Qantas Airways Ltd. is dealing with crude oil quite well after the price of the commodity more than doubled in the past two years, Chief Executive Officer Alan Joyce said.

“The way our hedging works — it typically puts a cap on our fuel expenditure and allows us to participate if fuel was to fall,” Joyce said in a Bloomberg Television interview Monday in Singapore. “And that’s actually helped us to be quite competitive. We are coping quite well with fuel at the moment.”

The airline reports first-half results on Feb. 22 and has said profit may rise as much as 12 percent. Underlying profit before tax will be between A$900 million and A$950 million ($712 million to $752 million) in the six months ended Dec. 31, the carrier said in October. That compares with A$852 million in the same period a year ago.

Joyce is plowing capacity into Asia, the fastest-growing travel market in the world, partly to tap a flood of Chinese tourists into Australia. He’s also rerouting the airline’s classic Kangaroo Route to London through Singapore instead of the Middle East. Qantas is preparing to start the first direct service between Australia and Europe when it flies a Boeing Co. Dreamliner from Perth to London in March. That’s a flight of about 17 hours.

Joyce Challenge

Joyce, who led Qantas on a three-year turnaround after axing routes, jobs and costs, has also challenged Boeing and Airbus SE to make a plane that will allow Qantas to fly from Sydney to London or New York without stopping. Joyce calls it “Project Sunrise”.

Qantas, which is looking to replace its Boeing 747 aircraft at some stage, is buying eight Boeing 787-9 Dreamliners, partly to fly direct to Europe, and has options and purchase rights for a further 45. The company has said it will start to decide this year whether to convert those rights.

“We are just taking delivery of the aircraft this year so we really want to see the case working and business case performing the way we expected to,” Joyce said separately. “Once we’re comfortable with that, then we will put the order in for further aircraft to replace the 747s.”

–With assistance from Karolina Miziolek

©2018 Bloomberg L.P.

This article was written by Angus Whitley, Kyunghee Park and Juliette Saly from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: Qantas is preparing to start the first direct service between Australia and Europe when it flies a Boeing Co. Dreamliner from Perth to London in March 2018. Qantas