SYDNEY (AFP) – Australian carrier Qantas yesterday announced a 16 per cent drop in net profit for the last six months of 2018, as rising fuel costs ended a record profit run for the company.
Net profit for the period came in at AUD498 million (USD359 million), compared to the record AUD595 million earned for the same period in 2017.
Underlying profit excluding one-off items fell 18.7 per cent to AUD780 million, the company reported.
Qantas CEO Alan Joyce attributed the profit hit to a sharp AUSD416 million jump in the airline’s fuel bill during the period to a total AUSD2 billion.
“Higher oil prices were a significant headwind and we moved quickly to recover as much of the cost as we could,” he said.
“That’s easier to achieve in the domestic market than on longer international routes, where fuel is a much bigger factor.”
The airline said it expected to recover the higher fuel costs by the end of the 2019 fiscal year in June.
Company revenue across all activities rose six per cent over the same six-month period, boosted by a strong performance on domestic routes by both Qantas and its low-budget counterpart Jetstar.
The profit outlook going forward looked good, Joyce said, with fuel prices expected to fall as the company deploys more fuel-efficient Boeing 787s and retires its older 747s.
“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,” he added.