Qantas reports first full-year loss since privatisation

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Qantas Airways has reported an overall full-year loss after tax of A$244 million ($256 million).

This is the first time the Oneworld carrier has reported a full-year loss since its privatisation in 1995.

Group profits before tax declined by 82.8% to A$95 million. This was a result of a A$194 million loss from industrial action in the year ended 30 June 2012 and an 18% increase in fuel costs to A$4.3 billion.

Revenue rose by 6% year on year to A$15.7 billion in the fiscal year. Operating expenses for the year amounted to A$9.2 billion, a year-on-year increase of 5%. Earnings before interest and tax (EBIT) were down by 59% at A$265 million.

The flagship Qantas premium business swung to a loss before interest and tax of A$21 million from an EBIT of A$228 million the year before. The results were affected by labour strikes, which grounded Qantas operations for several weeks last year, and higher fuel prices.

Qantas says that its international business made a loss of approximately A$450 million before interest and tax, while the Qantas and Jetstar domestic networks together had an EBIT of approximately A$600 million.

The airline will report the results of the international and domestic divisions separately in its next financial results after splitting the two up in a corporate restructuring earlier this year.

Qantas's low-cost subsidiary, Jetstar, reported underlying EBIT profits of A$203 million, up by 20% year on year. Ancillary revenues grew by 27% and unit costs were reduced to record lows, the carrier says.

"Despite challenging operating conditions, Jetstar achieved capacity and passenger growth in all markets," adds Qantas.

Qantas Frequent Flyer, which now has 8.6 million members, reported 14% year-on-year growth in EBIT profits to A$231 million. Billings from the programme's expansion increased by 14% to A$1.2 billion.

Qantas Freight's EBIT profit was A$45 million, down by A$17 million as a result of a downturn in global air freight markets, high fuel prices and the impact of foreign exchange.

During the year, the group acquired 37 owned aircraft, out of which 34 were purchased and three were purchased ex-lease, and leased five aircraft. It retired 14 aircraft.

The group's operating cash flows grew to A$1.8 billion in the fiscal year, an increase of 2% compared with the previous year. Qantas Group's cash decreased by A$98 million to A$3.4 billion for the year ended 30 June 2012.

"Over the course of the year we made significant progress in advancing the Group's strategy - building on our strong domestic business and frequent flyer programme and growing Jetstar across Asia. Qantas's international turnaround plan is on track and set for improvement in 2012/13," says Qantas's chief executive, Alan Joyce.

"Our Boeing 747 reconfiguration programme is nearly complete, with the aircraft receiving outstanding customer feedback, and from this October we will also upgrade our domestic 767 fleet," adds Joyce.