“Strong earnings in a mixed market” for Qantas.
Qantas has just released its results for the six months to 31 December 2019, with a 6.2% decline in statutory pre-tax profit, down to $648 million.
CEO Alan Joyce highlighted record group revenue of $9.46 billion, up 2.8%, and a record profit for the Loyalty division, while the underlying result was only $4 million lower than same period last year despite heavy impacts from disruption in Hong Kong, foreign exchange, freight weakness and increased operating costs after the sale of domestic airport terminals.
“The strong performance despite these factors was underpinned by capacity discipline, ongoing transformation and growing share in key markets,” the carrier said.
Demand weakness as a result of the evolving coronavirus situation will see capacity to Asia cut by 15% from now until at least the end of May, and the Shanghai route will remain suspended for the same period.
Joyce said there was weaker demand on Hong Kong and Singapore flights due to the pandemic, as well as Japan to a lesser extent. However other key routes such as the US and UK have not been impacted, he added.
Emerging domestic demand weakness will also see Qantas and Jetstar’s local capacity adjusted by about 2%.
He estimated the net negative impact of coronavirus on the carrier’s earnings would be between $100 million and $150 million at this stage.
More details in today’s issue of Travel Daily.