Qantas Group reported a 1.8% revenue growth in the first quarter of its full-year 2020 results.
Revenues for the Qantas came in at $4.56 billion up from the $4.49 billion in the corresponding period last year. Group Unit Revenue increased by 2.1% compared to the prior corresponding period.
Total group capacity was down 0.2%. This was driven by a 0.6% decrease for group International while group domestic increased by 0.5% due largely to growth in the resources market.
The group has however stated that the protests in Hong Kong will negatively impact its first-half profit performance by $25 million, with on going capacity reduction in place to minimise the second-half impact.
Furthermore, the group warned of deterioration in global trade conditions impacting freight demand with an expected profit impact of $25-30 million for the full year.
The Group has fully hedged its fuel for FY20 with the ability to benefit from significant price falls. Based on a jet fuel forward market price of A$109 per barrel for the remainder of FY20, the group’s full year fuel cost is now expected to be $3.98 billion with a $29 million increase in the first half versus the same time last year. The worst case total fuel cost is $4.05 billion, the group said.
The Group remains on track to deliver at least $400 million in transformation benefits in FY20, with an increased focus on cost reduction initiatives in the second half.
Qantas Group CEO Alan Joyce said the record revenue result for quarter one showed the national carrier was positioned well to respond to continued mixed market conditions.
He said: “The Group continues to perform well, with strength in key parts of our portfolio helping to offset softness in other areas.
“Qantas International has seen significant upside from competitor capacity contracting more than anticipated, which is expected to continue for at least the remainder of the first half.
“Given the slower revenue environment, we have a strong focus on cost reduction to make sure we keep delivering on our transformation targets. Part of this is about taking opportunities to reduce complexity and constantly improving how efficiently we manage our business."