Qantas expects record annual profit despite rising fuel bill

[BENGALURU] Australia's Qantas Airways Ltd said on Wednesday it expected a 10.7 per cent rise in full-year underlying pretax profit, despite an expected A$200 million (S$200 million) increase in fuel costs.

The country's largest airline forecast record underlying profit before tax in the range of A$1.55 billion to A$1.60 billion for the fiscal year ended June 30, compared with A$1.4 billion profit a year earlier.

The guidance was in line with the average estimate of A$1.55 billion of eight analysts polled by Thomson Reuters.

Group revenue for the third quarter ended March 31 rose 7.5 per cent to A$4.25 billion. Revenue per available seat kilometre, a measure that combines the fares paid and the percentage of seats filled, was 6 per cent higher.

"Qantas is on track to deliver another record full year result even though we're facing a US$200 million increase in our total fuel bill in FY18," chief executive Alan Joyce said in the airline's third-quarter update.

Mr Joyce added that the company was seeing robust results from each of its business units, which he attributed to "broadly positive" trading conditions.

Qantas said it had ordered six additional Boeing Dreamliners for its international fleet, that would enable the retirement of six 747s.

In February, the airline reported a record half-year underlying profit before tax of A$976 million due to cost cuts and hikes in domestic fares.

For the third quarter, revenue per available seat kilometre rose 8 per cent in the domestic market and was 5.2 per cent higher in the international market.

Domestic capacity, measured by available seat kilometres, rose 1.9 per cent in the third quarter, while international capacity was 2.3 per cent higher.

REUTERS