Qan­tas soars to record prof­its

The Myanmar Times - - Business -

AUS­TRALIAN car­rier Qan­tas posted record an­nual prof­its and an­nounced its first pay­out to share­hold­ers in seven years, stag­ing a turn­around af­ter ax­ing jobs and sell­ing air­craft in an ag­gres­sive re­struc­tur­ing.

Qan­tas’ re­sults were also boosted by the sharp fall in global oil prices and a less com­pet­i­tive do­mes­tic mar­ket that has given the firm a sta­ble base of earn­ings.

In con­trast, other in­ter­na­tional air­lines such as Cathay Pa­cific, ANA and Ja­pan Air­lines have seen prof­its plunge amid in­tense com­pe­ti­tion from lower-cost ri­vals and as ter­ror­ism fears eat into de­mand.

Qan­tas re­ported a net an­nual profit of A$1.42 bil­lion (US$1.08 bil­lion) in the year to June 30, an 80 per­cent in­crease.

Un­der­ly­ing profit be­fore tax – Qan­tas’ pre­ferred mea­sure – jumped by 57pc to hit a record A$1.53 bil­lion.

The com­pany re­sumed pay­ing div­i­dends of 7 cents per share, the first pay­out since 2009 and an­nounced a share buy-back of up to A$366 bil­lion. Qan­tas also said it would give A$3000 one-off bonuses to some 25,000 staff who had signed up to a pay freeze.

“Th­ese are fan­tas­tic re­sults that we’ve had in the last year, as I said, record re­sults for the group,” chief ex­ec­u­tive Alan Joyce told re­porters.

“We do see the strong per­for­mance of the com­pany con­tin­u­ing. This busi­ness has taken a lot of cost out and im­proved rev­enue dra­mat­i­cally. The trans­for­ma­tion pro­gram has changed the busi­ness com­pletely, de­liv­er­ing over A$1.66 bil­lion in per­for­mance im­prove­ments. With­out that, we wouldn’t be where we are.”

The ag­gres­sive push to cut some A$2 bil­lion in costs and re­struc­ture the air­line over three years kicked off in early 2014, with thou­sands of jobs axed and dozens of air­craft sold.

Qan­tas said it has since hit A$1.66 bil­lion in cost and rev­enue sav­ings – in­clud­ing A$557 mil­lion in the fi­nan­cial year end­ing June 2016. The car­rier added that it ex­pected to reach A$2.1 bil­lion in cost and rev­enue sav­ings by June next year.

“One of the rea­sons why Qan­tas is look­ing quite com­pelling and is pro­duc­ing very good re­sults is the fact that the do­mes­tic mar­ket has now ba­si­cally shrunk to mostly a du­op­oly be­tween them and Vir­gin,” IG Mar­kets’ an­a­lyst An­gus Ni­chol­son told AFP.

Qan­tas’ do­mes­tic busi­ness re­ported record un­der­ly­ing earn­ings of A$578 mil­lion, a 20pc in­crease from the prior year, while its in­ter­na­tional di­vi­sion posted a 92pc jump in earn­ings to a record A$512 mil­lion.

The air­line’s dis­count car­rier Jets­tar like­wise reached record prof­its, with a 97pc leap in un­der­ly­ing earn­ings to A$452 mil­lion.

“Qan­tas now has this quite com­fort­able steady cash flow com­ing from the do­mes­tic mar­ket that can re­ally fi­nance their ven­tures into the more com­pet­i­tive in­ter­na­tional routes,” Mr Ni­chol­son added.

Mr Joyce said Qan­tas was set to roll out Wi-Fi ac­cess for passengers on its fleets, and would start sell­ing tick­ets for its Dream­liner flights be­fore the end of this year, with routes for the in­com­ing Boe­ing jet com­menc­ing in 2017. –

Photo: EPA

Qan­tas CEO Alan Joyce (right) chats with pi­lots af­ter an­nounc­ing the half-year re­sults in Syd­ney yes­ter­day.

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