Shares in Qantas surged to their highest level in more than six years after it said the global drop in oil prices would help cut its fuel bill by A$550 million ($593 million) this year.
The airline's stock jumped 7.2 per cent to close at A$3.56 yesterday, the highest level since September 2008, after Qantas said it would spend less on fuel this year amid a 36 per cent drop in jet fuel prices.
Cheaper fuel will leave more money to invest elsewhere in the business. With an average fleet age of 7.2 years, Qantas can afford to wait before buying new planes and instead may save finance costs by buying back plane leases, chief financial officer Tino La Spina told an investor conference yesterday.
"Getting the fleet within eight to 10 years is fine, it's still very competitive by global standards," he said. "We have cash on our balance sheet at the moment which we would consider excess to requirements."
Qantas' fuel bill could be as low as A$3.92 billion this year and A$3.87 billion in 2016, the company said. In a worst-case scenario, it would be as high as A$3.95 billion this year and next, the company said. Two out of three hurdles to buying new planes are nearly cleared, La Spina said.
