Qantas H1 pre-tax profit down 52% on industrial action

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The Qantas Group has posted a 52% decline in its profits before tax to Australian dollars (A$) 202 million ($216 million) in the first half of 2011/12.

The result reflects the A$194 million impact of industrial action against the airline in the six months ended 30 December 2011 and increased fuel costs compared with the corresponding period a year earlier. Total fuel costs in the first half were at A$2.2 billion, up by 26%.

Qantas Airways' underlying earnings before interest and tax (EBIT) in the first half was at A$66 million, compared with A$165 million in the corresponding period a year earlier. Qantas subsidiary Jetstar's underlying EBIT was at A$147 million.

The Qantas Frequent Flyer programme generated an underlying EBIT of A$119 million, while its freight operations generated A$38 million.

The group's revenue rose by 6% year on year to A$8.04 billion in the first half, driven by continued growth in both yield and capacity.

Its operating expenses for the first half amounted to A$4.63 billion, up by 3% year on year. Fuel costs increased by 26%, driven by significant increases in market prices.

Its net passenger revenue increased by 4% and capacity rose by 5% following the expansion of the group's fleet to 301 aircraft as at 31 December 2011 from 266 aircraft as at 31 December 2010. This reflects the continued growth in the group's strong Qantas domestic franchise and the ongoing expansion of Jetstar both domestically and internationally.

"While the impact of the [industrial action] was severe, our portfolio of businesses once again demonstrated its resilience in difficult conditions," said Qantas CEO Alan Joyce.

"Improvements in operating cash flow, revenue, yield and unit costs, and record results for Jetstar and Qantas Frequent Flyer helped offset the financial effect on the group," Joyce added.

The group's operating cash flows grew to A$823 billion in the first half, up by 5% from the prior corresponding period. Qantas Group's cash was A$3.34 billion on 31 December 2011, down by A$154 million on 30 June 2011.