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Abu Dhabi, UAESunday 16 December 2018

Qantas Airways profit rises on capacity growth

Emirates codeshare partner has restructured, slashed cost base to position itself for future

Qantas Airways Airbus A330-300 jet takes off from Sydney International Airport. The carrier posted a 17.5% rise in net profit for the six months to 31 December 2017. Jason Reed / Reuters
Qantas Airways Airbus A330-300 jet takes off from Sydney International Airport. The carrier posted a 17.5% rise in net profit for the six months to 31 December 2017. Jason Reed / Reuters

Australia’s Qantas Airways, which has a codeshare partnership with Dubai flag carrier Emirates, posted a 17.9 per cent jump in interim net profit for the six months to December 31, citing strong performance from its domestic arm.

Net profit stood at A$607 million ($473m) in December 2017, up from A$515m for the corresponding period in 2016.

“We’re seeing continued capacity discipline in the domestic market, coupled with a product advantage that’s delivering a significant profit share to the group,” said Qantas chief executive Alan Joyce.

“Today’s result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route.”

In August last year, Qantas and Emirates agreed to extend their agreement for another five years. Last Friday, the two carriers welcomed the Australian Competition and Consumer Commission’s draft proposal to give a green light to the extended partnership, which aims to offer travellers improved schedule choice and increased frequent flyer benefits.

Qantas’ underlying profit before tax, its preferred profit measure that strips out one-time costs, was the highest in the airline’s history at A$976m in the six months to December 31.

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Revenue stood at A$8.6bn, up 4.8 per cent year-on-year.

Qantas on Thursday also announced a share buyback and outlined plans to create one of the southern hemisphere’s largest pilot academies.

The carrier completed a substantial restructuring in 2016, shedding staff, cutting flights and making other efficiency and cost savings. The move helped it announce a then-record annual profit and its first final dividend in eight years in August 2016.

The coming year will be a “transition year to set up a bright future” for Qantas, Mr Joyce said, with a series of planned network changes on flights to Europe, and a new Boeing 787 Dreamliner joining the fleet.

“We operate in very competitive markets across the group, and we’re focused on continuous improvement.”