Addendum
Good times roll on for Qantas Group
March 1st 2018
The Qantas Group has reported a strong interim pre-tax profit of US$761.7 million for the six months to December 31, 2017. Read More » Only its international arm turned in a pre-tax profit decline of 5.5%, to $173.3 million.
Despite higher fuel costs, a competitive domestic market and international capacity overkill, “Qantas Domestic had a record result, the Jetstar Group had a record result and Qantas Loyalty had a record result”, said Qantas Group CEO, Alan Joyce, at the results announcement in Sydney. Qantas International held its own in a market that is producing some extremely low air fares, Joyce added.
“We met, or exceeded, all the targets of our financial framework. Debt is towards the bottom of our target range. Every division is returning more than its cost of capital. We generated a record amount of operating cash flow and free cash flow was almost three times higher than the previous first half,” he said.
Joyce said the international arm has reported a good result given higher fuel costs and increased competitor capacity in the market. This is “an important transition year” for Qantas International, he said, and forecast it was setting up for a bright future.
“The airline is welcoming the Dreamliner [into its fleet] and making key changes to its network, including hubbing through Singapore and Perth,” he said.
“It is taking some routes from Emirates on the Tasman and starting the unique Perth-London service, which will be the first non-stop direct link between Australia and the UK. These changes will generate material benefits from fiscal year 2019 and the early signs are very positive.”
The international operations of low-cost carrier, Jetstar, generated strong earnings, helped by the favourable operating costs of the B787-8, although the LCC lost an estimated $10 million from the disruption caused by the Bali ash cloud in the closing months of 2017.
Jetstar’s portfolio of joint venture airlines in Asia was profitable, driven by its operations in Japan and Singapore as well as significantly improved results at Jetstar Pacific as excess capacity in Vietnam moderated.
Looking ahead, Joyce said the airline is broadly positive about trading conditions and the prospects for consumer demand. “After several years of turning around this business, Qantas has a lot of momentum behind it. Consistent financial performance gives us the headroom to plan for the future. We’re vigilant about maintaining that performance and we are excited about what is ahead,’’ he said.
