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Qantas Profit Plunge  
User currently offlineSlats From Australia, joined Jan 2009, 31 posts, RR: 0
Posted (4 years 8 months 1 day 7 hours ago) and read 3202 times:

http://www.theaustralian.news.com.au...ory/0,28124,25951445-36418,00.html


QANTAS Airways posted a worse-than-expected 88 per cent fall in net profit today and warned the outlook remained volatile.

Australia’s largest airline by revenue and passengers carried couldn't say if it expected to remain profitable this financial year given global economic conditions.

But the carrier plans to cut costs by $1.5 billion over the next three years, starting with a target of $500 million this financial year.


slats
19 replies: All unread, jump to last
 
User currently offlineDanfearn77 From United Kingdom, joined Jul 2008, 1807 posts, RR: 9
Reply 1, posted (4 years 8 months 1 day 7 hours ago) and read 3166 times:

Wow. They are heavy falls but a profit is a profit.


Eagles may soar high, but weasels dont get sucked into jet engines!
User currently offlineMickster From Austria, joined Feb 2009, 171 posts, RR: 0
Reply 2, posted (4 years 8 months 1 day 3 hours ago) and read 2994 times:
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A detailed one by Bloomberg as well:

Quote:

Qantas to Cut Costs by A$1.5 Billion to Counter Slump

Aug. 19 (Bloomberg) -- Qantas Airways Ltd., Australia’s biggest airline, will embark on a A$1.5 billion ($1.24 billion) cost-cutting program after its first loss in six years.

Shares of the Sydney-based carrier rose to a nine-month high after Chief Executive Officer Alan Joyce, 43, said he will deploy more fuel-efficient aircraft and change flight schedules as part of the three-year plan in response to a 8.7 percent drop in passenger revenue.

Qantas “is hostage to the global environment,” said Sean Fenton, who helps manage $324 million at Tribeca Investment Partners in Sydney. “Targeting costs is all they can do right now when the demand conditions are still pretty weak.”

Qantas joins premium-class rivals Singapore Airlines Ltd. and Cathay Pacific Airways Ltd. in slashing expenses to manage the biggest drop in overseas travel since 2003’s SARS outbreak. Singapore Air, the world’s second-largest carrier by market value, may post its first loss in 24 years on falling sales and Hong Kong-based Cathay is considering ripping out some premium- class seats as demand plunges.

Qantas rose 9 cents, or 3.5 percent, to A$2.69 at the 4:10 p.m. close of trading in Sydney, their highest level since Nov. 11. The stock has gained 2.3 percent this year, compared with an 18 percent rise in the benchmark S&P/ASX 200 index.

‘Okay Result’

Premium air travel in June fell 21.3 percent from year-ago levels, less than May’s 23.6 percent drop, as carriers slashed prices to fill seats, according to the International Air Transport Association.

For the second half ended June 30, Qantas had a loss of A$93 million, compared with net income of A$351 million a year earlier. The Sydney-based company reported full-year profit of A$117 million today.

“The next fiscal year will probably be just as tough, with no profits in the absence of further cost cutting,” said William Seddon, an analyst who helps manage $250 million with White Funds Management in Sydney. “They’ve done well to deliver an okay result.”

Qantas shares have risen 17 percent since Joyce, the former head of its Jetstar discount carrier, succeeded Geoff Dixon in November and stepped up efforts to reduce costs.

Direct Routes

The carrier expects to curb costs and fuel use by flying more direct routes and cutting the time airplanes take to taxi from the gate to the runway, Joyce said in an interview today in Sydney. Among other steps to reduce expenses and streamline services, the carrier will consider introducing passenger check- in via text messaging.

“We don’t see an impact on what we deliver to the customer, in fact we are going to invest in more lounges and new aircraft types,” Joyce said.

Qantas carried 7.2 million passengers overseas in the past year, 11 percent less than a year earlier. Revenue per passenger fell 8 percent.

The second-half loss was the company’s first since 2003. It’s only the second time the carrier has been unprofitable for a six month period since first selling shares in 1995.

Annual passenger revenue fell to A$11.6 billion. Freight sales dropped 20 percent to A$764 million.

“Cutting prices and maintaining service quality are important, but for that high-yielding business segment to recover, that really needs economic growth to drive demand,” Fenton said.

Travel Slump

Asia-Pacific international travel demand fell in 12 of the past 14 months, according to IATA, as the spread of swine flu exacerbated a decline in passengers.

Qantas offered two-for-one business-class fares on some international routes to lure passengers after airlines such as Malaysian Airline System Bhd. and Cathay won premium customers through similar offers. Qantas also cut return fares from Sydney to Los Angeles to less than A$1,000, a third of last year’s price.

