Qantas’ layoffs and operational changes could finally be paying off, with reports the airline is poised to reveal an underlying profit of around $1 billion this year.
USB analyst Simon Mitchell said the airline might reach its 2008 record of $1 billion for the first time in years, The Sydney Morning Herald reported.
He expects the airline’s pretax profit to reach $1.7 billion during the next financial year – this will exceed the previous pretax earnings record achieved in 2008 of around $1.41 billion.
The airline’s profits are expected to reach a record high for the first time since 2008.
The analyst also predicted the airline will consider replacing its aged Boeing 747s and Airbus A330s with new Boeing 787-9 aircraft.
“We see FY16 as peak profit, aided by transformation gains and a lag in passing on fuel savings.”
Simon Mitchell, USB analyst
Meanwhile, yesterday Qantas announced it will cut fuel surcharges on international flights to meet lowered fuel prices, however the cost of its fares will remain the same.
The move followed Virgin Australia’s decision to no longer charge a separate fuel surcharge on flights to American. This saw Virgin prices to the destination drop by $40 for economy and $50 in business class.
Virgin Australia decided to drop its fuel surcharges to meet the shift in fuel cost.
Other Asia Pacific carriers have also followed suit, dropping their fuel surcharges.
However, Qantas says its prices remain competitive and instead of permanently dropping fares, decided to have a major sale on flights including those to LA.
“In a highly competitive environment where customers are already paying less than they were several years ago, lower oil prices can help put the industry on a more sustainable footing. It means airlines are in a better position to invest in the new aircraft, new lounges and new routes that ultimately benefit customers.”
Alan Joyce, Qantas Group chief executive