Close sidebar

Qantas expects to more than double first half underlying profit before tax in 2015/16 first half

written by australianaviation.com.au | December 15, 2015
AIRBUS A380 QANTAS SYD SEP11 RF IMG_5680
A Qantas A380 at Sydney. (Rob Finlayson)

Qantas expects to more than double its underlying profit before tax in the first half of 2015/16 as the airline group benefits from lower fuel prices, its cost reduction program and improved revenue.

The company has forecast underlying profit before tax, the airline’s preferred measure of financial performance, to be between $875 million and $925 million for the six months to December 31 2015.

Qantas reported underlying profit before tax of $367 million in the first half of 2014/15.

Advertisement
Advertisement

“We’ve seen improved revenue in our domestic and international operations, reduced costs across the group through the Qantas Transformation program, and expect another record half-year result from Qantas Loyalty,” Qantas chief executive Alan Joyce said in a statement on Tuesday.

“This strong performance is underpinned by our continued focus on delivering the best service for our customers in all of the markets we serve.”

On a negative note, Qantas said there would be a $25 million one-off impact due to the disruptions caused to Jetstar’s Bali operations from the two volcanic ash cloud events in August and November, while there would also be a $17 million “non-cash negative impact of bond rate movements on employee provisions”.

Meanwhile, Qantas said it was continuing to adjust its domestic network with capacity being taken out of east-west and intra-Western Australia routes, while adding extra seats and more flights on east coast markets.

PROMOTED CONTENT

Qantas’s domestic operations, including QantasLink, carried 1.9 million passengers in November, up 1.9 per cent from the prior corresponding period. Capacity, measured by available seat kilometres (ASK), inched up 0.2 per cent.

Domestic passengers were also up at Jetstar, rising 4.8 per cent to 1.1 million in November, while ASKs rose 2.4 per cent. Load factors on the low-cost carrier improved 1.4 percentage points to 85.8 per cent.

“Group domestic revenue per available seat kilometre (RASK) increased compared to the prior corresponding period, reflecting improved performance at both Jetstar Domestic and Qantas Domestic,” Qantas said.

Qantas’s international network grew ASKs by nine per cent in November, as extra flights to Asia kicked in.

In other Qantas news, the airline said on Tuesday members of its frequent flyer program would continue to earn points from the Woolworths Rewards program after the two parties entered into a new three-year agreement. The supermarket chain had previously announced its partnership with Qantas would end on December 31 2015.

Sign up to our digital magazine before 30 June and receive a FREE print edition. Starting at just $99.95 a year, you will get the latest news and insights direct to you, including Australia’s most popular print magazine since 1977. Subscribe now at australianaviation.com.au.

11 Comments

  • Christopher Campbell

    says:

    More 787s ordered in February?

  • Bill

    says:

    More 787’s please Alan, and maybe a 777X or two in the future

  • Angus T

    says:

    Wow, Alan is on a roll.
    Maybe more 787s options/purchase rights will be exercised in February and maybe some announcements over a potential 737-800/a380 replacement will be announced?

  • Marc

    says:

    With plummeting oil prices, every airline CEO looks like a winner.

  • Dane

    says:

    Just wait until the Saudis slow down oil production rates. Then everyone will be calling for Joyce’s head again!

  • Craigy

    says:

    oil prices aren’t plummeting they are stable. I note that an analyst has said that the reduced oil prices are only part of the picture but the cost base reductions and increased fleet utilisation are the main reasons for Qantas’ performance. For a company that was apparently begging for a Commonwealth Govt guarantee on its debt 2 years ago, this is a great result

  • Fonga

    says:

    Everyone except John Borghetti, Marc. If it was all due to the drop in oil prices then why is Virgin not hitting a $900 million half year profit result? Last I heard they were struggling to break even.
    Bring on the new planes, Alan. You’ve got this bird singing.

  • Marcel

    says:

    @Craigy

    USD100/barrel late 2013 to USD35/barrel late 2015 is plummeting.

  • Marc

    says:

    @Fonga

    Fuel makes up about 30% of an airlines operating base.

  • John

    says:

    I agree with Fonga comment about ‘John Borghetti and Virgin. How can Qantas share price go up substantially, Qantas reports a large profit, Qantas does a return of money to shareholders and Virgin cannot do similar,.

  • James from Sydney

    says:

    If I go back two years, I would see comments in forums vilifying Alan Joyce with talk of the airline being run to the ground. Fuel prices aside, he has made changes that has made the airline profitable and more importantly (for it’s future) more competitive. Whilst I understand the average person not seeing this back then, I’m concerned about certain senators who have publicly bashed AJ and his team, people who should know better.

Leave a Comment

Your email address will not be published. Required fields are marked *

Each day, our subscribers are more informed with the right information.

SIGN UP to the Australian Aviation magazine for high-quality news and features for just $99.95 per year