Qantas shareholders are smiling after the airline yesterday revealed the dramatic extent of its turnaround. It is heading for a record full year profit, only two years after its biggest ever loss.
The airline expects to more than double first-half pre-tax profit to between AUD 875 million and AUD 925 million when it announces its six-month results in February. That’s close to the AUD 975 million it made in the whole of the 2015 financial year.
It attributed the strong first half performance to the continued delivery of the AUD 2 billion Qantas Transformation program, revenue growth, “and the benefit from lower fuel prices which has been secured through the group’s disciplined hedging program”.
Qantas Group chief executive Alan Joyce said the anticipated first half result reflected strong performances from each of Qantas’ core businesses.
“We’ve seen improved revenue in our domestic and international operations, reduced costs across the Group through the Qantas Transformation program, and expect another record half-year result from Qantas Loyalty.
“This strong performance is underpinned by our continued focus on delivering the best service for our customers in all of the markets we serve.”
The first half of the financial year is typically stronger for Qantas because it includes Christmas travel. The second half includes the holiday months of January and February, customarily a lean period for business travel.
Even allowing for the seasonal variation, however, analysts expect Qantas to report pre-tax profit of about AUD 1.6 billion, comfortably beating its 2008 record of AUD 1.41 billion, SBS reported.
That puts it firmly in line to obliterate last year’s AUD 557 million net profit and trump the all-time record AUD 970 million net profit it reported in 2008.
QANTAS TURNAROUND IN A NUTSHELL
- Expected FY16 pre-tax profit: about AUD 1.6 billion
- FY15 pre-tax profit: AUD 975 million
- FY14 pre-tax loss: AUD 646 million
- Record full year pre-tax profit: AUD 1.41 billion in 2008
- Record first half pre-tax profit: AUD 905 million in 2008
Written by : Peter Needham