Qantas has reported a moderate fall in profits, with the airline blaming a rise in fuel costs for much of the 6.5 per cent slide in net earnings.
The airline posted a statutory net profit of $891 million, down from $953 million last year.
Its preferred measure of underlying profit before tax was down even more sharply, dropping 17 per cent to $1.3 billion.
Qantas said it had earned record revenue over the last financial year, but a $614 million increase in fuel costs from rising oil prices and a further $154 million hit from the lower Australian dollar on non-fuel foreign expenditures.
“Even with the headwinds like fuel costs and foreign exchange, we remain one of the best performing airline groups in the world,” said the airline’s chief executive Alan Joyce.
“Looking ahead, the overall market remains mixed. Domestically, we’re seeing weakness in the price sensitive leisure market but premium leisure demand is steady.
“Overall demand from our corporate customers is flat, with continued strength in the resources sector offsetting weaker demand from other industries, like financial services and telecommunications.”
Qantas is feeling confident enough about the outlook to pay shareholders a fully-franked final dividend of 13 cents per share and to buy back as many as 79.7 million of the company’s shares.
More to come.