Qantas reports after tax profit of $111m

Qantas reports after tax profit of $111m
By admin

Qantas has reported an after tax profit of $111 million in the first six months of the financial year, up 164% on the corresponding period last year despite "challenging conditions" in the international and domestic markets.

Its international operation continued to suffer with an underlying earnings before interest and tax loss of $91m. But it was a vast improvement on the $262m deficit in the first half of 2011/12.

Qantas chief executive Alan Joyce said the turnaround plan for its flagship business was "well advanced".

"The 65% improvement in Qantas International's underlying EBIT is testament to the steps taken to remove cost from the business, from closing down loss-making routes to retiring aircraft and consolidating operations," he said.

Qantas Domestic reported an underlying EBIT of $218m, down sharply from $328m in the first half of 11/12.

Capacity hikes from competitors seeking to take market share has put pressure on yields for all airlines, Joyce said.

But he claimed Qantas remained the "airline of choice" for business travellers with the airline holding 84% of the corporate market.

"During the first half we renewed 40 accounts and won 39 new accounts, including four won back from the competition," he said.

Jetstar meanwhile turned in an underlying EBIT of $128m, down from $147m. The reduction was blamed on competition in the domestic market and start up costs of Jetstar Japan and Jetstar Hong Kong.

Qantas Loyalty division reported a record underlying EBIT of $137m, up from $119m.

Underlying group pre-tax profits climbed 10% to $223m.

Turning to the outlook, Joyce said the second half of the year remains "challenging and volatile".

Meanwhile, Qantas said it will upgrade its entire fleet of Airbus A330s from late 2014 to include lie flat beds in business class.

It will also acquire five Boeing 737-800 aircraft for domestic flights with deliveries from 2014.


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