Transformation program turns around Qantas financials

Nicola Riches
By Nicola Riches | 26 February 2015

Qantas International has returned to profit for the first time since the Global Financial Crisis, while the wider business – incorporating Qantas Domestic/Jetstar – is expected to return to the black later in 2015 after four years of difficult trading conditions.

Qantas group profits before tax hit $367 million for the six months ending Dec 31, as profits after tax reached $206m.

The results are significantly above the projected guidance range of $300 million to $350 million the company supplied to the market in December.

The result is a major turnaround from a $252 million pre-tax underlying loss in the first half of the previous year.

The airline’s best performance since 2010 is owed, it claims, to a variety of factors: namely its “Transformation Program” which saw the company invest significantly in its lounges, aircraft, technology and services.

A significant decrease in fuel costs – owed in part to the lowering of oil prices, saving $33m - plus the removal of the carbon tax – which resulted in a total saving of $59m - also contributed to a total $374m in cost savings generated by the wider “Transformation Program”.

The turnaround announcement follows the airline’s strongest marketing push to-date which re-positioned it as one of Australia’s leading brands with the “Feels Like Home” campaign. (See below for the campaign).

Its first TV-led brand campaign since 2012 (created and spearheaded by Neil Lawrence/ Lawrence Creative Strategy saw it seek to “reconnect and re-engage” with travellers across the country with a series of six emotional TVCs where people were reunited with their friends and family at Christmas.

Qantas also highlighted in its presentation this morning the success of its Frequent Flyer loyalty program, stating that 800,000 people joined between Dec 2013-14, with a record youth market penetration capturing 60% of 36-year-olds, or younger.

It also sought to highlight the success of its loyalty program by drawing attention to its recent acquisition of loyalty data and research company Taylor Fry.

Special Group, the agency, was recently appointed by Qantas, working on the promotion of its new Business Suite on the refurbished Qantas’ Airbus 330 with a TVC showing a woman falling asleep on one of its flatbeds.

Special join Lawrence Creative Strategy, R\GA, 303Lowe Sydney and The Hallway as the main agencies representing Qantas in the advertising space.

The Qantas media account was one of the hardest fought of the year in 2014. The win was in OMD's hands after it beat out Maxus, Bohemia, and incumbent ZenithOptimedia to the prize.

 

Email Nicola at nicolariches@yaffa.com.au.

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