Australia's flagship carrier is on track for a record half year profit thanks to low fuel prices, revenue growth and its continued cost cutting program, the airline announced on Tuesday.
Underlying profit before tax is expected to be between 875 million and 925 million Australian dollars (634million and 670.23 million U.S. dollars) for the six months to December 31, Qantas Airways said in a statement on Tuesday, an increase on the 367 million Australian dollars (265.92 million U.S. dollars) it reported in the corresponding period last year.
"We've seen improved revenue in our domestic and international operations, reduced costs across the group through the Qantas Transformation program, and expect another record half-year result from Qantas Loyalty," said chief executive Alan Joyce. "This strong performance is underpinned by our continued focus on delivering the best service for our customers in all of the markets we serve."
Qantas' forecast includes an estimated 17 million Australian dollar (12.32 million U.S. dollar) non-cash impact from bond movements on employee provisions and the 25 million Australian dollar (18.11 million U.S. dollar) one-off impact to low-cost subsidiary Jetstar from disruption caused by volcanic activity in Bali.
Qantas has been undergoing a significant restructure following a 2.8 billion Australian dollar (2.03 billion U.S. dollar) loss in the 2013/14 Australian financial year, bouncing back into profit in the 2014/15 financial year thanks to the 2 billion Australian dollar transformation program, a fuel hedging program and revenue growth.
Qantas reported a full year net profit of 557 million Australian dollars (403.59 million U.S. dollar) - 975 million Australian dollars (706.46 million U.S. dollars) underlying pre-tax profit - for the 2014/15 financial year, almost all of which was handed back to shareholders while regaining its investment grade credit rating.
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 U.S. dollars). The corresponding half-year pre-tax profit was a record 905 million Australian dollars (655.74 million U.S. dollars). Qantas is expected to announce its first-half earnings on Feb. 23.
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