Qantas back in the black

Qantas back in the black
By admin


Qantas has reported a full year net profit of $6 million, a significant improvement on the $244m loss the previous year.

Underlying pre-tax profits climbed 102% to $192m while revenue hit $15.9 billion, a rise of 1.1%

Chief executive Alan Joyce said the result was achieved in a challenging market of excess domestic capacity, intense international competition and high fuel costs.

Jetstar, Qantas domestic and the airline's loyalty business were all profitable while losses in Qantas International halved to $246m.

However,  Jetstar's underlying earnings of $138m represented a 32% decline year on year as fierce domestic competition and start-up costs of Jetstar Japan and Jetstar Hong Kong impacted the bottom line. Qantas Domestic also saw underlying earnings decrease by 21% to $365 million.

A more positive performance came from Qantas Loyalty which reported underlying earnings of $260m, up 13% –  a record result for the frequent flyer scheme. Membership has now reached 9.4 million, with an average 2,000 new members each day. Qantas is targeting 10 million members in FY14.

The scheme yesterday launched its new "Swiss Army knife" of frequent flyer cards, reporting strong interest in the multi-functional offering.

"Around 500,000 people registered for the card in advance, which is a great endorsement of the product," Joyce said.

Meanwhile, the group maintained its "profit-maximising" 65% share of the domestic market through Qantas Domestic and Jetstar which Joyce hailed as an important achievement, yielding combined domestic earnings of over $450 million.

'As a group, we are in a strong position. We have Australia's best airlines and best loyalty business," he said.

But he admitted that trading conditions will remain challenging, as the weakening Australian dollar translates into higher fuel costs in the short term.

"At current market rates, we expect underlying fuel costs to be $160 million higher in the first half than in the prior period," he said.

In addition, the global outlook continues to be mixed, creating an element of uncertainty for the airline as it continues to progress with its turnaround strategy.

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