Aviation

Qantas reports record first quarter results despite rising fuel costs

Qantas has managed to clock up record levels of revenue for the first quarter of FY19, up 6.3 per cent compared to last year.

According to the airline, this strong performance has helped offset a rise in fuel costs as well as higher commissions paid to travel agents on higher revenue and the impact of a weaker Aussie dollar.

Despite limiting 76 per cent of its fuel for FY19 and 39 per cent for FY20, the airline’s fuel cost for the year is expected to sit at $4.09 billion compared with $3.23 billion for FY18.

The airline also announced a multi-million dollar investment in a new First Lounge and expansion of its existing Business lounge at Singapore Changi Airport.

Qantas Group CEO Alan Joyce said a combination of positive market conditions and the Group’s strategic advantages was helping it perform well.

“Our record passenger revenue performance for the first quarter meant that we were able to substantially recover higher fuel prices,” said Joyce.

“Market demand for travel remains fundamentally strong and we’re seeing some wind-back of competitor capacity growth.

“When you look across our portfolio, we have a number of factors that help us manage cyclical headwinds impacting the sector. We have a leading position in the domestic market, structural advantages in our international businesses and diversified earnings from Loyalty.

“We have a strong focus on cost and we’re continuing to invest in aspects of customer experience that deliver a competitive edge and margin benefit.

“The lounge investment we’ve announced in Singapore is a good example of that.

“Based on the value of forward bookings and broader market conditions, we’re confident in our ability to manage higher fuel costs and keep investing, while still delivering strong net free cash flow and long-term shareholder value,” concluded Joyce.

Featured image source: Jesse Marlow via AFR

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