A report by Scott Rochfort in the Sydney Morning Herald says that Qantas has fuelled expectations it will easily exceed its March profit forecast after reporting another solid set of monthly traffic figures.
Shares in the airline rose 5c to $5.75 yesterday after it reported passenger loads and yields (average fares) for April had risen on the year.
For the eighth time in 10 months, Qantas reported it had filled more than 80% of its seats, with overall loads up 0.8% to 82.2% in the year.
In the 12 years since it listed on the stockmarket, Qantas has reported monthly load factors above 80% on only 22 occasions.
JP Morgan analyst Matt Crowe said he was not surprised by the robust figures, with in a note to clients earlier this year Mr Crowe estimated “every sustained 100 basis point increase in load factors across the group adds $150 million to pre-tax profit”.
Qantas said its international yields in April were up 8.7% and domestic yields up 4.4% in the year, the yield rises mainly comprising airfare rises and unlike the previous few years, fuel surcharge rises.
Thanks to a surcharge cut in January, domestic and trans-Tasman fuel levies are the same as they were a year ago with surcharges to the UK and Europe having fallen since April last year.
The strong figures make a further mockery of the Airline Partners Australia’s dire warnings Qantas shares would slump if shareholders did not accept its $5.45 a share bid with the Macquarie-led offer having collapsed only five weeks ago.
Going by its March profit upgrade, Qantas is expected to report a full-year $939 million pre-tax profit, but analysts’ consensus forecasts are that the figure will be closer to $1.1 billion, which will be a record.
Despite the recent rise in oil prices, Qantas is expected to be helped by the rising Australian dollar, with many of its costs, including fuel and capital equipment, incurred in US dollars.
Qantas has also been helped by surcharges and fuel hedging offsetting oil price rises.
Yesterday the airline said it had also locked in 63% of its fuel needs for 2007-08 “at a worst case rate of $US70 a barrel” of West Texas Intermediate, which is presently trading around $US66 a barrel.
Report by The Mole and The Sydney Morning Herald
