Qantas Airways announced an additional share buyback plan of up to A$400 million ($271.36 million) on Thursday, even as the Australian flag carrier reported a 16% decline in annual profit due to rising fuel costs and fare normalisation.

Rising fuel prices and a return to normal travel capacity have led to lower fares, as passengers search for more budget-friendly travel options.

Qantas expects its fuel costs in the first half of fiscal 2025 to be in line with the year-ago level at A$2.7 billion ($1.83 billion), although finance costs and expenses associated with entry into service are expected to trickle higher.

“Group International unit revenue is expected to fall 7%-10% over the same period as market capacity continues to restore. However, this rate of decline is expected to slow in FY25,” Qantas said in a statement.

The carrier predicted a return to positive unit revenue by the fourth quarter of fiscal 2025, compared to the previous year.

The airline’s underlying profit before tax fell 16% to A$2.08 billion in the year ended June 30, in line with a Visible Alpha consensus of A$2.08 billion.

On a statutory basis, profit after tax attributable declined 28.1% to A$1.25 billion.

Overall, earnings fell due to fare normalisation, increased investments in customer-focused promotions, and lower freight income, particularly in the first six months of the year.

The airline is attempting to woo customers with promotions and improved in-flight facilities, after a series of controversies regarding travel bookings and employee treatment damaged its reputation among investors and public.

Qantas did not declare a final dividend for the fifth straight financial year.

However, the company announced an additional A$400 million share buyback programme to distribute excess capital, citing the fulfillment of all criteria within its financial framework.