Fares help Qantas post record first quarter revenue

Higher airfares have helped Qantas post record first quarter revenue and offset rising fuel costs.

Qantas jets at Sydney International Airport. Pic: AAP

Higher airfares have helped Qantas achieve record levels of revenue in the first quarter of the 2019 financial year, and offset rising fuel costs.

In the three months to September 30, total revenue for the Qantas Group (QAN) lifted 6.3 per cent to $4.41 billion, compared to the same period last year.

Passengers paid an average 5.4 per cent more for a seat than in the first quarter of the 2018 financial year, as the airline maintained a tight grip on capacity.

Looking ahead, there are no plans to increase capacity despite an 8 per cent increase in the value of forward bookings, with domestic capacity set to fall up to 1 per cent.

It is expected the restraint will help Qantas substantially recover increased fuel costs, which are now set to top $4 billion for the year, compared to $3.23 billion the previous year.

Group CEO Alan Joyce said the positive market conditions and the group’s “strategic advantages” were helping the carrier perform well.

“Our record passenger revenue performance for the first quarter meant that we were able to substantially recover higher fuel prices,” Mr Joyce said.

“Market demand for travel remains fundamentally strong and we’re seeing some windback of competitor capacity growth.”

Qantas chief executive Alan Joyce. Pic: AAP

Looking across the airline’s portfolio, Mr Joyce said a number of factors were helping the group manage “cyclical headwinds”.

“We have a leading position in the domestic market, structural advantages in our international businesses and diversified earnings from Loyalty,” he said.

“We have a strong focus on cost and we’re continuing to invest in aspects of customer experience that deliver a competitive edge and margin benefit.”

Qantas also announced a new first class lounge and the expansion of its existing business lounge at Singapore’s Changi Airport.

Mr Joyce said the multimillion-dollar investment would increase the airline’s lounge capacity at Changi by 60 per cent.

“With the return of our A380 service to Singapore, we’ve got more passengers transiting through our existing lounge and strong demand for travel in premium cabins,” he said.

“Our top tier frequent flyers tell us their pre-flight lounge ritual is one of their trip highlights and the Singapore First Lounge will be no exception.”

The new lounge is expected to open towards the end of next year, cementing Singapore’s importance to the Qantas Group as the largest hub outside of Australia.

The Flying Kangaroo operates more than 50 return services in and out of Changi a week making it one of the largest foreign airlines to work out of Singapore.

Artist's impression of the new first class lounge planned for Changi airport