Qantas chief executive Alan Joyce has reason to smile as he says all businesses of the flag carrier performed strongly in the first half year.
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Qantas has upgraded it profit guidance.
This will increase the likelihood of capital management initiatives at the half-year profit announcement in February, although chairman Leigh Clifford has previously hinted the airline may not begin paying dividends this financial year because of the lack of franking credits.
The market update, announced on Tuesday that Qantas is expecting a windfall of 637 to 675 million U.S dollars, compared to this year’s pre-tax first half profit of 265 million U.S dollars.
The forecast represents a significant improvement on the $367 million reported in the year-earlier period, with the airline attributing the difference to cost cutting, revenue growth and benefits from lower fuel prices. Given the new surge in earnings, the airline may post a record $1.64 billion profit before tax for the current year ending June 30, 2016.
“We’ve seen improved revenue in our domestic and worldwide operations (and) reduced costs”, Joyce said in a statement to the Australian Stock Exchange (ASX) on Tuesday.
These factors are also at play as the transformation program is still ongoing, which has the airline on course to exceed the record 2008 full year pre-tax profit of 1.41 billion Australian dollars (1.02 billion US dollars).
Australia’s Qantas said it expected to post better-than-expected profits for the six months to December, boosted by lower oil prices and a continued focus on its revival plans.
Qantas reported a full year net profit of $557 million for FY15, nearly all of which was handed back to shareholders. Qantas shares were down 6.5 cents to $3.72 at 1410 AEDT.
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In another surprise move, Qantas persuaded retailer Woolworths to renew its reward scheme partnership in less than two months after the supermarket reworked the loyalty program to ditch frequent flyer points, reports AAP.