The airline’s namesake carrier, its biggest unit, posted full-year earnings before interest and tax of A$4 million compared with A$1.358 billion a year earlier.

The company’s fuel bill fell 2.7 percent to A$3.6 billion as the global recession cut prices.

Jet kerosene prices have fallen by more than 40 percent in the past 12 months and stood at $76.75 a barrel yesterday in Singapore, according to Bloomberg data. They touched a record $181.85 in July 2008.

Qantas has 80 percent of its expected 2010 fuel costs hedged at a worst case price of $89 a barrel, it said today.

Jetstar had a 4.9 percent rise in earnings to A$107 million as budget-conscious passengers switched from its full-service carrier.

Earnings at Qantas’s frequent flyer program rose 77 percent to A$226 million. An initial share sale of the unit is “off the agenda,” Joyce told reporters on a conference call today.

Qantas has more than 65 percent of Australia’s domestic air-travel market, compared with about 30 percent for second- ranked Virgin Blue Holdings Ltd.

Last Updated: August 19, 2009 02:44 EDT



User currently offlineSlats From Australia, joined Jan 2009, 31 posts, RR: 0
Reply 3, posted (4 years 8 months 11 hours ago) and read 2767 times:

There are a lot of positives - a profit is a profit.


slats
User currently offlineTruemanQLD From Australia, joined Feb 2007, 1464 posts, RR: 0
Reply 4, posted (4 years 8 months 11 hours ago) and read 2757 times:

Well considering that is better than 9/10 other airlines, QF should be happy. $111 mill or whatever it was is a big profit, one that most US airlines would die to have.

User currently offlineANstar From United Kingdom, joined Nov 2003, 5080 posts, RR: 6
Reply 5, posted (4 years 8 months 10 hours ago) and read 2690 times:



Quoting Slats (Reply 3):

There are a lot of positives - a profit is a profit.

Actually if you look at the numbers whislt it is a profit for the 12 months.... in the H2 Jan-Jun this year they made a loss of AUD$93M

http://www.reuters.com/article/rbssI...tilitiesNews/idUSSYD35234020090819

Only the 2nd half yearly loss posted since 1995.

But as others have said... not bad considering the global scene. Looks like QFF and JQ proped up the figures too.


User currently offlineSlats From Australia, joined Jan 2009, 31 posts, RR: 0
Reply 6, posted (4 years 8 months 9 hours ago) and read 2567 times:

JQ had a great year.


slats
User currently offlineLufthansa From Christmas Island, joined May 1999, 3196 posts, RR: 10
Reply 7, posted (4 years 8 months 8 hours ago) and read 2549 times:



Quoting Slats (Reply 6):
JQ had a great year.

So watch for the Irish Midget to expand more of the JQ brand and trash more of the QF brand.


User currently offlineTravelhound From Australia, joined May 2008, 824 posts, RR: 12
Reply 8, posted (4 years 8 months 8 hours ago) and read 2512 times:

Interesting that they still generated positive cash flow from operations of $1.1 billion.

If I was losing money that's the way I would like to do it!


User currently offlineSlats From Australia, joined Jan 2009, 31 posts, RR: 0
Reply 9, posted (4 years 8 months 8 hours ago) and read 2491 times:



Quoting Lufthansa (Reply 7):

Yeah I think that's the way it will go.



slats
User currently onlineDavidByrne From New Zealand, joined Sep 2007, 1610 posts, RR: 2
Reply 10, posted (4 years 8 months 7 hours ago) and read 2447 times:



Quoting Mickster (Reply 2):
The carrier expects to curb costs and fuel use by flying more direct routes

What routes might become "more direct"? Any thoughts?



This is not my beautiful house . . . This is not my beautiful wife
User currently onlineStitch From United States of America, joined Jul 2005, 29654 posts, RR: 84
Reply 11, posted (4 years 8 months 3 hours ago) and read 2357 times:
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Quoting Slats (Reply 6):
JQ had a great year.

Which is why the QF Group is launching significant new services from SIN using JQ and adding four new A330-200IGWs via lease to start new services to southern Europe originally planned for the 787-8 (and now tasked to eventually be served with 787-9s).


User currently offlineHuaiwei From Singapore, joined Oct 2008, 1099 posts, RR: 2
Reply 12, posted (4 years 8 months 1 hour ago) and read 2314 times:



Quoting Stitch (Reply 11):
Which is why the QF Group is launching significant new services from SIN using JQ

Never heard of this. They have already decided?



