Australia's Qantas Airways said increased demand for international travel is expected to support higher jet fuel prices in the first half of the 2022-23 fiscal year to 30 June.
It is also protected from the recent rise in oil prices through its group hedging position, Qantas said. Around 90pc of the airline's fuel needs are hedged for the second half of 2021-22 at levels below current prices. The Argus jet-kerosine Singapore assessment closed on 29 April at $145.25/bl, up by $5.95/bl from the previous day.
Qantas did not revise its 2021-22 jet fuel cost estimates, which it said in February would be higher than the its A$835mn ($588mn) fuel costs in 2020-21.
Group domestic capacity is expected to be 105pc of pre-Covid levels in the April-June quarter of 2021-22, rising to about 110pc for July-September 2022-23, which was revised down from around 115pc for April-June 2022-23. Group international capacity is expected to be just under 50pc by the end of the current April-June quarter, rising to around 70pc for July-September 2022-23.
While Qantas still expects to post a significant full-year underlying profit before interest and tax loss for 2021-22, the business is on track for second half 2021-22 underlying profit before interest, tax, depreciation and amortisation of between A$450mn-550mn based on current expectations, the airline said. This puts Qantas on a trajectory to return to profitability in 2022-23, Qantas said. The airline's capital expenditure forecast for 2022-23 is unchanged at A$2.3bn-2.4bn.
"The recovery in business traffic has been faster than we expected," Qantas said. "Once mask mandates were removed and people went back to the office, there was a clear uptick in demand. We're now at around 85pc of pre-Covid levels for domestic corporate travel and more than 100pc for small business."
