BENGALURU (India) • Australia's Qantas Airways yesterday posted a 2.3 per cent rise in third-quarter revenue and forecast record annual revenue, as more business travellers chose to fly with the airline.
The country's largest airline said group revenue rose to A$4.4 billion (S$4.2 billion) in the third quarter ended March 31.
Qantas' overall market share of corporate travel revenue increased by 2.5 percentage points in the quarter to its highest level in three years.
Domestic demand has been mixed, with corporate demand from the resource sector continuing to grow, chief executive officer Alan Joyce said.
He added that the company was facing some weakness in the domestic corporate market, especially in May and June, from financial services, telecommunications and parts of the construction industry.
The Australian domestic aviation market is largely a duopoly of Qantas and smaller rival Virgin Australia Holdings, both of which have increased fares and boosted domestic earnings by keeping a lid on capacity.
Qantas is expected by analysts on average to report revenue of A$18.03 billion for the year ending June 30, up 5.6 per cent, according to data from Refinitiv.
It posted a record revenue last fiscal year as well, when it rose 6.2 per cent to A$17.06 billion.
The company, in its trading update yesterday, did not disclose its third-quarter underlying profit before tax, its most closely watched measure. It also did not provide the profit outlook for the fiscal year ending June 30.
In February, the airline reported a half-year underlying profit before tax of A$780 million, its lowest since 2015 as a rise in international revenue failed to fully offset a margin squeeze from higher fuel prices.
Qantas shares were up 2.5 per cent yesterday afternoon, after rising as much as 4 per cent earlier.
In the third quarter, Qantas cut domestic capacity by 1 per cent and international capacity by 1.9 per cent, which helped the airline recover some fuel costs.
The company said it remained on track to fully offset the impact of significantly higher fuel costs this year, compared with last year.
Revenue per available seat kilometre, a measure that combines fares paid and the percentage of seats filled, grew by 5.5 per cent in the four months from Jan 1.
Qantas also said it settled the sale of a terminal at Melbourne Airport and secured future access to it for A$355 million, of which it would receive A$276 million in cash in the current financial year, with the rest accrued in future periods.