Qantas makes a record profit in 2018 financial year

posted on 29th August 2018 by Justin Burns
Qantas makes a record profit in 2018 financial year

The Qantas Group made a record underlying profit in the 2018 financial year (FY18) of A$1.6 billion – 14 per cent higher than last year and five per cent up on the previous record in 2016.

Domestically – Qantas and Jetstar combined – achieved a record an underlying profit of $1.1 billion – 25 per cent up on last year. The Group is seeing “healthy levels of demand in all parts of the domestic market”.

Qantas’ international sector delivered a seven per cent earnings increase off the back of a four per cent increase in capacity. Load factor – the measure of how full our flights are – rose to 84 per cent.

Qantas chief executive officer, Alan Joyce said customers have “given their stamp of approval” to network changes internationally and the new Perth–London route is the highest rating service on its network.

He also said the introduction of the Boeing 787 on other routes – gradually replacing the 747 to places like San Francisco, New York and Hong Kong – has been “very well received”.

Joyce said changes to the airline group’s hubs, giving customers the option to transit through Singapore or Perth with Qantas, or via Dubai with partner Emirates has also been a hit.

He added: “Most of these changes only kicked in from March, so the financial benefit attached to them will flow through properly in FY19. Just the change to our Singapore hub alone is estimated at $80 million per annum.

“Jetstar International delivered another strong profit, even as it dealt with an $11 million hit from the Bali volcano as well as supporting new routes. All three of the Jetstar airlines in Asia were profitable.”

Joyce said like other airlines, Qantas faces the challenge of higher fuel prices and its fuel bill was up by almost $200 million in FY18 and it is expecting it to be up another $690 million in FY19.

He said: “It’s a significant increase – but we’re confident we will substantially recover it, particularly given the strength of our forward bookings, our advantages in both the domestic and international markets, and our continued focus on transformation.”

As for the future, Joyce said there will be new aircraft for Jetstar and Qantas and the roll-out of Wi-Fi on much of the domestic network.

In terms of routes, a lot of preliminary work on Sydney to London and New York direct links with Project Sunrise has been completed with direct flights set to start by 2022.

Over the next 12 months, work will start on a major upgrade of the carrier’s Airbus A380 cabins and it is looking at upgrading the cabins of turboprops and Jetstar A320s.

Joyce concluded: “After 98 years, the national carrier is the strongest it’s ever been. And we see that as a great platform to keep making it better.”