Qantas has reported a 6.5% fall in full year profit, as higher fuel costs and weak domestic travel demand bites into its bottom line. The airline said Thursday its profit after tax for the year to June 30 was A$891m. On an underlying basis Qantas' profit before tax was $1.3b - a fall of 17%. Qantas said the result was driven by a $612m increase in its fuel bill, plus another $154m headwind from the weak Australian dollar. Qantas also announced an off-market buyback of almost 80m shares, worth about $400m at its most recent share price. Once completed, the company will have reduced its shares on issue by almost one third since 2015. Profit from Qantas' domestic operations, its biggest earner, were down 3.3%. It cut capacity on domestic routes by 1.5% during the year while its seat factor was flat. <br/>
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IAG has accused Heathrow Airport of "treating customers with contempt", citing a plan under which passengers will contribute GBP3.3b (US$4b) in up-front costs for a third runway at the London hub. Willie Walsh, IAG's CE, believes that the true cost of the expansion will likely be far greater than what Heathrow is currently estimating. "Advance costs are spiralling out of control," he complains. In a submission to a UK Civil Aviation Authority consultation on the airport's plans, IAG asserts that it has absolutely no confidence in Heathrow's ability to deliver cost-effective expansion. The airline group estimates that initial construction and planning costs, originally forecast at GBP915m, have more than doubled over the past 2 years. IAG expects that the original GBP14b expansion bill will balloon to GBP32b. <br/>
Europe’s first proposed commercial plant that converts waste to jet fuel is set to come into operation in 2024. Altalto Immingham, a joint venture between Royal Dutch Shell, IAG, and Velocys, said Tuesday that it has submitted a planning application to start construction on the factory near Immingham, England in 2021. Using technology from green-fuels maker Velocys, the plant will take in more than half a million metric tons of nonrecyclable “everyday” household and commercial waste a year, converting it into fuel that offers a 70% reduction in net greenhouse gas emissions over fossil fuels, Altalto said. British Airways said it would use fuel from the proposed plant as part of industry targets to halve carbon-emissions by 2050, from 2005 levels. <br/>
Cathay Pacific Airways predicts revenue for August will be affected significantly by this summer’s mass civil protests in Hong Kong, weakening inbound and outbound traffic. The airline said its July traffic figures, released Aug 21, were not hurt much by the protests, but expects that will not be the case for its next monthly report. Cathay chief customer and commercial officer Ronald Lam said that business and leisure traffic into Hong Kong “has weakened substantially” this month. Outbound traffic is also “starting to soften,” particularly on the carrier’s short-haul Asian network. Passenger demand was “strong in the first half of the summer peak,” Lam said. However, yield was “under pressure due to intense competition and increasing transit passenger traffic.” <br/>
New York’s 27 delegates to the US House of Representatives have asked American Airlines and its mechanics’ unions to reach an agreement that prevents jobs at New York-area airports from being shipped overseas. American employs more than 2,000 workers represented by the TWU-IAM Association across New York JFK, New York Newark and LaGuardia airports. In an Aug 16 letter to American CE Doug Parker and the TWU-IAM Association, the lawmakers wrote: “We again ask your organisations to work together in good faith to come to an agreement that maintains these American jobs ... While ensuring American safety standards are applied universally.” An American spokesman said the company “shares the eagerness expressed in the letter to reach a new contract with our mechanic and fleet service team members.” <br/>