Qantas lifts H1 outlook on stronger Q1 revenue

Qantas expects its underlying pre-tax profit for the six months to December 2017 to come in between A$900m and A$950m, aided by stronger unit revenues during Q1 of the 2018 fiscal year. The forecast, which was part of a trading update released by the Oneworld carrier, compares favourably with an underlying profit before tax of A$852m during the same period the year prior. Qantas also noted that its group revenue for the three months to 30 September increased 5.1% to A$4.19b. RASK increased by 3.1% overall, as domestic unit revenue grew 8% on a 2.7% fall in capacity. “The domestic market is healthy but remains very competitive,” says Qantas chief executive Alan Joyce. “The high rate of revenue growth we’ve seen so far this year is likely to slow when compared with what was a strong second half last year.” In response, the airline will reduce domestic capacity by 1% during the second half of the fiscal year as it continues to right size capacity in key markets. On the international front, the airline also reported a marginal 0.2% lift in international RASK during the first quarter, amid a larger increase in competitor capacity on routes from Australia. “There’s been a welcome easing of capacity growth in the international market but the indications are that it is likely to pick up pace again in the second half,” says Joyce. It expects that during H1, its international capacity will be up around 5%, and 3% in the second half as it continues to target strong-growing Asian markets.<br/>