Group CEO Alan Joyce said the record result showed Qantas’ ability to keep delivering.
“After several years of consistent performance, we now have a lot of momentum behind us. We’re vigilant about maintaining that momentum and we’re confident about the future it allows us to build. Today’s result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route. Our lounges, Frequent Flyer program and initiatives like free WiFi all drive customer satisfaction, and so does the network strength across Qantas and Jetstar.
“We’re seeing continued capacity discipline in the domestic market, coupled with a product advantage that’s delivering a significant profit share to the Group. This is a transition year for Qantas International and it’s setting up a bright future. We have the Dreamliner joining the fleet and important network changes on flights to Europe and across the Tasman, which will unlock significant benefits from FY19. For international to largely hold its own ahead of those benefits flowing through, and in the face of rising fuel costs and market capacity, shows its resilience.
“Qantas Loyalty performed very well with the Frequent Flyer program at its core, but it’s also opening up fresh revenue growth by expanding directly into areas like financial services and health insurance.
“We operate in very competitive markets right across the Group, and we’re focused on continuous improvement. This result includes $181 million in benefits from ongoing transformation as part of an average annual target of $400 million. Ultimately, that discipline is key to our ability to keep delivering for our customers, shareholders and people.”
Financial result highlights:
- Revenue: AUD8660 million (USD6747 million), +5.8% year-on-year;
- Qantas Domestic: AUD3070 million (USD2392 million), +5.3%;
- Qantas International: AUD3439 million (USD2679 million), +7.3%;
- Jetstar Group: AUD1936 million (USD1508 million), +4.1%;
- Qantas Loyalty: AUD763 million (USD594.4 million), +2.7%;
- Total costs: AUD7597 million (USD5919 million), +5.0%;
- Labour: AUD2141 million (USD1668 million), +5.6%;
- Fuel: AUD1547 million (USD1205 million), +3.9%;
- Underlying EBIT: AUD1063 million (USD828.2 million), +12.0%;
- Qantas Domestic: AUD447 million (USD348 million), +20.5%;
- Qantas International: AUD22 million (USD173 million), -5.5%;
- Jetstar Group: AUD318 million (USD248 million), +15.6%;
- Qantas Loyalty: AUD184 million (USD143 million), +1.7%;
- Corporate: (AUD93 million) (USD72.5 million), compared to a loss of AUD88 million in p-c-p;
- Underlying profit after tax: AUD976 million (USD760.4 million), +14.6%;
- Passengers: 28.1 million, +2.8%;
- Passenger load factor: 83.5%, +2.5ppt;
- Revenue per ASK: AUD 8.37 cents (USD 6.5 cents), +3.5%;
- Cost per ASK: AUD 7.11 cents (USD 5.5 cents), +2.0%;
- Cost per ASK excl fuel: AUD 5.12 cents (USD 4.0 cents), +2.2%;
- Total assets: AUD17,900 million (USD13,945 million);
- Cash and cash equivalents: AUD1787 million (USD1392 million);
- Total liabilities: AUD14,147 million (USD11,022 million).
*Based on the average conversion rate at AUD1 = USD0.779069
Key announcements and news highlights:
Qantas to pay H1FY2017/2018 dividend of USD0.0546 per share
Qantas board announced a dividend of AUD0.070 (USD0.0546) per share, with an ex-dividend date of 07-Mar-2018 for shareholders on record as of 08-Mar-2018. The dividend will be paid on 12-Apr-2018.
Qantas: Revenue from regional, non-corporate travellers comprises 5% of total domestic revenue
Qantas reported revenue from non-corporate passengers on regional routes made up 5% of the Qantas Group's total domestic network revenue.
Qantas Group announces plans for pilot academy capable of training 500 students p/a
Qantas announced it will establish the 'Qantas Group Pilot Academy', and expects to open the facility during 2019. The academy will initially train around 100 pilots p/a for direct entry into the Qantas Group, including Jetstar and QantasLink. Depending on demand from other parts of the aviation industry, this could grow to 500 pilots p/a on a fee-for-service basis. Qantas stated the academy is likely to be established near an existing airfield in regional Australia to provide easy access to uncongested airspace. The carrier will make an initial investment of up to AUD20 million (USD15.6 million) to establish the new facility. Qantas Group CEO Alan Joyce said the academy would become a critical part of the national carrier's long term talent pipeline as the forecast level of pilot demand "makes the academy important not just for Qantas but for Australian aviation more broadly so that all parts of the industry have access to qualified pilots in a country that relies so heavily on air transport". In establishing the academy, Qantas will partner with one of several existing training providers. It will also engage with Australian federal, state and territory governments to discuss possible locations.
Qantas to completely renovate Sydney Airport International Business Lounge
Qantas announced its 'International Business Lounge' at Sydney Airport will undergo a "multimillion dollar" rebuild, offering a completely new design, at least 30% more seating and a new dining experience. The creative concept of the lounge will be developed by David Caon in collaboration with Australian architecture firm Bates Smart. Qantas Group CEO Alan Joyce said the lounge investment demonstrated the airline's commitment to "world class customer service and leading design". Construction is scheduled to start in 3Q2018 and will be completed in stages to allow ongoing lounge access, targeting completion at the end of 2019.
QantasLink to refurbish interiors of 45 aircraft turboprop fleet
QantasLink announced it will overhaul the interiors of its fleet of 45 turboprop aircraft, with new ergonomic seat cushioning, leather upholstery, a refreshed colour palette and new floor coverings. Work on the carrier's Bombardier Q200, Q300 and Q400 aircraft will be conducted at QantasLink's MRO facilities, including at Tamworth Airport, the airline's hub for regional aircraft MRO. The upgrade programme will commence by Jun-2018 and is expected to be completed within 18 months. Each aircraft will take approximately three days to refresh. The work will be timed to coincide with scheduled MRO and will closely align the turboprop interiors with the QantasLink jet fleet.