Qantas shares slip after news of fuel cost hit
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More news: Shares in Qantas are down 1.8% to $5.21 after the beleaguered airline said it faces a $200 million first-half hit due to the recent spike in fuel costs. It also outlined another $50 million impact from foreign exchange rate changes and an additional $80 million spend on initiatives to improve customer service.
Qantas flags fuel cost hit, customer improvements spending
The news: Qantas has warned that recent spikes in fuel prices will inflate its fuel bill for the first-half and also outlined higher spending on customer improvements.
The numbers: The airline said fuel prices have jumped 30% since May, and if these higher prices are sustained, its fuel bill in the first half of FY2024 will increase by $200 million to reach $2.8 billion. It expects a further $50 million impact due to foreign exchange changes. Meanwhile, the company will spend an additional $80 million on customer initiatives including training and resourcing call centres, more frequent flyer seats and a review of inflight catering.
The context: The higher fuel costs add to a growing list of headaches for Australia's biggest airline. Qantas, which posted a $1.7 billion profit last month, has been under fire over its customer service and also faces fines of up to $250 million after the ACCC alleged it sold tickets for more than 8000 flights it had already cancelled. Its new CEO Vanessa Hudson was last week forced to apologise publicly over the ongoing shortcomings.
The source: ASX announcement
