Qantas Transformation the key to success

Qantas’ $367 million underlying profit before tax is largely due to its transformation program, according to Qantas CEO Alan Joyce.

The program alone delivered $374 million in benefits in the first half of the 2015 financial year, with results released this morning, with Joyce saying “without the impact of transformation, “Qantas would not be profitable today.”

When the Qantas Transformation program was launched, the Group made a commitment to disciplined investment in aircraft, lounges, technology and service, in a bid to keep a clear brand premium over the competition.

Recent initiatives in this scheme for customers included the opening of new premium lounges in Los Angeles, the launch of Qantas’ new A330 product (with lie-flat beds in business), and a revitalised food and beverage service for economy passengers.

The Group also saw the staged introduction of automatic SMS check-in for domestic passengers, along with expanded inflight entertainment.

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

“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.”

Qantas continues to be a national favourite, being recognised in the Roy Morgan Customer Satisfaction Awards as both Domestic Airline of the Year and Domestic Business Airline of the Year.

The airline was also awarded Best Airline in Australia in TripAdvisor’s Traveller’s Choice Awards, Best Airline in Australia/Pacific by Skytrax World Airline Awards, and Safest Airline, Best Lounges, Best Domestic Airline and Best Catering accolades at the Airline Ratings Awards.

Jetstar’s brand remains among the strongest in the LCC sector, having been named best low-cost carrier in Australia and Singapore, and jumping in the top five low-cost carrier globally in the World Airline Awards.

Customer satisfaction for Qantas Domestic hit record levels in the December quarter, reflecting ongoing investment in aircraft, lounges, product and training, including the introduction of the new A330 product for core east-west and east coast routes.

Qantas Loyalty saw a continued confidence in the brand too, recording an underlying EBIT of $160 million, up 10% on the previous corresponding period.

The Qantas Frequent Flyer program added over 400,000 new members to total 10.5 million, while activations of the Qantas Cash travel money and membership card were up 27% from the second half of the 2014 financial year.

“Continued innovation and investment in programs like the online mall, Aquire, and Qantas Cash card, have helped grow, diversify and maximise the customer base,” Joyce said.

“They have brought in a younger demographic, with 60 per cent of new members aged 36 or younger.”

Joyce also added that transformation has been central to the airline’s recovery, and will continue to be a key focus for the Group.

“It is about making ourselves strong and resilient through the ups and downs of economic cycles,” he said.

“Over the next two years we will further strengthen the Qantas position. We will be a company able to withstand tough times, capitalise on the good times, and deliver sustainable and attractive long term returns to our shareholders.

“We will always be the airline that represents the best of the Australian way of life. And today we can see a bright future for this great Australian company.”

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