Qantas looks to be flying high once again, with the airline chalking up a $367 million pre-tax profit over the July-December 2014 period.
The numbers represent a dramatic recovery from the same period one year ago, when Qantas reported a $252 million loss, which by August 2014 had become a $646 million sinkhole for the full 2013-2014 financial year.
Lower fuel costs contributed $33 million to the half-year haul, although Qantas says the bulk of the gains were driven by first fruits of the wide-reaching ‘transformation’ project designed to strip out $2 billion in costs by 2018.
This alone is tagged as delivering a $374 million benefit towards the bottom line.
Also helping the Red Roo turn back a rising tide of red ink are higher passengers numbers and revenue following a cease-fire in the 'capacity war' between Qantas and Virgin Australia.
Qantas Group CEO Alan Joyce welcomed the figures, saying "Our people have worked hard and made a huge contribution to bring about the change we need. They deserve great credit for this result."
"The decisive factor in our best half-year result for four years was our complete focus on the Qantas Transformation program," Joyce added.
"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."
The Qantas Frequent Flyer scheme tipped another record contribution into the kitty with $160 million pretax profit, representing a 10% growth. The program now boasts a total membership of 10.5 million.
For the latest information for business travellers and frequent flyers, follow @AusBT on Twitter.
Virgin Australia - Velocity Rewards
19 Mar 2014
Total posts 567
Finally Alan can Rejoyce!
12 Feb 2015
Total posts 89
A welcome return to profit. I have to say though that the increase in Qantas domestic and international airfare pricing has been noticeable over the last six+ months. Also, worth observing that there is no fleet announcement re turning 787 options into orders, which some people had expected.
24 Oct 2010
Total posts 2563
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.
Virgin Australia - Velocity Rewards
19 Mar 2014
Total posts 567
12 Feb 2014
Total posts 229
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.
Virgin Australia - Velocity Rewards
19 Mar 2014
Total posts 567
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."
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
02 Jan 2013
Total posts 140
I think low jet fuel prices would have a bit to do with it as well.
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
12 Feb 2015
Total posts 89
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.
Qantas - Qantas Frequent Flyer
20 Mar 2014
Total posts 132
this is such great news! Well done qantas team!
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
Seems it's a red letter day all round - Qantas not only turned a profit but they also upgraded my aircraft for my upcoming SIN flight to a refurbed A330-300 (sweet!). If I get a limited edition Oroton PJ case to boot, the gods certainly are in a happy mood.
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
Virgin Australia - Velocity Rewards
06 Aug 2014
Total posts 20
Mr Joyce, the GOLDEN RULE for any company that is profitable includes dividends to shareholders!!!! Appears the profits that you proclaim to have made are only on paper. Why no dividends for nearly 10 yrs???
17 Feb 2012
Total posts 121
I don't know anyone who has ever bought an airline stock for the dividends..
28 Oct 2011
Total posts 645
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.
28 Oct 2011
Total posts 645
just to clarify...recorded in MARCH 2009...paid in APRIL 2009
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
Virgin Australia - Velocity Rewards
06 Aug 2014
Total posts 20
Most airline stocks pay dividends. Why would you contemplate investing for no returns?
28 Oct 2011
Total posts 645
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
17 Feb 2012
Total posts 121
Sorry forgot about Virgin Australia & Rex paying dividends
Virgin Australia - Velocity Rewards
19 Mar 2014
Total posts 567
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.
Virgin Australia - Velocity Rewards
06 Aug 2014
Total posts 20
Takes a very keen person to want to wait for dividends! I only have blue chip stocks like Wesfarmers, CBA, Westpac etc that return regular dividends. No waiting, & notified well before the payments made.
Virgin Australia - Velocity Rewards
06 Aug 2014
Total posts 20
I don't solely rely on my dividends. I have commercial real estate, cash holdings as well. I agree that the majority of investors alone can't survive off just dividends
QFF
12 Apr 2013
Total posts 1563
It really looks like fuel is main expense.
04 Aug 2014
Total posts 35
Hopefully we can soon see Alan Joyce annoucing the firm order of those mighty 787-9.
does anyone think they'll take further delivery of defered 380s? I hope they do, I love being on those spacious 380.
24 Oct 2010
Total posts 2563
I seriously doubt we'll see any more A380s; my money would be on a 'big twin' like the 777X or A350-1000.
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
Qantas - Qantas Frequent Flyer
29 Jun 2013
Total posts 366
Great news go Qantas !!
Cathay Pacific - Asia Miles
01 Feb 2015
Total posts 111
What great news!!!!! congrats to all the team at QF for being the WORLDS BEST AIRLINE :)))))
02 Sep 2013
Total posts 11
I think its has partly to do with downgrading certin routes (eg syd-sin, syd-bkk and so on) from B747 to A330...... and also with other aspect like removal of carbon tax
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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).
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2199
But there's no PE - that's a sticking point for some.
Qantas - Qantas Frequent Flyer
10 Jan 2013
Total posts 698
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.
Virgin Australia - Velocity Rewards
06 Aug 2014
Total posts 20
Just adding to my previous posts. Qantas still has JUNK STATUS credit rating, & this can remain with their current credit file for up to 10 yrs for a corporation, so although they claim to be going back to profit, at this stage it's probably only paper profits. The JUNK STATUS remains against them even if all outstanding debts are paid. Credit & default reporting/listing rules don't change for companies or corporations. They effectively are the same laws as applied to anyone else.
Qantas - Qantas Frequent Flyer
21 Aug 2014
Total posts 501
What the hell happened in a year?
Yeah the cost-cutting and all that stuff helped. but $374 million, like how? I know a lot happened behind the public eye but just how, just how. How did people start magically start flying QF again. I still don't get it. But great job Qantas deliver this for 2015 and VA will be out of coal, I kinda don't hope so but still.
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