Twelve months ago Qantas announced a $2.8 billion loss. Today it went back into profit, driven by cost-cutting, restructuring and good management of fuel costs.
And the last half of the 2015 financial year were the best six months financially in the history of Qantas, says CEO Alan Joyce.
So far, under Joyce’s restructure program, $1.1 billion of cumulative transformation benefits have been realised. This includes $894 million unlocked in the 2015 financial year.
“Without those numbers Qantas would have been producing a loss today,” Joyce told a media briefing.
“Qantas wouldn’t be ordering the 787s and Qantas wouldn’t be making any returns to the shareholders.”
From a full year underlying profit of $975 million, reversing last year’s record $2.8 billion loss, Qantas is giving shareholders a $505 million capital return, a 23 cents per share cash distribution which for most shareholders won’t attract a tax payment.
The statutory profit after tax of $560 million included $186 million of costs driven by redundancies, restructuring and other costs associated with the Qantas transformation program. Revenue was up 3% to $15.816 billion.
Good things are happening.
The transformation is the biggest driver, Joyce says. The entire aviation industry benefited from lower fuel prices but Qantas made the most of this by getting its price hedging right.
“Qantas this year with these results will make more than Virgin, Air New Zealand, Singapore Airlines and Etihad put together and that’s the first time in our history that we’ve achieved that,” he says.
“Every airline gets the benefit (of lower fuel prices) but Qantas is outperforming the rest of the market. And it’s only because of transformation that we have these strong results.”
Joyce says Qantas is ahead of every target on the transformation program. Another $450 million will be realised in the 2016 financial year.