Qantas half year profits slip by 25%
Qantas has unveiled its half year results to December 2016, posting an underlying profit before tax of $852 million, after taking out costs for things like operation restructures and redundancies.
But the profits, which work out to be $515 million after tax, show a dip of 25 per cent, while revenue was down by 3.3 per cent to $8.184 billion.
The fall in statutory profit was put down to the fact that the previous half year’s profit included $201 million from the sale of Qantas’ Sydney Airport terminal.
Qantas also claimed net passenger revenue lost $243 million compared to the previous period, landing at just over $7 billion.
In terms of operations, both domestic and international, they too fell, with earnings before tax and interest down $16 million to $371 million for domestic, and down $62 million to $208 million for international.
It comes off the back of a number of innovations from Qantas, including its Facebook Messenger bot, in-flight streaming of Netflix and Spotify, and the airline getting rid of pesky window shutters.
Despite the dip in profits, Joyce was adamant Qantas is one of the best performing airline groups in the world.
“Our transformation program has built a strong, sustainable business that generates returns throughout the economic cycle,” Joyce said.
“Qantas and Jetstar’s domestic operations produced an outstanding result and Qantas Loyalty continued to thrive. It’s a combination that keeps delivering and sets us apart from our competitors.
But, as Joyce admitted, the “international market is tough”, due to capacity growth and lower fares, which he said Qantas International is not immune to.
“Not surprisingly, [Qantas International’s] profit is down on last year’s record levels.
“But the work we’ve done on removing costs and making the business more efficient means Qantas International is outperforming its peers in the region.
“Our focus is to stay disciplined on capacity, keep downward pressure on costs, and introduce game-changing improvements like the Dreamliner and high-speed Wi-Fi.
“This result is a credit to the hard work and dedication of our people, who have helped deliver high levels of customer satisfaction right across Qantas, Jetstar and Loyalty.”
The Jetstar Group overall reported another strong half year profit, helped by solid domestic performance, while its international operations benefited from growing demand between Australia and destinations like Indonesia and Thailand.
“Starting next financial year, we’ll be targeting an annual average of $400 million in cost and revenue benefits to make sure we have a sustainable business for the long term,” Joyce added.
“Internationally, the market will remain challenging – but we expect the revenue trend we saw in the first half to moderate.
“We’re focused on continuous improvement, driving cost and revenue benefits from new technology and efficient operations, and making sure that we hold and strengthen our competitive position in the market.
“Put it all together, and it’s clear that our strategy to build a balanced and resilient portfolio is on track.”
The arrival of Qantas International’s first two Boeing 787-9 Dreamliner aircraft in late calendar 2017 will enable the retirement of Qantas’ two oldest 747s by mid-2018. A total of five 747s will be retired as eight Dreamliners enter the fleet.
Today Qantas also revealed the premium economy seats in the new Dreamliners,
Wider and with more functional space overall, the new seat has a unique recline motion that provides a class-leading level of comfort. When the rear of the seat reclines, several sections shift to support your body as you move into a more relaxing position.
“The Qantas Dreamliner will by flying some of the longest routes in the world, including non-stop from Perth to London, so we’ve focused on making each cabin the most comfortable in its class,” said Joyce.
“Our Business Suite has been dubbed ‘mini First Class’ by some of our Frequent Flyers and our Economy seat for the Dreamliner has features that some reserve for Premium Economy.
“This new Premium Economy seat has serious wow factor. You have to experience how well it supports you when you recline to realise it’s completely different from anything else in its class.”
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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