Qantas to recoup soaring fuel bill on strong travel demand
AUSTRALIA's Qantas Airways expects to completely recover higher fuel costs this fiscal year due to strong demand for air travel, even after rising oil prices dented first-half profit, reports Bloomberg
AUSTRALIA's Qantas Airways expects to completely recover higher fuel costs this fiscal year due to strong demand for air travel, even after rising oil prices dented first-half profit, reports Bloomberg.
'We're seeing strong forward bookings,' said CEO Alan Joyce. 'Competitor capacity growth has slowed internationally and is relatively flat domestically. And oil prices have declined from the peaks we saw late last year.'
The airline's first-half underlying profit before tax fell 19 per cent to A$780 million (US$559 million) from a year earlier but Qantas announced more returns to shareholders with a A$305 million stock buyback.
Said Mr Joyce: 'These factors point to a strong second half and we expect to completely recover our increased fuel costs by the end of this financial year.'
Qantas's expectation that it will recover higher fuel costs for the full year reflects the airline's dominance in its home market, as well as a moderation in the oil price toward the end of 2018.
That moderation is reflected in the airline's forecast for its fuel bill this year to be A$3.90 billion - less than the A$4.09 billion it previously anticipated.
Qantas is keeping capacity growth flat across its domestic and international routes in the second half. That helps it manage the fuel bill by minimising empty seats.