Qantas Airways Ltd. reported its lowest annual profit in four years and scrapped a planned stock buyback after the Iran war sent the price of fuel soaring.
Underlying pretax profit fell 14% to A$2.06 billion ($1.5 billion) in the year ended June 30, the Australian airline said Thursday, meeting analyst expectations. The airline scrapped a stock buyback of as much as A$150 million that was announced in February.
Carriers worldwide have been grappling with higher fuel prices since the Middle East conflict started in late February. Higher fares on some routes, as well as axing some flights altogether, haven't been enough for Qantas to offset the increase in fuel costs, which is one of the largest expenses for an airline even in normal market conditions. The net impact of Middle East conflict was A$420 million, including higher fuel costs, Qantas said.
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Still, Qantas said "travel demand remains resilient as customers continue to prioritize travel."
Demand on international routes and on Jetstar, the airline's low-cost carrier, "remains strong," supported by travelers avoiding Middle East routes, Qantas said. Demand for flights within Australia is broadly in line with the final quarter of the last fiscal year, Qantas said.
Qantas shares have fallen 11% this year, cutting the airline's market value to below A$14 billion.
With new long-range planes on the way, Qantas said it will gradually phase out its A380 fleet from 2028. The airline said it's also in talks with Airbus SE and Boeing Co. about converting about 20 existing purchase rights for new planes to firm orders from 2030.
While Qantas is the dominant domestic airline, controlling about two-thirds of the market, there are signs competition is set to stiffen. At least three new airlines, including VietJet Aviation JSC, are eyeing Australia in what's shaping up to be the biggest challenge to Qantas since the company listed in 1995.
In search of growth overseas, Qantas is preparing to start in October next year the world's first non-stop services connecting Sydney with London and New York. The first ultra-long-range Airbus A350-1000, fitted with an extra fuel tank so it can make the distance in one hop, is due to be delivered to Qantas in April.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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