Sydney: Australian carrier Qantas flagged Monday a hit to first half earnings with falling international airfares offsetting a decline in fuel prices.
The airline, which has turned itself around in recent years on the back of aggressive cost-cutting, said it expects underlying profit before tax to be between 800 and 850 million Australian dollars (Dh2.2 and Dh2.4 billion) for the six months ending December 31.
This compares to 921 million Australian dollars in the same period a year ago.
Qantas shares initially slumped more than nine per cent, but rebounded in early afternoon trade to be 3.7 per cent higher at 3.05 Australian dollars.
Chief executive Alan Joyce said the interim forecast was based on revenue falling 3.2 per cent in the three months to September 30 due to increased competition on international routes.
“Like most carriers globally, we are seeing international airfares below where they were 12 months ago,” he said in a trading update.
“But the impact of that is tempered by the competitive advantages we’ve been working hard to fortify including our strong domestic position and diversified loyalty business.
“We remain disciplined on cost, continue to manage capacity carefully to match demand, and have secured the benefit of lower fuel prices through our hedging.”
In the year to June 30, Qantas posted a record net annual profit of 1.42 billion Australian dollars and announced its first payout to shareholders in seven years.
It followed a push to cut some 2 billion Australian dollars in costs and restructure the airline over three years beginning in early 2014, with thousands of jobs axed and dozens of aircraft sold or orders deferred.
