Qantas makes a mega $3.3 billion turnaround
Qantas is making a comeback so strong not even the Spice Girls could compete.
Pulling out its biggest profit since before the GFC, the airline has racked up a $505 million capital return to shareholders, with a mega Boeing Dreamliner order cranking things up even further.
For the 12 months to June 30 2915, Qantas reported an Underlying Profit Before Tax of $975 million and a Statutory Profit Before Tax of $789 million. In laymen’s terms, that’s good money.
The underlying result is a turnaround of $1.6 billion compared with financial year 2014, including Qantas’ best ever second half performance, with all segments of the Qantas Group reporting stellar profits and returning their cost of capital.
And behind it all was the Qantas Transformation program, which unearthed $894 million in transformation benefits, and meeting its target of paying down more than $1 billion in net debt.
Chief executive Alan Joyce said the milestone acquisition of the next-generation Dreamliner for Qantas International marked the scale of Qantas’ turnaround and signalled a new phase of renewal and growth.
“We are halfway through the biggest and fastest transformation in our history,” Joyce said.
“Without that transformation, we would not be reporting this strong profit, recommencing shareholder returns, or announcing our ultra-efficient Dreamliner fleet for Qantas International. “
“We have reshaped our business for a strong, sustainable future – and because we moved quickly and made tough decisions early, we have strong foundations to build on.”
Qantas is also going on a spending spree, ordering eight Boeing 787-9 aircraft, to be delivered from calendar year 2017 and gradually replace five older Boeing 747s.
“New aircraft types have always unlocked opportunities for Qantas,” Joyce added.
“When our red tail Dreamliners start arriving in two years’ time, their incredible range and fuel-efficiency will create new possibilities for our network.”
“For customers, the Qantas Dreamliner’s improved cabin pressure, larger windows and technology to reduce turbulence will deliver the world’s best travel experience.”
The $2 billion Qantas Transformation program was announced in December 2013, seemingly playing a major role in the massive turnaround for the national carrier.
Other factors that had a positive impact on Qantas’ performance in financial year 2015 were lower fuel prices, depreciation savings from the Qantas International fleet impairment, higher revenue per available seat kilometre (excluding foreign exchange), and the repeal of the carbon tax.
“Every segment is now making a healthy profit, with returns exceeding the cost of capital, including record results for Jetstar, Qantas Loyalty and Qantas Freight,” Joyce added.
“This has combined to deliver the best first half result in four years and the best second half result in the company’s history.”
The international business for the airline continues to pursue growth opportunities through increased aircraft utilisation, with capacity increases implemented or announced in markets including Los Angeles, Dallas, Vancouver, San Francisco, Santiago, Tokyo and Singapore, and plans to expand partnerships with American Airlines and China Eastern.
Qantas International also received record customer satisfaction ratings in financial year 2015.
The Jetstar Group reported record Underlying EBIT of $230 million, up from a loss of $116 million in financial year 2014, driven by strong performances in the Australian domestic and Australian international market. Jetstar International achieved a record profit as it introduced more B787-8s into its fleet.
Jetstar’s New Zealand business was also profitable and all the Jetstar-branded airlines in Asia improved their performance compared with financial year 2014, with losses halved.
“This transformation has been all about getting our foundations right,” Joyce said.
“Being smarter with our costs; faster with our decisions; more productive with our assets. And on these stronger foundations, we can build a much stronger Qantas.”
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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…. alan joyce was right all along in his direction for qantas… and i knew he could pull it off that’s why i regularly defended his stance /well, in comments sections like this, at least/ against the senator/you know who/, that blogger/who thinks he knows everything, I won’t even mention his name and of course the unions… don’t get me wrong, I’m not against the workers… I’m just trying to tell them to be more realistic.. it’s better to save some jobs than to lose all jobs… just believe in the guy… joyce is a genius… worth millions of dollars pay…