23 August, 2018

Qantas report record breaking year

News in from Australia and the Qantas Group has reported an Underlying Profit Before Tax of $1.6 billion for the 2018 financial year, which is a new record for the national flag carrier of Australia.

It reports today that all parts of the business contributed to the result which has been helped by healthy levels of demand across key market areas, higher revenue and a particularly strong performance in the domestic flying businesses of Qantas and Jetstar.

The result will not only enable the Group to return a dividend to shareholders but also keep investing for the future. The group will also reward its employees with a cash bonus the company said today.

Chief Executive Officer Alan Joyce said the record profit reflected a strong market as well as the benefits of ongoing work to improve the business and build long-term shareholder value. “These numbers show a company that’s delivering across the board. - Our investment in free Wi-Fi and cabin improvements are delivering a better experience for customers as well as higher earnings for Qantas and Jetstar. The overall value for the travelling public remains extremely strong, with domestic sale fares almost 40 per cent lower in real terms than they were fifteen years ago."

Mr Joyce explained the at airlines was seeing good demand across was particularly pleased with the result despite higher fuel costs. “Ultimately our success relies on the great service and dedication to safety from our people. - We’re very pleased to reward our people with a bonus for this fantastic result." 



Key items
Underlying Profit Before Tax: $1.6 billion (up 14%)
Statutory Profit Before Tax: $1.4 billion (up 18%)
Statutory Earnings Per Share: 56c (up 21%)
Return On Invested Capital: 22%
Net free cash flow: $1,442 million (up 10%)
Shareholder return of up to $500 million: 10 cents per share ordinary franked dividend, plus an on-market buyback of up to $332 million
Bonus for 27,000 non-executive employees, worth a total of $67 million
Extension of global lounge improvement program –– six additional ports to be upgraded
Commitment to create a second pilot academy facility in regional Australia.
Domestic Results

The Group’s domestic flying operations delivered EBIT of $1.1 billion, which is 25 per cent higher than FY17 and represents a new record for the business.

This was achieved through the combination of Qantas and Jetstar’s network, schedule and product strengths in key markets, and supported by capacity discipline driving higher seat factors and higher unit revenue.

Margin growth was helped through efficiency gains (such as Jetstar’s A320 cabin refit program) and investing for a higher premium (such as new lounges and free inflight Wi-Fi on Qantas). Qantas Domestic achieved a 19 per cent increase in earnings from a 6 per cent increase in revenue.

The Group maintained its corporate share, increased its share of small to medium enterprises, and saw a continuation of growth in the resources sector that began in the first half of the year. Demand was also boosted by flows from international partner airlines on to domestic services. Leisure demand remains strong and Jetstar carried 24 million passengers domestically and internationally for under $100.

International Results
Qantas International increased its earnings by 7 per cent to $399 million and maintained its margin in the face of strong competition and higher fuel prices.

Qantas International made several important structural changes during the year, including the introduction of the 787, new routes like Perth–London and taking on additional Trans Tasman flying for partner Emirates. These changes started delivering cost and revenue benefits in late FY18, which will continue through FY19 onwards.

Jetstar International posted a strong profit after managing an $11 million impact from Bali ash clouds and start-up of new routes like Melbourne-Ho Chi Minh.

Jetstar branded airlines in Asia were all profitable and continue to give the Group a capital-light foothold in key growth markets. The expansion of Qantas’ Singapore hub has been helped by traffic flows and onward connections with these airlines.


Qantas Freight continued to perform well, with the international market strengthening and the domestic market stable.

Future Plans
Several major investments were announced during FY18, including six additional 787-9s for Qantas International, accelerated the retirement of remaining 747s, a major upgrade of A380 cabins and 18 new A321LR NEOs for Jetstar.

Work on Project Sunrise – which will unlock direct flights from the east coast of Australia to London and New York by 2022 – advanced to the request for proposal stage with Airbus and Boeing. And several lounge upgrades were announced, underway or completed.

Qantas has today announced an extension of its global lounge upgrade program, designed to support demand for premium travel across six additional ports. They are:

Updated and expanded Sydney International First Lounge
Major upgrade to the Auckland Lounge
Refreshed Tokyo Narita Lounge
Expanded Brisbane International Lounge
Two regional lounge upgrades – Tamworth and Hobart.


The Qantas Group has today also committed to a second Pilot Academy facility, which will help meet the unprecedented global demand for skills as the aviation sector continues to grow. The academy concept is designed to provide a future talent pipeline for Qantas Group airlines and support General Aviation in a country that relies heavily on air transport. It also represents a commercial opportunity to create a centre of excellence to train pilots for airlines throughout the region.

The concept has been met with substantial levels of support from state governments, local councils and the private sector. 

Qantas has set aside a total of $20 million towards the establishment of the two facilities. Both will be located in regional Australia, with cities to be announced in coming weeks. The first location will open during the calendar year 2019 and the second expected to follow in 2020.

Qantas has also committed to delivering up to $3 million to regional communities as part of its drought assistance program.


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