Qantas’s underlying profit before tax for the 2018 fiscal year grew 14% to A$1.6 billion ($1.2 billion) as rising demand helped offset growing fuel costs.
Revenue across the Qantas Group for the year to 30 June rose 6% to A$17 billion, driving RASK up 4% to 8.31 Australian cents. Expenditure rose by 5.4% to A$15.5 billion, pushing CASK up 3% to 7.26 cents.
RPKs grew 5%, outpacing 1% growth in capacity, resulting in group load factor increasing 2.6 percentage points to 83.2%.
Net profit for the group rose 15% to A$980 million.
“These numbers show a company that is delivering across the board,” says chief executive Alan Joyce.
Cash and cash equivalents at the end of the year amounted to A$1.69 billion, down from A$1.78 billion at the start of the year. Despite net operating cash flow of A$3.41 billion, the carrier used cash to invest in its fleet, repay debt and buy back shares.
By segment, Qantas’s mainline domestic operations delivered a record underlying earnings before interest and taxation (EBIT) of A$768 million, up 19% year-on-year. The carrier pointed to “continued capacity management discipline” which drove unit revenue up 8%.
Qantas International delivered EBIT growth of 6.7% to A$399 million, despite its margins remaining static.
Jetstar delivered 11% growth in EBIT to A$461 million as its domestic operations contributed a record earnings result, while its Asian affiliates were all profitable. Seat factor across the budget carrier group increased 2.5 points to 85.6%.
While not giving any profit guidance, the carrier expects that it will be able to overcome a projected A$690 million increase in fuel costs. For the first half of the 2019 fiscal year, it has around 97% of its fuel requirement hedged
“We’re facing another increase to our fuel bill for FY19 and we’re confident that we will substantially recover this through a range of capacity, revenue and cost efficiency measures, in addition to our hedging program,” says Joyce.