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Qantas profit down as Jetstar rises

NZ Newswire logoNZ Newswire 23/02/2017 Rebecca Howard

Australia's biggest airline, Qantas Airways, reported a slide in first-half profit but its Jetstar Group, which includes New Zealand domestic and regional as well as Australia outbound flights among others, did better.

The Jetstar Group reported underlying earnings before interest and tax of A$275 million (NZ$295 million), up A$13 million on the year.

The performance was driven by a record result for Jetstar's international operations, while the Jetstar Group in Asia continued to improve its profitability, the Sydney-based company said in a statement.

It did not provide a specific breakdown for New Zealand but said New Zealand regionals were performing ahead of expectations.

For Jetstar International, which includes New Zealand domestic and regional and Australia outbound, passenger numbers jumped to 3.14 billion versus 2.72 billion in the same period a year earlier, while its revenue per kilometre rose 8.3 per cent and its available seat kilometres rose 4.5 per cent.

The company also noted it has been confirmed as a New Zealand government domestic travel supplier.

Qantas's group underlying ebit fell 8 per cent to A$949, while underlying pre-tax profit declined 7.5 per cent to A$852 million in the six months ended December 31, ahead of guidance.

Like other airlines in the region, Qantas is facing increased competition.

"The international market is tough because of capacity growth and lower fares," it said.

Separately, rival Air New Zealand today posted a 24 per cent fall in first-half pre-tax profit in the face of increasing competition.

Qantas shares rose 4.8 per cent to A$3.72 on the ASX, while Air New Zealand's NZX-listed stock gained 3.3 per cent to $2.22.

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