Qantas back to black

Qantas has hit the ground running with a $367 million underlying profit before tax, marking the airline’s best first-half performance since 2010.

The half yearly report, announced this morning, represents an improvement of $619 million compared to the same period last year.

Statutory profit after tax came in at $206 million for the six months to December 31 2014, with the Group drawing in a revenue increase of 2.1% to $8.1 billion overall.

The major factors boosting Qantas’ performance include the $374 million in Qantas Transformation program benefits, $208 million of reduced depreciation, $162 million of increased revenue per available seat kilometre, $59 million thanks to the removal of the carbon tax, and $33 million saved due to lower fuel prices.

The Group is now powering towards a target of $675 million of transofmration benefits in the 2015 financial year, jumping up from its previous target of $600 million.

Combined with the $204 million in benefits in the 2014 financial year, these results are seeing a total benefit of at least $875 million by June 30 this year.

All operating segments of the Qantas Group were profitable in the first half, with Qantas International hitting profits for the first time since the GFC, pulling an underlying EBIT of $59 million – a turnaround of $321 million.

The business is now on track to achieve its target of a return to profit in the financial year of 2015, a goal they announced in 2011.

In the domestic market, Qantas and Jetstar reported combined Underlying EBIT of close to $300 million, with Qantas CEO Alan Joyce saying the results showed the Group was executing the right plan with discipline and speed.

“The decisive factor in our best half-year result for four years was our complete focus on the Qantas Transformation program,” Joyce said.

“It’s clear that without the impact of transformation, we would not be announcing a profit today.

“What sets this transformation apart is that we are reducing costs permanently while at the same time delivering Qantas’ best ever fleet, product and service.

“We are meeting or exceeding all our targets as we build a sustainable future for Qantas with an emphasis on growing long-term shareholder value.

“Our financial position is significantly stronger because of the actions we’ve taken, and we are giving Qantas a solid foundation for growth in earnings.”

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