Qantas today reported a profit before tax of
$181 million for the full-year ended 30 June 2009, down 87% on the
Qantas Chief Executive Officer, Mr Alan Joyce,
said the diversity of the group's operations had
contributed to it being one of the few airline operators worldwide
to produce a full-year profit, despite the impact of the global
"There has never been a more volatile
and challenging time for the world's aviation industry. When most
airlines are reporting losses, the Qantas Group is reporting a
profit for the full-year," Mr Joyce said. "This has been
due to our strategy built around two strong flying brands in
Qantas and Jetstar, a portfolio of airline-related businesses, and
an ongoing focus on managing costs and driving efficiencies."
Mr Joyce said the 2008/09 financial year was one of two
contrasting halves for the Qantas Group.
"The first half of
the year was characterised by a generally favourable operating
environment and strong demand," he said. "During the second
half, the environment deteriorated, with domestic and
international competitor capacity continuing to grow and demand in
key markets softening quickly as the global slowdown hit.
"This was compounded by one-off events during the year, including
protracted industrial action, H1N1 influenza and the costs
associated with introducing the new
Key drivers of the result were:
- weaker domestic and
international demand, which led to a 4.3% yield decline
and a 1.1% decrease in seat factor (load) to 79.6%
for the group; and
- capacity cuts of 1.9% across the
group, which led to the removal of some variable operating costs
as well as reduced revenue. Jetstar, however, increased capacity
during the year through network growth.
The group also
experienced one-off events during the year which affected the
- industrial action by the Australian Licenced Aircraft Engineers Association, with a resulting
maintenance backlog, which cost an estimated $130 million in
additional expenses and lost revenue;
- the impact on
profitability of the Swine Flu (H1N1)virus, Qantas estimates at $45
- costs associated with the introduction of the
Qantas A380, estimated at $37 million.
items included in the year's result were:
write-downs and provisions of $152 million, which included plans
to ground a number of wide-body aircraft;
- restructuring and
redundancy expenses of $106 million as a result of capacity cuts
and organisational restructuring;
- write-downs of investments
and goodwill of $18 million;
- changes in Frequent Flyer
accounting estimates of $164 million, of which $84 million related
to the non-recurring benefit of the direct earn points conversion
- an $86 million profit on the reverse
acquisition of Jetset Travelworld Group by Qantas Holidays.
Fleet, Product and Service
negotiation of changes to aircraft purchases, as part of our
response to the downturn, has helped preserve cash and will ensure
ongoing investment in these core areas," Mr Joyce said.
remain focused on a long term fleet renewal program and still have
one of the largest order books for new and fuel efficient aircraft
in the world. For example, we have more than 160 new aircraft on
order over the next 10 years that will deliver operational cost
savings and allow our airlines to grow and enter new markets.
"Having adjusted our orders earlier this year, we remain
committed to the
Boeing 787 program and continue to monitor
The Qantas Group will now take
to five A330-200 aircraft, for delivery from November 2010 and to
provide for growth of Jetstar's long haul international operations.
a record year in a deteriorating market environment, delivering
improved profitability while increasing capacity by 14.4%.
"Investment in Jetstar over the next 12 months, and beyond, will
be significant, with an additional seven A320 aircraft to be added
to the Singapore, Australia and New Zealand flying businesses, as
well as four to five additional A330-200 aircraft," Mr Joyce said.
"Jetstar Asia has made a
decision to grow its capacity by 46% for Singapore
services over the next 12 months," he added.
"Jetstar will launch five A320 services a day between Sydney and
Melbourne Tullamarine on 25 October, to enhance profitability and
Group market position, ensuring we are meeting the needs of
different market segments," he said.
Qantas will continue to operate 32 daily
flights between Sydney and Melbourne. Jetstar will also continue
to fly out of Avalon, with four daily flights to Sydney (down from
seven) and multiple flights to Brisbane.
Several new services are also expected
to be launched by Jetstar Asia over
the next week, including the first Chinese mainland route.
A new cost reduction program, the
Qantas Group calls Q
Future, is targetting $1.5 billion in permanent savings over three
years, starting from this year, including $500 million in 2009/10.
"Q Future will focus on Qantas' operations and improving
efficiencies across a range of areas, including sales and
distribution, fuel conservation, aircraft utilisation and
schedule, and procurement," Mr Joyce said. "We are also keeping
a close watch on oil and fuel prices. While well below the record
levels seen in 2008, they remain volatile and are trending
upwards. For 2010, the Qantas Group has hedged 80% of fuel
costs at a worst case price of US$89 per barrel."
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