Qantas strikes, grounding to hit profit in H1 2012

This story is sourced from Pro
See more Pro news »

Australia's Qantas Group expects fuel costs and the impact of industrial action to total over Australian dollars (A$) 650 million ($637 million) for the first half of fiscal 2012 ending 31 December.

In spite of this, the airline expects to report an underlying profit before tax (PBT) for the period in the range of A$140 million to A$190 million.

Of the A$650 million, the industrial action taken by the unions and the subsequent fleet grounding is estimated to have had an unfavourable financial impact of A$194 million in the first half of fiscal 2012, the airline said in a statement.

Of this, A$68 million resulted from the industrial action prior to the grounding; A$70 million from the impact of the grounding; A$27 million from the impact on forward bookings of the union campaigns; and A$29 million from customer recovery initiatives in response to industrial action and grounding.

"Had the union industrial campaigns continued, the impact on the business would have grown to A$85 million a month," said chief executive Alan Joyce.

The airline also reported its traffic figures for the month of October.

The group witnessed a 1.1% year-on-year decline in RPKs in October 2011, while its passenger numbers fell by 1.8% to 3.93 million from a year before.

The airline's overall capacity, measured in ASKs, rose by 0.2%, Qantas said. Its passenger load factor fell by 1.1 percentage points to 81.4%.

RPKs at Qantas' domestic operations declined by 8.7% year on year, while its passenger numbers decreased by 11.3% to 1.41 million. The carrier's ASKs fell by 8.1%, while its passenger load factor fell by 0.6 percentage points to 83.6%.

QantasLink's RPKs were up by 0.8% year on year in October and its passenger numbers rose by 0.5% to 448,000. ASKs grew by 5.9%, while its passenger load factor declined by 3.6 percentage points to 70.9%.

Qantas' international traffic, measured in RPKs, decreased by 5.4% year on year and its passenger numbers declined by 3.6% in October to 507,000. The airline's ASKs fell by 2.9%, and its passenger load factor declined by 2.1 percentage points to 81.3%.

Low-cost subsidiary Jetstar's domestic RPKs rose by 12.9% and its passenger numbers increased by 7.9% to 915,000. Its ASKs increased by 7.5%, while its passenger load factor grew by 4.2 percentage points to 87.8%.

Jetstar's international operations had a 6.1% growth in RPKs and a 11.1% increase in passenger numbers to 393,000. The low-cost carrier's ASKs increased by 8.3%, and its passenger load factor was down by 1.6 percentage points to 76.1%.

Singapore-based Jetstar Asia posted a 40.2% rise in RPKs and passenger numbers increased by 7.1% to 255,000. Its ASKs increased by 40.8% and its passenger load factor decreased by 0.4 percentage points to 79.8%.