In an Oct. 24 trading update covering the first quarter of fiscal year 2020, Australian flag carrier Qantas reported that total group revenue was up by 1.8% to a record AUD4.56 billion ($3.17 billion), driven largely by strong international performance.
Group revenue was AUD4.49 billion in the prior corresponding period.
Headwinds from foreign exchange expenses and the impact of Hong Kong unrest and the ongoing trade war had a downward effect on freight revenue in Q1.
Protests in Hong Kong are expected to negatively impact the group’s first-half profit performance by about AUD25 million. Further deterioration in global trade conditions and the lessened freight demand is expected to result in a downward profit impact of between AUD25 million and AUD30 million for the full year.
Group unit revenue increased 2.1% versus the prior corresponding period. Total group capacity was down 0.2%, driven by a 0.6% decline in group revenue from international operations, while revenue from domestic operations increased by 0.5%, largely due to growth in the resources sector.
International operations at Qantas have experienced significant upside from a more than expected contraction in competitor capacity, which is expected to continue for at least the remainder of the first half, while domestically, competitor capacity is set to increase despite weakness in the market.