Australia’s Qantas flags hit from higher fuel prices

A ground worker walking near a Qantas plane is seen from the international terminal at Sydney Airport, as countries react to the new coronavirus Omicron variant amid the coronavirus disease (COVID-19) pandemic, in Sydney, Australia, Nov 29, 2021. REUTERS/Loren Elliott/File photo

Australia’s Qantas Airways said on Monday higher fuel prices were expected to drive its fuel bill higher by about A$200 million ($128.80 million) in the first half of financial year 2024.

“Fuel prices have increased by around 30 percent since May 2023, including a 10- percent spike since August. This is driven by a combination of higher oil prices, higher refiner margins and a lower Australian dollar,” the carrier said in a statement.

The company expects a further A$50 million impact due to non-fuel-related foreign exchange changes in the first half of the current fiscal year.

Qantas said it would invest a further A$80 million during fiscal 2024 to address “customer pain points”, as it faces reputational damage after the country’s competition regulator sued it for selling tickets on thousands of already-cancelled flights.

The carrier said its initiative would include improvements to call center resourcing, more frequent flyer seats, and a review of longstanding policies for fairness.

Qantas said the customer-improvement initiative would be funded from its profit. It reported an annual underlying profit before tax of A$2.47 billion for the fiscal year ended June 30, swinging from a loss of A$1.86 billion a year earlier.

($1 = 1.5528 Australian dollars)