Qantas figures dip but upbeat

QANTAS chief Alan Joyce says the Flying Kangaroo is in world beating form and withstanding an onslaught of international competition spawned by lower fuel prices far better than its rivals.

The bullish comments were delivered as net profit at the nation’s biggest airline plunged 25 per cent to $515 million for the six months to December compared with the same period a year earlier.

The hit to the bottom line came as Qantas absorbed $137 million in fresh restructuring costs and saw profits crimped in its international arm where lower oil prices have prompted carriers to add new flights, pushing fares down.

The domestic business also continues to be affected by the changing nature of the mining boom with revenue from passengers working for resource companies falling by $50 million.

Mr Joyce said Qantas had held up better than any of its key rivals, having made more money than Air New Zealand, Singapore Airlines, Etihad Airways, Virgin and Cathay Pacific combined.

“Everybody in the region is having bigger drops, 50 per cent to 80 per cent drops, in their profitability,” he said.

“The structure of our business and what we’ve done in transformation has given us that big advantage.”

Underlying profit, which strips out one-offs, was 7.5 per cent lower at $852 million, comfortably ahead of market expectations.

Rival Virgin last week swung to a $21.5 million firsthalf loss – down from a $52.5 million profit in the prior period – as it absorbed restructuring costs.

Profit in Qantas’ key domestic arm slid 4 per cent to $371 million while profit in the international division dropped 23 per cent to $208 million.

Bucking the trend, Jetstar posted a 5 per cent profit rise to $275 million and loyalty program earnings rose 3 per cent to $181 million.

Mr Joyce said an ongoing restructure program had delivered $212 million in cost savings and efficiency gains over the half, taking total savings to $1.9 billion since it was launched three years ago.

Qantas declared an interim dividend of 7¢.

Shares in Qantas closed 5.3 per cent higher at $3.74, their biggest one-day gain in more than a year.