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Qantas profit falls, Jetstar solid

Qantas profit falls, Jetstar solid

The Kiwi carrier's full year earnings fell 21 per cent in an increasingly competitive market, but were still the second highest ever as the airline continues to benefit from lower jet fuel prices and the country's ongoing tourism boom.

Qantas has reported an underlying profit before tax of $1.4bn for the 12 months ended 30 June 2017 on sales of $16.1bn (-0.9%), as net profit slipped 17%, to $853m.

The carrier, based in Australia, posted its second largest profit to date, and announced Friday it would repurchase up to A$373 million equal to $295 million in stock even as its shares traded close to record highs.

Although down almost 9% from that record, Chief Executive Alan Joyce says the company's turnaround is complete. "We tackled some hard structural issues, became a lot more efficient and kept improving customer service".

"Today's announcements show this plan has well-and-truly paid off", Mr Joyce said in a statement.

Joyce unveiled ambitious plans for non-stop flights from Australia's eastern seaboard to Europe, a major undertaking the airline has dubbed "Project Sunrise".

Analysts were expecting earnings to be $1.39 billion.

Qantas also confirmed plans to sell non-stop flights from Sydney to London and NY by 2022.

-17.2% Fall in annual net profit.

"This will be one of the most strategically important aircraft orders in the history of Qantas". A direct flight would cut total journey time by up to four hours on Sydney-London and nearly three hours on Melbourne-New York.

As its global rivals added additional flights, Qantas' earnings from its worldwide flights dropped by 36%.

Qantas has announced a non-executive bonus of $2,500 for full-time and $2,000 for part-time employees, for the successful completion of the turnaround program.

In the domestic market, Qantas and Jetstar combined reached a record $865 million underlying EBIT, making them again the two most profitable airlines in Australia with around 90 per cent of the total domestic profit pool.

Qantas International, which has faced high levels of capacity growth in the broader market, saw a 36% decline in underlying EBIT, to $327 million, on revenue of $5.7bn.

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