The Qantas Group achieved record levels of revenue for the first quarter of FY19, up 6.3 per cent compared with the same period last year.Group Unit Revenue (RASK)3 for the quarter increased by 5.4 per cent compared to the prior corresponding
period, substantially offsetting higher fuel costs.
The strong revenue performance also helped partially offset a rise in non-fuel costs, such as higher commissions paid to travel agents on the higher revenue and the impact of a weaker Australian dollar.

Total Group capacity was down by 0.3 per cent, with decreases in both the international and domestic market.

Unit Revenue across Group Domestic operations (Qantas and Jetstar) increased by 6.8 per cent. Travel demand remained strong across business and leisure markets, and the resources sector continued to improve.

Unit Revenue across Group International5
rose by 4.0 per cent. Structural changes to Qantas’ international network continued to support revenue growth, including the Perth-London route, renewed codeshare agreements and traffic flows associated with refocusing on the Singapore hub.

Qantas International retired another 747-400 in September, with the remaining nine to be steadily phased out
by the end of calendar 2020. Two additional 787-9s will be delivered in November 2018, taking its total Dreamliner fleet to eight.

The Qantas Group affirms its existing outlook for capital expenditure, transformation benefits and depreciation.

The Group has now hedged 76 per cent of its fuel for FY19 and 39 per cent for FY20 with the ability to benefit
from significant price falls. Based on a Jet Fuel forward market price of A$130 per barrel for the remainder of financial year 2019, the Group’s full year fuel cost is now expected to be $4.09 billion6 compared with $3.23
billion for financial year 2018.

The value of forward bookings at 30 September is up 8 per cent7 , which represents a further improvement on
the 6.2 per cent increase at 30 June. As a result, the Group still expects to substantially recover increased fuel
costs in FY19.

Group capacity for the first half of FY19 is now expected to be flat, with Group Domestic capacity expected to
fall by approximately 0-1 per cent and Group International capacity to be flat.

The Group is on track to deliver at least $400 million in transformation benefits in FY19, with the majority of the
cost improvements materialising in the second half.

Qantas has today announced a multi-million dollar investment in a new First Lounge and expansion of its existing
Business Lounge at Singapore Changi Airport.

Combined, this will increase the airline’s lounge capacity at Changi by 60 per cent when complete in late
calendar 2019. The upgrade reflects increased demand for premium travel and the importance of the Singapore
hub to the Group’s broader network. (See separate release.)

As of 23 October 2018, the share buyback of up to $332 million announced in August was 53 per cent complete, with 30,454,244 shares acquired. This takes the total number of shares on issue after cancellation to 1,653,113,636.

Once this latest buyback is finished, Qantas will have bought back an estimated 26 per cent of its stock since October 2015, returning significant value to shareholders.

A fully franked 10 cent base dividend (increased from 7 cents) was paid to shareholders on 10 October, representing a further $168 million return.

Qantas Group CEO Alan Joyce said a combination of positive market conditions and the Group’s strategic advantages was helping it perform well.

“Our record passenger revenue performance for the first quarter meant that we were able to substantially recover higher fuel prices,” said Mr Joyce.

“Market demand for travel remains fundamentally strong and we’re seeing some wind-back of competitor capacity growth.

“When you look across our portfolio, we have a number of factors that help us manage cyclical headwinds impacting the sector. We have a leading position in the domestic market, structural advantages in our international businesses and diversified earnings from Loyalty.

“We have a strong focus on cost and we’re continuing to invest in aspects of customer experience that deliver
a competitive edge and margin benefit. The lounge investment we’ve announced in Singapore is a good
example of that.
“Based on the value of forward bookings and broader market conditions, we’re confident in our ability to
manage higher fuel costs and keep investing, while still delivering strong net free cash flow and long term
shareholder value,” added Mr Joyce.

The first quarter trading update is presented in accordance with new accounting standard AASB 15. For
comparative purposes, the first quarter of financial year 2018 has been restated. This restatement has
adjusted Total Revenue and Ticketed Passenger Revenue used for the calculation of RASK. Some
adjustments are as a result of reclassification between revenue and expenses, so will not impact Underlying