Qantas expects international unit to be twice as profitable as tourism rebounds
Rewrites through to focus on earnings forecast from long-haul flights, adds margins growth outlook in paragraph 2, adds outgoing CEO comment in paragraph 3, adds share movement in paragraph 7
May 30 (Reuters) -Qantas Airways QAN.AX on Tuesday forecast its international divisions to be twice as profitable in the post-COVID era on strong recovery in tourism, with earnings at domestic and loyalty divisions also projected to improve.
International margins at Australia's flagship carrier are forecast to grow to more than 8% in fiscal 2024, with its long-haul travel program Project Sunrise set to take off in late 2025, seen further boosting margins up to 12% in the future.
"This is a structurally different business than it was before COVID, operating in markets that have also changed," Alan Joyce, Qantas' outgoing chief executive officer said.
Project Sunrise, which will start with Sydney to London and New York on Airbus A350-1000 aircraft, is projected to deliver earnings in excess of around A$400 million ($261 million) every year from when all 12 aircraft ordered complete their first full year in service.
Qantas also expects its Loyalty division to reach its fiscal 2024 earnings before interest and taxes target of A$500 -A$600 million, rising further to A$800 million to A$1 billion by fiscal 2030.
Qantas reaffirmed its 2024 capital expenditure forecast provided in February of between A$3 billion and A$3.2 billion. That compares with its fiscal 2023 outlook of A$2.6 billion to A$2.7 billion.
Qantas shares were trading 1.8% higher as at 0300 GMT, marking their biggest intraday gain in nearly a week.
($1 = 1.5334 Australian dollars)
Reporting by Sameer Manekar and Navya Mittal in Bengaluru; Editing by Shailesh Kuber
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