A Slow Revolution

Amid the myriad of detail and interesting items to come out of Qantas’s annual profit results (announced on August 19) was one standout fact – for the first time, low cost subsidiary Jetstar made a larger profit than Qantas’s mainline operations did.

In fact, in a year when IATA predicts world airlines will lose US$9 billion, Jetstar’s profit result – underlying EBIT (earnings before interest and tax) of $107 million and an 18 per cent leap in profit before tax to $137 million – was stellar. Almost no other airlines in the world have recorded profit, traffic and revenue growth in the past 12-18 months, and Jetstar’s profitability stands in marked contrast to Qantas mainline (international, domestic and QantasLink) flying, with its underlying EBIT of just $4 million. This is a paltry result given it came from revenues of just under $12 billion, while Jetstar’s profits came from revenues of ‘just’ $1. 85 billion.