Qantas set to rake in $900m half-yearly profit

Qantas set to rake in $900m half-yearly profit

Qantas expects to ring up as much as $925 million in pre-tax profit for the six months from July to December 2015, more than doubling its take compared to the previous period in 2014.

In a 'market update' forecast issued today, Qantas tipped the underlying profit for the first half of the 2016 financial year before tax as being "in the range of $875 million to $925 million."

Significantly, those numbers are close to the $975 million which Qantas chalked up for the full 2015 financial year – which points to a bumper billion-plus result when the airline shares the spreadsheet for the full 2016 financial year.

Wind the clock back to this time a year ago and Qantas was looking at $367 million in pre-tax profit – numbers which represented a dramatic recovery from a year prior, when Qantas reported a $252 million loss.

Tailwinds for the Flying Kangaroo include increased ticket revenue, lower fuel prices and the continued fruits of a wide-reaching ‘transformation’ project designed to strip out $2 billion in costs by 2018.

"We’ve seen improved revenue in our domestic and international operations, reduced costs across the Group through the Qantas Transformation program, and expect another record half-year result from Qantas Loyalty," commented Qantas Group CEO Alan Joyce.

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David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

27 comments

  • Christopher Campbell

    Chris2304

    15 Dec, 2015 09:47 am

    More 787s ordered in February?

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  • Matthew Walsh

    mattwalshmedia

    15 Dec, 2015 10:30 am

    3-3-3 makes me sad :(

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  • Christopher Campbell

    Chris2304

    15 Dec, 2015 10:31 am

    Hopefully 3-3-3 Cozysuite!!

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  • Southland

    Southland

    15 Dec, 2015 12:50 pm

    All this cost cutting = a major incident or accident in the next 12 months. Hope change management in Ascot is matured

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  • Dave

    Grannular

    15 Dec, 2015 01:15 pm

    [Deleted - personal attack/comment]

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  • Travelator

    travelator

    15 Dec, 2015 01:42 pm

    Dave, It is never acceptable or appropriate to respond to other people's that way no mater how much you disgree with their views.

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  • Chris Chamberlin

    ChrisCh

    15 Dec, 2015 01:52 pm

    Hi Dave, please be reminded of AusBT's published comment policy, specifically:

    Don't personally attack others for their opinion: if you disagree, then make your case. But stay objective and stick to the topic.

    Your post has been removed in line with this policy.

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  • Charles

    SteveCF

    15 Dec, 2015 05:29 pm

    Southland, that is a very provocative statement and not true.

    There has been a lot of practical steps Qantas have taken that have made them a leaner and more profitable business.

    One of the best decisions is modernising the fleet, new aircraft designs mean more fuel efficiency and are much more cost effective to maintain due to new designs specific to lowering total life cost, and this will be realised as the 787 joins the fleet even more so.  

    Transitioning the 767 out is also proof of this.

    I think baseless attacks like this should also be moderated, I also think certain sectors don't like the fact that AJ is actually doing a good job and getting these sorts of results.

    Change is tough, it's bruising and for Qantas it's working thanks to strong leadership. 

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  • Robin Ryan

    RobJ

    16 Dec, 2015 03:01 pm

    While there is genuine imporvement at Qantas, let's be clear about the main profit drivers. The first was a long overdue write down of aircraft values which meant dramatically lower depreciation expense in subsequent years - no actual cash improvement. Then there was the capacity truce: both these measures were Qantas behaving more sensibly than previously. After these, two pieces of luck - oil  and the dollar - and some good management at last, mostly in aircraft utilisation.

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  • gumshoe

    gumshoe

    15 Dec, 2015 01:41 pm

    I wonder without the fuel savings where Qantas would be financially today?.

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  • emirates777

    emirates777

    15 Dec, 2015 01:42 pm

    The wonders of cheap fuel. Good times to be running an airline these days.

