Qantas Airways earns $4.4 billion; sells Melbourne terminal

Published on : Thursday, May 9, 2019

Qantas Airways said that the company remains on track to fully offset the impact of significantly higher fuel costs compared with last year, posting 2.3 per cent revenue growth in the first three months of 2019 to $4.4 billion. Group unit revenue was up by four per cent.



Qantas Airways noted that the increase in revenue this quarter came despite a shift in the timing of Easter, which commenced in the third quarter of FY18 (Sunday 1 April), moving wholly into the fourth quarter of FY19 (Sunday 21 April).



This resulted in revenue moving into the fourth quarter, with a favourable alignment between public holidays and school holidays driving very strong leisure travel demand, Qantas said.



Normalising for this shift, group RASK for the quarter grew by 5.5 per cent, measured by ticketed passenger revenue per available seat kilometre. Qantas said continued capacity discipline in group domestic (down 1 per cent) and group international (down 1.9 per cent) assisted with yield management and recovery of fuel costs.



The group domestic unit revenue of Qantas Airways increased by 1.1 per cent, in line with company expectations accounting the Easter timing shift. The airline said continued strengthening in the resources market offset weakening demand in other parts of the corporate market.



The overall market share of corporate travel revenue for Qantas Airways increased by 2.5 percentage points in the quarter to its highest level in three years, despite a net reduction in capacity.



Meanwhile, Qantas and Melbourne Airport have reached an agreement for the sale of domestic Terminal 1, currently owned by the airline. Qantas Airways has secured future access to the terminal with a 10-year access agreement for $355 million, with $276 million to be received in cash this financial year. The company says the remaining value will be accrued in the future.



The transaction includes all of Qantas’ aeronautical and retail assets transferring to Melbourne Airport, while the airline will retain exclusive access to Terminal 1, including lounges, for domestic services.



Options to operate some international flights from Terminal 1 outside of peak domestic times will be assessed.




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