Qantas has posted a $2.84bn loss but CEO Alan Joyce insists the worst is over for the national carrier and is pinning hopes on international investment following the softening of rules over foreign ownership.
But the group's Loyalty business could soon turn advertising middleman as it brings together on and offline data, the holy grail for brands and agencies trying to better target advertising to people with a greater propensity to buy the advertisers' wares.
Announcing full year results today, the carrier stated that it has created a new holding structure to facilitate foreign investment.
The group loss includes a $2.6bn write down of its fleet, largely bought at a time when the dollar was much stronger. It also includes fleet retirement costs of $394 million, and redundancies, restructuring and other transformation costs of $428 million.
The grim result was largely expected. Joyce described the numbers as “confronting” but claimed that “we have now come through the worst,” as the company made a break for a cleaner financial year.
“The structural decisions we announce today give the group maximum scope to attract capital in a fiercely competitive international aviation market. Standing still while the world changes around us is not an option,” Joyce stated. “With our structural review complete, we can move forward with certainty.”
The market will determine whether Joyce's confidence is well founded, but despite the scale of the loss, there were roses amongst the thorns.
Qantas Domestic reported underlying earnings before interest and taxes (EBIT) of $30 million, down from $365 million in FY13.
Qantas International reported an underlying EBIT loss of $497 million, compared with a loss of $246 million in FY13.
The Jetstar Group reported an underlying EBIT loss of $116 million, down from $138 million in FY13.
But Qantas Loyalty reported record EBIT of $286m, up 10% on last year.
It is thought the company will soon launch a business-to-business advertising element to the Loyalty business, which could deliver further significant growth this financial year.
The unit will help join the dots of on and offline customer data, drawing on the 300,000 Qantas cash customers, and the 10.1m Frequent Flyer members now using the scheme.
The new B2B unit “will look at media analytics and research and use our rich data to better target digital placement and help clients do that by marrying on and offline data,” Qantas Loyalty CMO Stephanie Tully told AdNews.
“The new business will rest a lot on core capabilities of Frequent Flyer because that is largely a data business. We've been working with partners to help with digital placement, media analytics and research.”
Qantas remains cagey on the name of the advertising unit and precise timings, but it is thought that business unit will launch in the next couple of weeks.
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