Aviation

Joyce says plan “paid off” as Qantas posts $1.4bn profit

Hannah Edensor

Qantas Group’s CEO Alan Joyce said his plan “well-and-truly paid off” as the carrier posted an underlying profit before tax (PBT) of $1.401 billion.

The airline also recorded a statutory PBT of $1,181 billion for the 12 months ended 30 June 2017, making this year’s results the second highest in Qantas’ 97 year history.

The results are, however, down 8.6 per cent on last year’s underlying results, but still came in slightly above the guidance range provided earlier this year.

Joyce said it was a sign that its three-year transformation program had done wonders for the airline’s pocket.

“Three years ago, we started an ambitious turnaround program to make the Qantas Group strong and profitable,” Joyce said.

“We tackled some difficult structural issues, became a lot more efficient and kept improving customer service.

“Today’s announcements show this plan has well-and-truly paid off. It’s delivered $3.5 billion in cumulative underlying profit, record customer satisfaction and the opportunity for Qantas to grow.”

Joyce was pleased with all aspects of the Qantas Group.

In the domestic market, Qantas and Jetstar combined reached a record $865 million Underlying earnings before tax and interest, making them again the two most profitable airlines in Australia with around 90 per cent of the total domestic profit pool.

Qantas International, which has seen high levels of capacity growth, saw an improvement of conditions in the second half of 2017’s financial year.

It posted underlying earnings before interest and tax of $237 million, while Qantas Loyalty booked a record $369 million earnings, with revenue up four per cent.

Another $470 million in transformation benefits were delivered, completing the three year program and outperforming the $2 billion target by $125 million.

“We operate in a very competitive environment, so continuous improvement is crucial,” Joyce added.

“Being more efficient is part of our culture and we’re now targeting an average of $400 million in gross benefits a year.”

From upping its inflight Wi-Fi game, to announcing lounge investments, a Perth-London route and even cabin upgrades, Joyce said, “We have a plan to keep delivering sustainable returns well into the future”.

“Our people remain central to our success, and that is why it is so pleasing that we are able to grant another bonus to around 25,000 non-executive employees to mark the successful completion of the turnaround program,” Joyce added.

Non-executive Qantas Group employees will receive a bonus of $2,500 (or $2,000 for part time). This will apply to approximately 25,000 people ranging from pilots to cabin crew, engineers, ground staff and office workers.

Looking forward, Qantas predicts its capacity will increase by around three per cent in the first half of 2018 financial year.

SEE WHAT PEOPLE ARE SAYING

  • sting

    ….joyce… i was so right about you… i knew your program would work… none of your myopic industry colleagues who criticised you when qantas was in turmoil saw this coming… am quite sure they’re now trying to copy you… 2nd rates do that , you know… and to all union leaders who tried to make it harder for joyce -i told you so…

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