Qantas boasts top profits during “biggest and fastest transformation” in its history

Sarah Homewood
By Sarah Homewood | 20 August 2015

Qantas has today unveiled its full-year financial results, which sees the airline post its strongest profit since before the global financial crisis.

For the 12 months to 30 June 2015, Qantas reported an underlying profit before tax of $975 million and a statutory profit before tax of $789 million.

According to Qantas, which has OMD as its media agency and a selection of creative agencies on its roster, the strong result is due to its transformation program, which realised $894 million in transformation benefits during the year and saw the company meet its target of paying down more than $1 billion in net debt. The $2 billion Qantas transformation program was announced in December 2013.

A sharp fall in fuel prices is also said to have helped the airline's bottom line as well as depreciation savings from Qantas International fleet impairment, higher revenue per available seat kilometre (excluding foreign exchange) and the repeal of the carbon tax.

The business also announced a $505 million capital return to shareholders and a Boeing 787 Dreamliner order to start what it calls “a new era for Qantas International”.

Chief executive Alan Joyce said: “We are halfway through the biggest and fastest transformation in our history.

“Without that transformation, we would not be reporting this strong profit, recommencing shareholder returns, or announcing our ultra-efficient Dreamliner fleet for Qantas International.

“We have reshaped our business for a strong, sustainable future – and because we moved quickly and made tough decisions early, we have strong foundations to build on.”

Qantas Domestic reported underlying EBIT of $480m, compared with $30m in financial year 2014, driven by $302 million in transformation benefits and a 4.5% increase in revenue per available seat kilometre.

Its international arm reported underlying EBIT of $267 million, a turnaround of $764 million compared with a loss of $497 million in financial year 2014. This turnaround was said to be driven by transformation benefits of $408 million, with a 6% increase in revenue per available seat kilometre and a 4% reduction in comparable unit costs.

Joyce thanked Qantas staff who have had to make “sacrifices as we worked through changes across our business.”

“That sacrifice will be recognised with the $90 million in bonus payments to employees covered by agreements that include an 18-month pay freeze," he said.

“Our people have always been proud of Qantas’ history and its legacy. Today that pride is coupled with a new sense of focus and dynamism. We need to keep evolving and transforming to shape a truly sustainable future – but our people should take great satisfaction in what we are achieving together."

Last year Qantas brought in Kevin 07 adman Neil Lawrence to create its biggest ever brand campaign, with a two minute TV ad aired on 9 November.

Then, in June this year Qantas announced the progressive launch of a new series of digital, print, social, below the line, out of home and in-terminal advertisements and videos celebrating Qantas staff, the work they do and the unique way in which they do it.

This series is an extension of the Feels Like Home brand campaign and taps into the reason why so many people choose to fly Qantas – its people.

 

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