Virgin Blue will launch its long-haul brand V Australia during the 2008 Beijing Olympic Games.
Qantas and Virgin Blue could expect a brighter future if oil prices stay where they are, while a weaker Australian dollar may cast some clouds over it, according to analysts.
A report by UBS Investment has projected net profit for Qantas would jump more than 40 per cent, from $414 million to $588 million, in the 2008-09 fiscal year, based on current spot prices and hedging profiles.
Under the same conditions, Virgin Blue is also expected significantly slash its loss from $34 million to $8 million.
“Over the past month, Singapore jet fuel is down 22 per cent and down 15 per cent in Australian dollar terms, with declines in the crude and refining margin both helping,” UBS analysts Simon Mitchell and Ramoun Lazar said in a note, The Australian reported.
“For FY09, Qantas and Virgin are 75-85 per cent hedged at effective WTI crude prices of USD 115 per barrel (the current spot) using mostly options, therefore offering material upside as fuel drops.”
While the Australian dollar has fallen around US10c over the last two months, the analysts said the airlines would be partly protected from the fall as they had about 60 per cent of their US dollar requirements covered in the US85-95c range.
The US dollar exchange rate was a critical factor for carriers’ performance, since the currency is used to buy fuel, aircraft and spare parts.
However, the analysts said both airlines still faced cost problems, with the spot fuel prices remaining around 40 per cent higher than the last financial year average.
The two companies are expected to announce their annual results next week.
Qantas has stated in its last guidance that the company’s pre-tax profit for the year would be 40 per cent above the 2006-07 result of $1 billion.
25 used Toyota forklifts & reach trucks are up for auction at GraysOnline. The late model forklifts include over 15 petrol & LPG 2.5T, 3T & 3.5T. Included in the auction are 5 reach trucks, 2 four wheel electric forklifts an order picker & electric pallet
more»
Skyline Development, Auditing and Training specialises in consulting, training and regulatory compliance audits for Regulated Air Cargo Agents (RACA).
more»
Australasian
Freight Logistics
Freight and transport logistics is the
next frontier in the drive towards supply chain efficiency...
MHD
Supply Chain Solutions
Has been the industry leader for more
than 30 years. It is the reference guide for professionals
striving for effective end-to-end supply chain management...
Diesel
A bi-monthly magazine that has shaken up
the Australian road transport magazine sector with sharp news
stories and bold feature articles on the diverse character
of the Australian trucking market...