Qantas has reported a significant upturn in its financial performance, and now plans to make further upgrades to its fleet.
The Australian airline recorded a 10% increase in pre-tax profits for the first half of the 2012-13 financial year, to AU$223 million (US$230m). This was largely the result of an improvement in the performance of its international operations. Qantas International’s pre-tax loss narrowed to AU$91m, compared to AU$272m in the same period last year. This improvement more than offset a drop in profits at Qantas Domestic, which fell 33.5% to AU$218m, and Jetstar, which declined 12.9% to AU$128m.
Overall company revenues increased 2.4% to AU$8.24 billion, as passenger numbers rose 4.3% to 24.7m. Load factors in the six-month period averaged a healthy 80.0%.
Qantas’ Group CEO Alan Joyce said he was happy with the airline’s achievements in the first half of the year.
“We increased underlying profit by 10%, announced a global aviation partnership with Emirates, launched Jetstar Japan, reinforced our position in the Australian domestic market, reduced comparable unit costs by 3%, announced the early repayment of AU$650m in debt, commenced a share buy-back and sold non-core assets,” Joyce said. “The operating environment remains complex and volatile, but we are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.”
The airline also announced further plans to upgrade its fleet. From late 2014, Qantas will revamp 10 of its Airbus A330-300s and 20 A330-200s with new interiors, including flatbed seats in business class and a new in-flight entertainment system. The A330-300s will be operated on routes to Asia, while the A330-200s serve domestic routes to Perth, enabling the retirement of the group’s Boeing 767s.
In addition, Qantas has announced plans to purchase five additional B737-800 aircraft for its domestic operations, which will be delivered from 2014. It will also extend the lease of two existing B737s.
“We continue to invest in transforming Qantas International and strengthening the profitable Qantas Domestic business,” Joyce said. “Older narrow body Boeing 737-400s will be phased out by the end of 2013 and Boeing 767s by mid-2015. We are simplifying our fleet and making better use of the greater flexibility and higher frequencies that the B737-800s provide, while investing in what will be the best domestic onboard product anywhere in the world with the A330s.
“We know that fleet renewal is vital to customer satisfaction,” Joyce added.
Qantas’ development will take a major step forward in April this year, when it commences a joint venture agreement with Emirates. The move will see it re-route all ‘Kangaroo Route’ services through Dubai, rather than East Asia.