Feb 26 (Reuters) – Australia’s Qantas Airways on Thursday reported record first-half underlying earnings, bolstered by resilient travel demand across its flagship and budget offerings and helped by new aircraft joining its ageing fleet.
Australia’s flag carrier posted underlying profit before tax of A$1.46 billion ($1.04 billion) for the six months to December 31, beating the Visible Alpha consensus estimate of A$1.42 billion and the A$1.39 billion earned in the same period a year earlier.
New aircraft accounted for about 60% of profit growth at budget arm Jetstar, which reported a 38% jump in underlying operating earnings on strong leisure demand.
The domestic unit posted a 5% rise in revenue driven by higher capacity. Qantas International earnings slipped 6% due to higher costs, wages and personnel training for new planes.
The carrier took delivery of nine aircraft in the half and expects 30 more over the next 18 months.
“We’re already seeing the benefits from the next generation aircraft that are flying, which, along with strong demand … helped us deliver another strong result,” CEO Vanessa Hudson said.
“This gives us confidence in the benefits that will flow once Qantas’ new aircraft reach scale.”
The airline forecast second-half domestic unit revenue growth of 3%, in line with the prior six months, and fuel costs of A$2.5 billion, slightly lower sequentially.
Analysts at Jefferies said the first-half underlying profit before tax was a solid result, adding that the market focus would be on the outlook for strong demand to continue.
Shares opened 4% higher at A$11.09 apiece but quickly reversed course within minutes to trade 0.9% lower as of 2307 GMT.
Qantas also announced a share buy-back of up to A$150 million and an interim dividend of 19.8 Australian cents a share.
($1 = 1.4047 Australian dollars)
(Reporting by Sameer Manekar and Nikita Maria Jino in Bengaluru; Editing by Shinjini Ganguli and Tasim Zahid)
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