Qantas full-year profit falls 17%, airline reveals test flights for Sydney to NY and London

posted on 22nd August 2019 by Justin Burns
Qantas full-year profit falls 17%, airline reveals test flights for Sydney to NY and London

The Qantas Group has reported a profit before tax of A$1.3 billion for the 2019 financial year, 17 per cent lower than 2018, as figures were weighed down by a $614 million increase in fuel costs.

Qantas has also revealed it is to operate three ultra long-haul tests flights with 40 passengers on board, to gather new data about inflight passenger and crew health and wellbeing, as it plots new long-distance connections to London and New York from the East Coast of Australia.

Qantas will run three separate research flights, using newly-built Boeing 787s before they go into regular service. Between October and the end of the year, it will collect these aircraft from the Boeing factory in Seattle, position them in New York and London, and fly direct to Sydney.

The flights form part of planning for Project Sunrise – Qantas’ goal to operate regular, non-stop commercial flights from the east coast of Australia (Brisbane, Sydney and Melbourne) to London and New York. It will make a decision on the project in December this year.

The airline wants to operate non-stop services from Sydney to London and New York by as soon as 2022. If launched, the services would be the world’s longest direct flights.

Qantas Group CEO, Alan Joyce said work towards non-stop flights from the East Coast of Australia to London and New York are the “final frontier of modern aviation”.

“These flights are ground-breaking in themselves. No commercial airline has done these kind of experiments before. No commercial airline has ever flown direct from New York to Sydney before,” he said.

He added: “We know that Boeing and Airbus have aircraft that can do the job, and we have their best-and-final offers on the table – including a compelling offer from Boeing to deal with any delay to the 777X.

“We have a high-level design of what our cabins would look like. And we’re working with regulators to allow flights beyond 20 hours.

“There’s plenty of enthusiasm for Sunrise, but it’s not a foregone conclusion. This is ultimately a business decision and the economics have to stack up.”

As for the results for the full-year, Joyce said the performance was particularly positive given mixed market conditions.

“This result shows the strength of our individual businesses but also the strength of our portfolio as a whole. Even with headwinds like fuel costs and foreign exchange, we remain one of the best performing airline groups in the world,” he said.

Joyce said looking ahead, the overall market remains mixed, as domestically it is seeing weakness in the price sensitive leisure market, but premium leisure demand is steady.

He added internationally, the outlook remains positive for premium international travel demand, helped by a reduction in broader market capacity.

“Our anticipated flat Group domestic capacity for the first half of FY20 reflects the mixed environment, and we’ll continue to monitor our settings against demand and our strategic position,” Joyce said.

Qantas said is completely refurbishing its 12 Airbus A380 aircraft with the first expected to be in service by September. Delivery of six additional 787-9s for Qantas International from October 2019, taking the total fleet to 14 aircraft.

The airline will be growing lounge capacity in Qantas’ Singapore hub by 60 per cent, including an expansion to the existing business lounge and opening of a new first lounge.

Qantas has also started preparations to introduce the A321neo to low-cost arm Jetstar, with 18 aircraft to begin arriving from mid-2020.

Group capacity is expected to increase by one per cent in in the first half of the 2020 financial year. Group domestic is expected to be flat to slightly down. Group international is expected to increase by1.5 per cent.