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Qantas A380 upgrade plan follows handsome profit

August 29, 2017 Headline News 1 Comment Email Email

When Qantas reported the second-best financial result in its history on Friday, it also revealed details of its A380 cabin upgrade program – and it announced something else very special for those who work for the airline.

Qantas will distribute a generous bonus to reward staff after it posted an underlying profit before tax of AUD 1401 million and a statutory profit before tax of AUD 1181 million for the 12 months ended 30 June 2017.  Net profit fell by just over 17% to AUD 852 million after passenger revenue dipped 1% amid challenging conditions internationally.

The pattern mirrored that of Air New Zealand, which posted its second-best-ever annual result last week – and its best ever result a year earlier. The NZ carrier also awarded a staff bonus.

Qantas will pay non-executive Qantas group employees a bonus of AUD 2500 (or AUD 2000 for part time). This will apply to approximately 25,000 people ranging from pilots to cabin crew, engineers, ground staff and office workers.

Qantas A380 Upper Deck lounge

Qantas also announced details of the major cabin upgrade it has been planning for its fleet of 12 Airbus A380s. A multi-million dollar upgrade will see a change in the seat mix on the A380s to improve passenger comfort on long-haul flights and “to meet increased customer demand for premium cabins on flights to the US, Europe and Asia”.

Structural changes are focused on the upper deck where 30 economy seats will be removed and some partitions and a crew workstation rearranged. This allows for an additional six business class and 25 premium economy seats, increasing the overall seat count on the aircraft by one and increasing premium seating by 27%.

Other key elements of the A380 refurbishment program include:

  • Replacing business class Skybeds with the latest version of Qantas’ business suites. Every seat gives direct aisle access and allows better use of cabin space compared with the Skybed.
  • Installing the airline’s new premium economy seat in a 2-3-2 configuration. This seat is almost 10% wider than the model it replaces and will debut on the Dreamliner later this year.
  • Reconfiguring the front of the A380’s upper deck to redesign the passenger lounge to provide more room for first and business class customers to dine and relax.
  • Enhancing first class, which remains in its current configuration on the lower deck. Each suite will be fully refurbished, including contoured cushioning and a larger, higher resolution entertainment screen.
  • Updating Economy with new seat cushions and improved inflight entertainment.

The 2017 financial result confirms Qantas and Jetstar as the two most profitable airlines in Australia with around 90% of the total domestic profit pool.

Qantas International, which has faced high levels of capacity growth in the broader market, saw an improvement of conditions in the second half. It posted underlying earnings before interest and taxes (EBIT) of AUD 327 million. Continued strength in its core markets helped the Jetstar Group deliver the second highest profit in its 13 years of operation.

Qantas Loyalty booked a record AUD 369 million underlying EBIT on a 4% increase in revenue as it continued to diversify its earnings.

Chief executive Alan Joyce said the result marked completion of the Qantas turnaround plan that had repositioned the airline as one of the most profitable airline groups in the world.

“Three years ago, we started an ambitious turnaround program to make the Qantas Group strong and profitable. We tackled some difficult structural issues, became a lot more efficient and kept improving customer service.

“Today’s announcements show this plan has well-and-truly paid off. It’s delivered AUD 3.5 billion in cumulative underlying profit, record customer satisfaction and the opportunity for Qantas to grow.

“We operate in a very competitive environment, so continuous improvement is crucial. Being more efficient is part of our culture and we’re now targeting an average of AUD 400 million in gross benefits a year.”

Edited by Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    Non-executive staff will get a $2500 bonus. How much will executive staff get? You’ll need to add quite a few zeros on to reach their bonus mark. As for sprucing up the A380’s, this is a necessity as their Business product is well below other airlines and below even their own A330 cabins. But before you do the A380’s Mr Joyce, please can you upgrade the two remaining A330-200’s that still fly with ancient angle-flat beds, commonly known as skyslopes? These are an embarrassment for QF

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