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  • StudiodeKadent

    StudiodeKadent

    15 Dec, 2015 02:04 pm

    Glad to see Qantas experiencing some more success.

    Let's hope we see more progress on fleet renewal and cabin renewal. More 787-9s, perhaps an announcement regarding 787-10s (since I think QF will buy those as A330 replacements), and perhaps an A380 refurbishment program to be announced?

    And of course, paying off debt. This is important too.

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  • Christopher Campbell

    Chris2304

    15 Dec, 2015 02:24 pm

    Order

    12 more 787-9s

    40 787-10s

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  • StudiodeKadent

    StudiodeKadent

    15 Dec, 2015 02:40 pm

    20 787-9s may be a few too many for QF though.

    The 787-9 would be ideal for SYD-SCL, SYD-JNB, SYD-SFO (at least temporarily as a replacement for the 747, but if QF go for 777-Xs then we can expect that route to be upgauged), BNE - DFW and BNE - DXB. I don't think the 787-9 has the range to do MEL - DFW easily (plus that flight would require First Class) or SYD - ORD (which would also require First Class).

    The 787-9 has too much range and insufficient capacity for Asian routes. That's 787-10 territory.

    40 787-10s would be enough to replace all the A330s and give a slight amount of growth. But I guess some Asian routes (with sufficient demand and out of Syd/Mel) may also be operated at times by whatever QF choose to replace the A380s and 747s (I'd presume 777Xs).

    Either way, I think the 787-9 will ultimately be used only on 5 routes (and I think QF will eventually upgauge SYD - SFO to a 777X-9 since SFO is a popular destination). ULH out of SYD and MEL will probably end up being 777X-8 (with a First Class cabin).

    So honestly, I can't see QF as needing any more than 12 787-9s (some spares for maintenance and in-case-of-breakdowns would be required).  Unless they start launching more flights to South America or perhaps maybe India (although the range to India is within the 787-10s capability).

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  • Christopher Campbell

    Chris2304

    15 Dec, 2015 02:48 pm

    Do you mean 20 would be to many given you said 12 787-9s would be all Qantas should need

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  • StudiodeKadent

    StudiodeKadent

    15 Dec, 2015 02:50 pm

    Yes. Correct. 12 should be enough. 20 would probably be too many.

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  • grov

    grov

    15 Dec, 2015 03:24 pm

    No mention of any changes in market share, both domestic and international? I thought QF was still steadily losing in this area.

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  • patrickk

    patrickk

    16 Dec, 2015 11:52 am

    Grov, QF is now in the black with international as well.

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  • Shang YEH

    a19901213

    15 Dec, 2015 06:18 pm

    Hopefully this means they will take up remaining 380s. 

    I just flew QF26 on VH-OEB in their old first class and TBH these old 747 just can't compete with both ANA&JAL which use superior hardware on this route.

    I love 747 just as everyone does, but it's time to replace them with modern aircraft. 

    787 is great but probably won't be able to fulfil the demand on this route.

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  • StudiodeKadent

    StudiodeKadent

    15 Dec, 2015 06:49 pm

    "Hopefully this means they will take up remaining 380s."

    Its possible but not entirely likely. I can see them taking up A380s on the Sydney-Haneda route (since they'd want as much capacity as possible on it given Haneda's the most convenient airport, and there's also JAL's flagship ground service there), so its certainly plausible.

    That said, if they do so, it'll be part of an A380 upgrade program (taking A380s temporarily out of service in order to upgrade the Business product especially). And even then there's the possibility QF may prefer to get 777Xs instead of more A380s... arguably the A380 is too big for Qantas.

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  • alenb

    alenb

    15 Dec, 2015 09:55 pm

    lets not forget a lot of this is not only due to oil price but a lot of jobs lost 

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  • flyingisthebest

    flyingisthebest

    15 Dec, 2015 11:41 pm

    They could do with taking 2 A380's at minimum as currently the 747/380 fleet is stretched to the limit. At the current moment if one plane goes tech, there are no back ups. It causes problems throughout the system. This has happened so many times recently, that you need more fingers to count it. 

