Qantas has reported an underlying profit before tax of $852 million and a statutory profit before tax of $715 million for the six months ended December 31st, 2016.
The underlying result was down 7.5 per cent compared with the prior corresponding period, but above the guidance range provided in October last year. It reflects a strong performance in a mixed global aviation market, with the national carrier’s integrated Group strategy and on-going transformation enabling it to keep delivering value for shareholders while investing for customers.
The fall in statutory profit compared with the first half of financial year 2016 largely reflects the inclusion in last year’s result of a $201 million gain from the sale of Qantas’ Sydney Airport terminal. All parts of the Qantas Group were profitable in the half.
Combined domestic airline earnings across Qantas and Jetstar were $522 million, while Qantas Loyalty had a record result, giving the group a strong, profitable core in an improving Australian economy. The Jetstar Group as a whole also had a record result. Qantas International’s profitability is impacted by the high levels of capacity growth affecting all major airlines, but it achieved significantly higher margins than the industry average.
The group met all the objectives of its financial framework, reporting a rolling 12-month return on invested capital of 21.7 per cent. A further $212 million of transformation benefits were unlocked in the half, taking total benefits since 2014 to $1.9 billion. The group remains on track to reach its goal of $2.1 billion by June 2017.
Qantas chief executive Alan Joyce said Qantas was one of the best performing airline groups in the world. “Our transformation program has built a strong, sustainable business that generates returns throughout the economic cycle,” Joyce said. “Qantas and Jetstar’s domestic operations produced an outstanding result and Qantas Loyalty continued to thrive. “It’s a combination that keeps delivering and sets us apart from our competitors. “The international market is tough because of capacity growth and lower fares, and Qantas International is not immune from those pressures. “But the work we’ve done on removing costs and making the business more efficient means Qantas International is outperforming its peers in the region. “Our focus is to stay disciplined on capacity, keep downward pressure on costs, and introduce game-changing improvements like the Dreamliner and high-speed Wi-Fi. “This result is a credit to the hard work and dedication of our people, who have helped deliver high levels of customer satisfaction right across Qantas, Jetstar and Loyalty.”