Qantas posts 4 percent fall in annual profit to $100 million but says market is improving

Qantas posts 4 pct drop in annual profit to $100M

SYDNEY — Qantas Airways Ltd. posted a 4.3 percent fall in annual profit — partly blaming the Icelandic volcano ash that shut down air travel over Europe earlier this year — but said market conditions were improving.

Net profit for the 12 months through June was 112 million Australian dollars ($100 million) compared with AU$117 million the previous year, Australia’s largest airline said Thursday.

The aftershocks of the global recession and lower ticket prices amid competition at home and overseas continued to hurt revenue, which fell 5.7 percent to AU$13.8 billion.

Qantas chief executive Alan Joyce said profit for the next six months may be “materially stronger” than a year earlier as demand for leisure travel and premium class seats continues to recover.

Within Australia, Qantas regained its position as the most profitable domestic airline helped by its strategy of operating a full-service airline and the budget carrier Jetstar, he said.

“The airline’s international business also improved, despite the impact of the Icelandic volcano on international operations,” Joyce said in a statement. The disruption resulted in lost revenue and additional costs of AU$46 million, he said.

Underlying profit before tax — which strips out one-time gains and losses — for the year was AU$377 million, within the airline’s guidance of AU$300 million to AU$400 million, it said.

Qantas expects to increase its seat capacity in the six months through December by 9.6 percent from a year earlier.

In February, Qantas posted a 72 percent dive in first half net profit to AU$58 million, blaming a drop in demand.