Qantas Swings To Full-Year Profit

Qantas has posted a $975 million pre-tax profit for the 2014-2015 financial year this morning, representing a $1.6 billion turnaround from just one year ago.

The airline’s 10.8 million member loyalty program, Qantas Loyalty – a stand-alone business that provides services to the airline as well as to external companies – recorded an underlying earnings before interests and taxes (EBIT) of AU$315 million, up 10 percent year-on-year.

In addition, Qantas said it will acquire eight Boeing 787-9 aircraft, to be delivered from calendar year 2017, and will gradually replace five older Boeing 747 aircraft.

“If it wasn’t for our transformation programme, Qantas wouldn’t be saying a profit right now, nor would we be saying a return to shareholderes, nor would we be saying the acquisition of the 787s”, Chief Executive Officer Alan Joyce informed reporters.

The airline attributed it to improved revenues and better use of aircraft, adding capacity to Los Angeles, Dallas, Vancouver, San Francisco, Santiago, Tokyo and Singapore.

The division reported underlying earnings of $267m for the year, up from a $497m loss a year ago.

Qantas has not declared a dividend but will return $505 million to shareholders through a 23 cent per share cash distribution. “Without that transformation, we would not be reporting this strong profit, recommencing shareholder return”.

The transformation program is designed to cut 5,000 jobs and save $2 billion in costs.

Last year, the country’s national airline took a loss of $646 million, but made grand plans to focus on the enhancement of efficiency through the employment of new technology across all of its business sectors.

Qantas shares were down seven cents to $3.69 as of 1341 AEST.

Qantas group CEO Alan Joyce says Jetstar will not open new ventures until it is satisfied with the profitability of the three Asia based franchises in Singapore, Vietnam and Japan but sees a strong future for the brand.

“We are halfway through the biggest and fastest transformation in our history,” Mr Joyce said.

“Qantas this year with these results will make more than Virgin, Air New Zealand, Singapore Airlines and Etihad put together and that’s the first time in our history that we’ve achieved that”, he says. It last paid a dividend in 2009.

This week Qantas further reduced its debt burden by selling its Terminal 3 lease at Sydney Airport for $535 million and the airline’s coffers have also benefited from the removal of the carbon tax which contributed $120 million.