Qantas bounces back with $367 million profit

I've always expected that we would not hear any announcements on 787s or fleet generally, on new routes or even new lounges, simply as a smart PR strategy so that Qantas could ensure full focus on the positive results. There's only a limited amount of coverage Qantas can get so why pull focus away from the Good Numbers with those announcements, when they can later roll out each of those out later on their own and get a stack of publicity on each measure.

Quote from Fairfax site:

'Mr Joyce said the airline was in talks with employees about conditions for  working on the 787s so that the aircraft would bring in the right returns.'

That'd be an arm wrestle with the union over staffing levels on a new plane. You'd think that would be one of the last stages in the process of ordering aircraft.

I'd say an announcement is imminent.

Good observation. You wouldn't float prospective aircraft acquisitions to the union rep to hear their ideal on having a 50% staff : 50% passenger split!

I can hear next weeks headlines "and after announcing a $367m pre-tax profit last week, Qantas have unveiled the new state of the art aircraft that will soon be taking to our skies."

While I enjoyed the airfare war prices, Qantas was cutting it's own profit arteries while trying to see VA mortally wounded (and it was ultimately pointless because VA had deep pockets behind it). That would have been OK had it not caused a drop in soft product due to penny pinching in order to cope with the loss in profit). 

I'd rather Qantas have fares it can make a profit on, and see those profits invested in hard and soft product like it has done with A330 refurb (which you'll note only started to roll out after the cheapie fares were gone).

Those deep discount fares, which Australia hadn't seen before, were great but unsustainable.

Helped that Qantas stopped hedging as much as it used to on fuel price. It was well placed for the rapid decline in fuel prices. Other airlines, which used a lot of fuel hedging, took a nasty bath.

Lower fuel prices only contributed a small part. Major contributing factors according to Alan Joyce were: 'transformation program', $374 million in benefits; $208 million from reduced depreciation;$162 million from increased revenue per available seat kilometre; $59 million from the removal of the carbon tax; and $33 million from lower fuel prices.

Sadly no Oroton PJ case, but it was a day flight, so fair enough.

I liked the new seat on the latest A330-300 config, a few minor things I'd like to improve but nothing major. The seat is a bit firmer than Skybed Mark II but the mattress pad took care of that. It's a major improvement on the Skybed Mark II (unless you want to romatically gaze into your partner's eyes all flight lol).

Service/soft product was a bit lower than normal (which may just be adjustment issue), but no major faults either. I'd wish the excellent service team you frequently get on SYD-CGK (and vice versa) was the Qantas benchmark though (those guys are the biz!).

Can recommend the Qantas A330-300 latest product to others.

I don't know anyone who has ever bought an airline stock for the dividends.. 

hmmm...'nearly 10yrs'?? the last dividend was paid in MARCH 2009 (i'm staring at my dividend statement right now!!)...hardly 'nearly 10yrs'

personally, I'm happy to wait for a few more healthy PROFIT statements/earnings from QF, before they start giving dividends again.

just to clarify...recorded in MARCH 2009...paid in APRIL 2009

While dividends are great for shareholders it comes at the cost of starving companies of their own investment funds (capital they can pull down on). For some industries, where innovation needs are low, this is fine. However, airlines are constantly one-upping each other to attract business, and thus innovation needs are high. If anything, Qantas has sometimes put itself on the back-foot by giving priority to dividend payments in the past.

Remember, dividend yield chasing is predominantly an Australian craze. In markets such as the U.S. or the UK, the focus is on share price growth. Apple, etc offer little dividend yield but anyone would bought into them in the past is very happy today, and Apple benefits from constant reinvestment of its own profits back into product development to further its market penetration. There is almost no multipler effect on dividend payment for businesses - it just inflates their share price marginally.

if someones 'standard of living'/'wealth' relies on a guaranteed income from stocks, (especially if that company is also posting losses, or just emerging from losses), then I think they seriously need to re-evaluate their priorities...dividends are a great ADDITION to my income, when they happen..but I dont expect one EVERY period to maintain my standard of living

Sorry forgot about Virgin Australia & Rex paying dividends

The share price of Qantas has roughly tripled since last May. Capital growth is one reason. 

At a young age, with a modets protfolio, I look for growth that I can realise. Dividends aren't significant on my holdings.

I seriously doubt we'll see any more A380s; my money would be on a 'big twin' like the 777X or A350-1000.

I agree David, I think Qantas is wary of the A380 as it always requires high capacity markets. Any downturn and you end up flying a lot of empty seats.

Qantas will never go Emirates style, they'd prefer to schedule more services if necessary than fly half empty planes (much like CX). That's why Qantas is only flying the A380 on high demand routes and high seasonal services.

Once Qantas upgrades it's A330-300s to the latest configuration, that downgrade becomes an upgrade. I certainly think the latest J cabin hard product on the A330-300 will satisfy everyone - it's lightyears ahead of the 747 (latest and last config).

But there's no PE - that's a sticking point for some.

True, but being a somewhat smaller a/c running Asia-Pacific routes, something had to give. I can understand Qantas favouring PE for UK/North America/Middle East long haul routes and high season demand services, where they know people will fill any PE allocation.

If Qantas' PE wasn't class leading, there probably wouldn't be anywhere near the current levels of demand for it in the Asia-Pacific zone.