The Qantas Group has delivered its highest-ever first half Underlying Profit Before Tax of AU$976m for the six months ending 31 December 2017.
The result surpasses the previous record of AU$921m achieved in the first half of FY16 and comes despite recent increases in fuel costs and continued international capacity growth. Both Underlying and Statutory profit before tax were significantly higher (15% and 20% respectively) than the first half of FY17.
Net debt continued to fall and remains towards the bottom of the range, at AU$5.1bn. Sixty per cent of the Group fleet is unencumbered, including two new 787-9s purchased with cash. Debt maturity has been improved by an eight year, AU$350m corporate debt program and short term liquidity remained strong at AU$2.8bn. Operating cash flow increased by 48% to reach a record AU$1.7bn, providing excess capital for reinvestment and for returns to shareholders.
Jetstar will start taking delivery of aircraft from its existing order of 99 A320 aircraft, beginning with 18 A321LR NEOs from mid-2020.
These next generation, longer range aircraft can fly routes like Melbourne and Sydney to Bali, currently operated by the 787-8 Dreamliner. The arrival of the first four long range NEOs will add capacity on these routes with potential to also free up some 787-8 flying time for use on other leisure routes such as Vietnam, China, Thailand and Hawaii.
All 18 A321LR NEOs are expected to be delivered by the end of 2022 to replace Jetstar’s oldest A320s for use on domestic and international routes, and will each deliver a fuel burn improvement of around 15%.
The Qantas Group retains flexibility with the sequencing of the rest of its A320 NEO order, which is approximately an even split of 232-seat A321LR NEOs and 186-seat A320 NEOs. The order is primarily focused on aircraft replacement but with scope to allow for growth depending on market conditions.