Qantas has hit profit in the first quarter of this financial year with better yields on seats.
CEO Alan Joyce told the airline’s annual general meeting that preliminary figures indicated Qantas made an underlying profit before tax.
“The evidence grows daily that we are on track with our plans,” he told shareholders.
Qantas still isn’t paying dividends and is in the middle of a $2 billion cost saving program which will see 5,000 staff lose their jobs.
In the financial year ended June 30, Qantas posted a $2.8 billion loss.
But in the first three months of this financial year, traffic statistics show passenger loads are up across the board.
Yields at Qantas International have now been positive for six consecutive months as revenue
and network initiatives from the Transformation program take hold.
In the domestic market both passengers loads and yields were higher in September than in the previous year.
“On the back of the hard work of the people of the Qantas Group, we are on track to deliver an underlying profit for the first half of the financial year,” he said.
“As I go around the business I also see a renewed sense of purpose and pride. There is a deep resilience within Qantas and a hunger for success.”
Chairman Leigh Clifford told shareholders the underlying loss before tax of $646 million for the financial year to the end of June was totally unsatisfactory.
“These unsatisfactory numbers reinforce the importance of Qantas management’s reform agenda, the acceleration of which was announced by (CEO) Alan Joyce in December last year,” he told the AGM.
He says productivity has increased dramatically, with the introduction of new technologies and improved workplace practices.
Customer satisfaction levels are at or near record highs for Qantas International, Domestic, Loyalty and Jetstar.
With the accelerated Transformation Program, $204 million of benefits were realised in the second half of 2014.
In financial year 2015, at least $600 million of benefits will be realised, meaning $800 million of cost reduction in the first eighteen months of the three-and-a-half-year program.
He says the Australian economy is in transition and the immediate outlook mixed.
“There is still a general cautiousness among consumers that is affecting all sectors of the Australian economy,” he says.