Qantas gears up for world's longest direct flight

Qantas will run marathon ghost flights from New York and London to Sydney - which take about 20 hours - carrying just a few members of staff to see how the human body holds up before commercial services start as soon as 2022. The airline's announceme
Qantas will run marathon ghost flights from New York and London to Sydney - which take about 20 hours - carrying just a few members of staff to see how the human body holds up before commercial services start as soon as 2022. The airline's announcement yesterday came as it posted a 17 per cent fall in annual net profit, driven by fuel costs and a weaker Australian dollar.PHOTO: REUTERS

Qantas Airways will run marathon ghost flights from New York and London to Sydney carrying just a few members of staff to see how the human body holds up before commercial services start.

Qantas yesterday said it will simulate the world's longest direct flights, which take about 20 hours, with Boeing Dreamliners as soon as October. The payload of 40 passengers and crew, most of them employees, will undergo a host of medical checks and assessments.

The Australian airline wants to start direct flights connecting Sydney to New York and London as soon as 2022. Chief executive officer Alan Joyce describes the services as aviation's final frontier.

Qantas still has not decided on a Boeing or Airbus plane that can fly the route fully laden and without a break. "The things we learn on these flights will be invaluable," Mr Joyce said on a call yesterday.

Singapore Airlines currently operates the world's longest non-stop commercial flight, between Singapore and New York. It uses the Airbus A350-900ULR for the service which takes nearly 18 hours.

Qantas' announcement comes as it posted a 17 per cent fall in annual net profit, driven by fuel costs and a weaker Australian dollar, but the airline cheered investors with a A$400 million (S$375 million) share buyback and higher dividend.

The airline also said it would keep capacity flat in line with demand in a sluggish Australian economy.

POSITIVE SIGNAL

A buyback shows that they have a reasonably robust outlook, and it shows good capital management.

MR DAMIAN ROONEY, director of equity sales at Argonaut, on Qantas' share buyback.

"Looking ahead, we are feeling very confident about this financial year," Mr Joyce said.

Underlying pre-tax profit, the airline's most closely watched measure, was A$1.3 billion for the year ended June 30, down from A$1.57 billion.

That was below a consensus estimate of A$1.36 billion, according to Refinitiv data, but investors were forgiving of the shortfall that was largely due to a one-off non-cash provision for items including employee leave provisions.

Revenue at the airline, which celebrates its 100th anniversary next year, rose 5 per cent to A$17.97 billion. It plans to buy back up to 79.7 million shares in an off-market tender, and declared a fully-franked final dividend of 13 Australian cents per share, up from 10 cents.

Qantas shares were up 4.5 per cent in midday trade.

Fuel costs rose 19 per cent and are forecast to rise by another A$100 million in the current financial year, for which it is already fully hedged. "It's a mixed bag, but there are certainly some reasons to be cheerful," said Mr Damian Rooney, director of equity sales at Argonaut.

"With a good hedging structure and an improvement in the Aussie dollar, they will be able to improve," Mr Rooney added. "A buyback shows that they have a reasonably robust outlook, and it shows good capital management."

Bookings to Hong Kong are down 10 per cent following anti-government protests in the city, and the airline plans to cut capacity by 7 per cent over the next few months, Mr Joyce said.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on August 23, 2019, with the headline 'Qantas gears up for world's longest direct flight'. Print Edition | Subscribe