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently onlineStitch From United States of America, joined Jul 2005, 29654 posts, RR: 84
Reply 13, posted (4 years 8 months 1 hour ago) and read 2307 times:
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Quoting Huaiwei (Reply 12):
Never heard of this. They have already decided?

Yup. From what I am hearing they are looking to increase daily frequencies at SIN by up to 46%, including at least one new service to mainland China.


User currently offlineJbernie From Australia, joined Jan 2007, 880 posts, RR: 0
Reply 14, posted (4 years 8 months 1 hour ago) and read 2287 times:



Quoting DavidByrne (Reply 10):
What routes might become "more direct"? Any thoughts?

More to the point... what one/two stop routes are inefficent routings? Maybe some long hauls that have a stop while in Australia before flying out? Most of the flights once they leave Australia seem pretty legit with their need for stops. The only one that springs to mind might be the MEL-AKL-LAX route.. but there was talk in the current Aust. thread about them doing 737s over to AKL and then 747 up to LAX or something similar.


User currently offlineNA From Germany, joined Dec 1999, 10358 posts, RR: 11
Reply 15, posted (4 years 8 months 1 hour ago) and read 2259 times:

Anyone making a profit this year, even a small one, should call themselves lucky.

User currently onlineDavidByrne From New Zealand, joined Sep 2007, 1610 posts, RR: 2
Reply 16, posted (4 years 7 months 4 weeks 1 day 23 hours ago) and read 2207 times:



Quoting Jbernie (Reply 14):
Quoting DavidByrne (Reply 10):
What routes might become "more direct"? Any thoughts?

More to the point... what one/two stop routes are inefficent routings? Maybe some long hauls that have a stop while in Australia before flying out? Most of the flights once they leave Australia seem pretty legit with their need for stops. The only one that springs to mind might be the MEL-AKL-LAX route.. but there was talk in the current Aust. thread about them doing 737s over to AKL and then 747 up to LAX or something similar.

This has already happened - northbound the flight is now effectively only AKL-LAX as the 734 leg from MEL is an 0600 departure, hardly likely to attract MEL pax, and the return flight from LAX-AKL involves a layover at AKL of 5h 30m, also hardly designed to attract MEL pax.

Aside from one-stop services to Europe, there are not that many one-stop services in the network at all - let alone many that could be made "more direct". I'm still struggling to understand what they really mean.



This is not my beautiful house . . . This is not my beautiful wife
User currently offlineGemuser From Australia, joined Nov 2003, 5551 posts, RR: 6
Reply 17, posted (4 years 7 months 4 weeks 1 day 21 hours ago) and read 2129 times:



Quoting DavidByrne (Reply 16):
Aside from one-stop services to Europe, there are not that many one-stop services in the network at all - let alone many that could be made "more direct". I'm still struggling to understand what they really mean.

I don't think they mean "more direct" in terms of stops enroute, but rather a "more direct" airways or GPS path between two stops. I dont remember the details but their was quite a bit attentions paid to this some years ago about QF doing it on the Pacific route. The word "FANS" comes to mind, that stood for Future Air Navigation System, could that system be what is being talked about?

Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently onlineDavidByrne From New Zealand, joined Sep 2007, 1610 posts, RR: 2
Reply 18, posted (4 years 7 months 4 weeks 1 day 20 hours ago) and read 2079 times:



Quoting Gemuser (Reply 17):
Quoting DavidByrne (Reply 16):
Aside from one-stop services to Europe, there are not that many one-stop services in the network at all - let alone many that could be made "more direct". I'm still struggling to understand what they really mean.

I don't think they mean "more direct" in terms of stops enroute, but rather a "more direct" airways or GPS path between two stops. I dont remember the details but their was quite a bit attentions paid to this some years ago about QF doing it on the Pacific route. The word "FANS" comes to mind, that stood for Future Air Navigation System, could that system be what is being talked about?

OK, that makes sense. Thanks.



This is not my beautiful house . . . This is not my beautiful wife
User currently offlineHuaiwei From Singapore, joined Oct 2008, 1099 posts, RR: 2
Reply 19, posted (4 years 7 months 4 weeks 1 day 4 hours ago) and read 1884 times:



Quoting Stitch (Reply 13):
Yup. From what I am hearing they are looking to increase daily frequencies at SIN by up to 46%, including at least one new service to mainland China.

That's what I read too, but the growth seems to be for Jetstar Asia, whereas the Aussie-Europe flights are to be handled by Jetstar itself? I tried and can't find any source indicating that a decision has been made to transit via SIN.

If it is indeed SIN, I would herald the introduction of long-haul LCC here, and I am pretty excited! Big grin



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
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