Australia's Qantas soars to record H1 profit, announces buyback

Australia’s Qantas Thursday posted a record H1 underlying profit as its strategy of cutting capacity and hiking fares boosted domestic revenue. Qantas booked a 15% rise in H1 underlying profit before tax, its most closely watched measure, to A$976m (US$761.48m) for the six months ending Dec. 31, above the airline’s guidance range. The airline, which controls nearly two-thirds of the domestic market, said overall revenue and other income rose 6 percent to A$8.66b helped by a 5% rise in revenue from its domestic segment. “We’re seeing continued capacity discipline in the domestic market, coupled with a product advantage that’s delivering a significant profit share to the group,” CE Alan Joyce said. The airline said domestic capacity was expected to decrease by about 1% in H2, which could drive ticket prices higher. Qantas has emerged from a three-year turnaround that involved slashing staff numbers and flying its jets more hours each day to boost revenue. The strategy worked, giving Australia’s biggest airline the confidence to proceed with its ambitions to have the world’s longest commercial flights operational by 2022.<br/>