    787 wise

    BNE-SFO D x 2

    BNE-LAX 10 weekly(Using a mix of 1 x 747/ 2 x 787) (Send the other 747 to MEL-HKG)

    BNE-DFW D x 2 No brainer

    BNE-DXB-TXL x3 Brisbane is the largest city in Australia with no non stop service to meet the 2300-0200 bank in Dubai. Plus flights to Berlin as it's a big hole in the Emirates network.

    BNE-KUL/BKK/ x 2 If configured properly in a similar manner to the Air Canada High density configurations, low yield but greater nework strength. It will work. Doubt these 3 will go daily, maybe 4 weekly each. KUL, is a missing gap, BKK because it's a massively popular destinatio

    BNE-YVR x 2 D Why AC are coming to Brisbane

    SYD-KUL  x 1Similar to BNE, but the options are a stigma of MH, or being literal cattle on D7 or the flying kangaroo. I know which option many aussies will take. Look at BA's arrival back to KUL, QF can follow in the success.

    SYD-PEK  x 1 surprising hole, the 787 has better CASM than the 330, makes it easier to work.

    SYD-BWN (4 weekly) TPE (3 weekly) x 1 easy monopoly and also boost CI to make SYD a daily destination from TPE

    MEL-PEK x 1

    MEL KUL D x 1 See SYD-KUL

    MEL-BKK D x 1 would be nice to compete against TG

    MEL-DFW D x 2

    MEL-MNL x 1 3 weekly send the other 4 to BNE-MNL

     BNE- MNL competes with PR who go via DRW, 

    PER-JNB D, x 2 a monopoly for SA, and it's quicker to go via SIN then DXB LOL

    PER-HKG x 1 5weekly CX monopoly.

    PER-PVG 5 weekly and the other 2 frequencies to BNE-PVG (Brng that to 5 weekly) x 1 due to MU and QF being biffls.

    PER to every city in the world to please AUSBT readers so you need 1000 at least (Saitre)

    Qantas could do with an extra 26 787-9's for growth, as there are several holes in the network which could be plugged and currently Qantas does not have the aircraft to service growth and currently the fleet requirements.

     

     

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  • highflyer

    highflyer

    16 Dec, 2015 03:06 am

    Would be good to see QF fly back directly into Taipei as well, instead of codesharing on that route.

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  • GregXL

    GregXL

    16 Dec, 2015 10:34 am

    The West newspaper manages to turn a Qantas profit story into the continued pitch for PER-LHR services on 787s.  Can't see how it would be of interest to QF.

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  • patrickk

    patrickk

    16 Dec, 2015 11:56 am

    Greg XL Joyce has been plugging this one quite a lot so it is certainly on the readar. Having a DFW-Melb-Perth-London could work als long as the arrival and departure times worked.

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  • GregXL

    GregXL

    16 Dec, 2015 02:32 pm

    Yes, but I tend to think that there is more enthusiasm in the media than there is at QF.   While it would be good for PER pax, would those from MLB and SYD prefer to stop in DBX ?  There have also been comments posted on other sites questioning the viability of PER-LHR and more so the  return on 787-9.  Issues with alternates.  AJ might say its on the radar, but note that commercial aviators use radar to detect things to avoid!

     

     

     

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  • patrickk

    patrickk

    17 Dec, 2015 12:18 pm

    I think there would be enough people willing to change in Perth (rather than Dubai) for example me from Canberra.  There is the bus trip on domestic from Perth, but then there are longer bus trips to one's plane in the Dubai heat. Having a 789 carry passengers from Dallas to Perth and from Melbourne to London may keep a 250 seat flight full on all sectors. I am sure Exmouth is being condered as the alternative with some addtional facilities being put there if it comes to pass.

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