Qantas Group projects 2%-3% capacity growth for 1HFY2017, favouring international expansion

Qantas Group announced (24-Aug-2016) its outlook and expectations for FY2017:

• 1HFY2017:
• • Group capacity: +2%-3% for 1HFY2017, driven by increased aircraft utilisation;
  • Group domestic capacity: Flat to -1%;
    Group international capacity: +4%.
  • Operating environment: Qantas Group is planning for the mixed domestic and international operating environment to continue in 1HFY2017;
  • Unit revenue and costs: Expected to decline competed to 1HFY2016, with competitive industry pricing and resources sector weakness. This will be offset by a total unit cost improvement from the Qantas transformation program and lower fuel costs;
  • External factors: Short-term outlook remains subject to variable factors, including oil price movements, foreign exchange movements and global market conditions.
• FY2017 outlook:
• • Underlying fuel costs: No more than AUD3.2 billion (USD2433 million) or AUD3.1 billion (USD2357 million) at current forward AUD prices;
  • Depreciation and amortisation expenses: Approximately AUD150 million (USD114.1 million) higher than FY2016;
  • Full year lease expenses: Approximately AUD100 million (USD76.1 million) lower than FY2016;
  • Full year transformation benefits: AUD450 million (USD342.3 million);
  • Full year net capital expenditure: AUD1.5 billion (USD1141 million).

Qantas Group: "The Qantas Group expects to continue its strong financial performance in the first half of financial year 2017, in a more competitive revenue environment. We are focused on preserving high operating margins through the delivery of the Qantas Transformation program, careful capacity management, and the benefit of low fuel prices locked in through our hedging. The long-term outlook for the Group is positive, with clear strategic priorities and a robust financial framework to deliver for our customers, our people and our shareholders." Alan Joyce, group CEO. Source: Company statement, 24-Aug-2016.