Qantas Group has delivered its highest-ever first half underlying profit before tax, reporting a figure of $976 million for the six months ending December 31st.
The result surpasses the previous record of $921 million achieved in the first half of financial year 2016 and comes despite recent increases in fuel costs and continued international capacity growth.
Both underlying and statutory profit before tax were significantly higher, up 15 and 20 per cent respectively, than the first half of 2017.
Qantas Group chief executive Alan Joyce said the record result showed Qantas’ ability to keep delivering.
“After several years of consistent performance, we now have a lot of momentum behind us.
“We’re vigilant about maintaining that momentum and we’re confident about the future it allows us to build.
“Today’s result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route.
“We’re seeing continued capacity discipline in the domestic market, coupled with a product advantage that’s delivering a significant profit share to the group.”
Qantas and Jetstar’s domestic flying operations combined posted their highest ever first half underlying EBIT of $652 million.
The result was driven by ongoing capacity discipline and growing margins of both airlines, achieved through product and network superiority.
Qantas Domestic posted underlying EBIT of $447 million, up 20 per cent.
Unit revenue was up 8.6 per cent and load factor increased by 1.4 points to 78.7 per cent.
Qantas and Jetstar’s international operations performed well in the face of higher fuel costs and increased competitor capacity.
Underlying EBIT for Qantas International was lower, down 5.5 per cent to $222 million, however unit revenue increased slightly by 0.3 per cent.
A capacity increase together with load factor increasing by 3.1 percentage points to 84.4 per cent lifted overall revenue by 7.3 per cent.
Jetstar’s international operations generated strong earnings, helped by the operating costs of the 787-8 but impacted by around $10 million from the Bali ash cloud disruption.
Jetstar’s portfolio of airlines in Asia was profitable, driven by Japan and Singapore operations as well as a significant improvement in Jetstar Pacific’s performance as excess market capacity in Vietnam moderated.