News
Bumper first half profits at Air New Zealand and Qantas
February 26th 2016
Air New Zealand (Air NZ) and Qantas Airways have done it again. After posting record full year 2014-2015 net profits last summer, both carriers this week announced sharp profit hikes for their fiscal first halves, to December 31. Read More »
On Tuesday, Qantas announced a net profit of A$688 million ($498 million), compared with A$206 million a year earlier, its highest first half earnings. "This record result reflects a stronger, leaner, more agile Qantas," said Qantas Group CEO, Alan Joyce. "I'm extremely proud of our people, who are working hard to transform the Qantas Group and make flying with Qantas and Jetstar better than ever for our customers."
The Qantas Group’s domestic, international and Jetstar units all saw significant gains during the first-half, helped primarily by a 7% reduction in unit costs, mainly due to the lower oil price, Revenues were up 5%.
Joyce said the progress of the carrier’s three-year turnaround plan was a major factor in the improved results. Qantas has realized A$1.4 billion in cumulative savings since 2014, Joyce said. The group has completed or identified 4,500 of the 5,000 layoffs that were targeted. However, Qantas is also hiring in other areas, including a new campaign to add 170 B787-9 pilots to the airline group before the aircraft is scheduled to enter service in late 2017.
Overall, Qantas Group capacity is expected to increase 5% for the full fiscal year, to June 30. For the second fiscal half, Qantas’ international capacity is forecast to expand by 9%, with Jetstar increasing its international seats by 12%. Overall domestic capacity is projected to grow 2%.
The group expects to take delivery of the first of 99 on-order A320neos from the end of 2017. The aircraft are ostensibly destined for Jetstar, as older A320s are paid off, and to support growth, but they also could replace older B737-800s in the mainline Qantas fleet. CFO Tino La Spina said the group’s fleet plan offered "ultimate flexibility", with a decision on short-haul deployment not expected until shortly before the neos arrive, subject to market conditions. Qantas plans to roll out Wi-Fi across its domestic A330/B737 fleet from early 2017.
Across the Tasman, Air NZ on Thursday reported a net profit of NZ$338 million ($226 million) for the first half to December 31, up an impressive $205 million from its NZ$133 million profit in the corresponding year-ago half.
The airline grew its operating revenues by 12%, to NZ$2.7 billion, during the period, with passenger revenues up 16% and yields down 1% on 16% increased ASKs. Capacity is expected to grow another 7% in the fiscal second half and 8%-10% in the next full fiscal year.
Air NZ chief, Christopher Luxon, said the carrier’s new routes to Buenos Aires and Houston are exceeding expectations. Going forward, Luxon projected a full-year pre-tax profit of NZ$800 million for the airline.
