an average price of AU$7.23. The airline anticipates its finalization by the end of the year.
Trading at Qantas’ loyalty program 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-percent growth in underlying earnings before interest and taxes in the current financial year, Qantas said.
Be the first to comment