Qantas has returned to profit just six months after posting its largest loss.
It posted an underlying profit of $367 million, ahead of Qantas forecasts, for the six months to the end of December, a 245.6% improvement.
Revenue was $8.071 billion, up 2.1%. Statutory profit after tax was $206 million, rise of 187.7%.
Qantas had foreshadowed an underlying profit of up to $350 million for the first half.
The airline booked a record $2.8 billion loss in the 2014 financial year to the end of June.
The strong turnaround is being driven by a $2 billion restructuring program including a loss of 5,000 jobs. Qantas says all targets have been either met or exceeded.
All parts of Qantas Group have returned to profitability, including Qantas International which is in the black for the first time since the Global Financial Crisis.
Qantas International reported underlying earnings before interest and tax of of $59 million, a turnaround of $321 million.
Qantas Domestic hit underlying earning before interest and tax of $227 million, an improvement of $170 million compared with the same period in financial year 2014.
The outlook for the second half of the financial year has improved with overall demand stable, while demand is mixed in the Australian domestic market. All divisions of Qantas are expected to end the year in profit.
CEO Alan Joyce says the result showed that the company is executing the right plan with discipline and speed.
“The decisive factor in our best half-year result for four years was our complete focus on the Qantas Transformation program,” Joyce said. “It’s clear that without the impact of transformation, we would not be announcing a profit today.”
Qanats got $374 million in benefits from the cost cutting program during the six months. And the airline is now targeting $675 million in financial year 2015, up from the previous target of $600 million.
The results were boosted by $162 million in increased revenue per available seat kilometre, $59 million from the removal of the carbon tax and $33 million from lower fuel prices.
The air fare battle between Qantas and Virgin Australia has eased, allowing both airlines to get a better return on each seat sold.
Virgin Australia isn’t quite back into the black but has been clawing back its losses. It posted a loss of $47.8 million million for the first half. The statutory loss after tax is an improvement on a $74.3 million loss for the same period in 2014. The underlying profit before tax was $10.2 million.
Investors are loving the message from Qantas. Since the start of January this year, the shares have increased by 150% to $2.81.
The shares jumped 6.23% to $2.985 when the Australian market opened.