Qantas Group has reported an underlying profit before tax of $1.6 billion for the 2018 financial year – a record for the national carrier.
All parts of the business contributed to the result, helped by healthy levels of demand across key markets, higher revenue and a particularly strong performance in the domestic flying businesses of Qantas and Jetstar.
Qantas chief executive, Alan Joyce, said the record profit reflected a strong market as well as the benefits of ongoing work to improve the business and build long-term shareholder value.
“These numbers show a company that’s delivering across the board,” said Joyce.
“Our investment in free Wi-Fi and cabin improvements are delivering a better experience for customers as well as higher earnings for Qantas and Jetstar.
“The overall value for the travelling public remains extremely strong, with domestic sale fares almost 40 per cent lower in real terms than they were fifteen years ago.”
He added: “We’re seeing healthy demand across key sectors matched with improving levels of capacity discipline, which is a positive sign for the year ahead.
“This record result comes despite higher oil prices.
“We’re facing another increase to our fuel bill for financial 2019 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.”
The result enables the group to return further capital to shareholders, keep investing for customers and reward its employees with a cash bonus.
Qantas announced up to $500 million to be returned to shareholders.
This comprises an increased, fully franked dividend of 10 cents per share to be paid on October 10th with a record date of September 6th, as well as an on market buy-back of up to $332 million.
This will bring the amount of capital returned to Qantas shareholders to $3.1 billion since October 2015 and the total reduction in shares on issue to around 26 per cent.
“We’re very pleased to reward our people with a bonus for this fantastic result.
“It brings the total amount set aside for non-executive employees to over $300 million over the past four years for their part in the group’s exceptional performance,” added Joyce.
Qantas will offer bonuses to 27,000 non-executive employees, worth a total of $67 million.
The group’s domestic flying operations delivered EBIT of $1.1 billion, which is 25 per cent higher than last year and represents a new record for the business.
This was achieved through the combination of Qantas and Jetstar’s network, schedule and product strengths in key markets, and supported by capacity discipline driving higher seat factors and higher unit revenue.
Qantas International increased its earnings by seven per cent to $399 million and maintained its margin in the face of strong competition and higher fuel prices.
Qantas International made several important structural changes during the year, including the introduction of the 787, new routes like Perth–London and taking on additional Trans-Tasman flying for partner Emirates.