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Jetstar and FFP save Qantas mainline as operating losses touch AUD30 million a month

19-Aug-2009

Qantas’ mainline flying business has gone from a AUD1.23 billion profit before tax to a AUD77 million loss in the space of 12 months. Were it not for a AUD126 million profit before tax from Jetstar (up 23.5%) and AUD310 million profit from its frequent flyer business (up 142%), the Group would have been deeply in the red. And more of the same is expected. With Qantas mainline losing up to AUD30 million a month, the airline still faces a toxic combination of “high levels of volatility in the economic outlook, industry capacity, passenger demand, fuel prices and exchange rates continue”, making it “not possible to provide any profit guidance”. [2615 words]

Unlock the following content in this report:

Subheadings:

  • Second half earnings rout
  • Yields stabilise, but at low levels
  • Segment review: AUD107 million Group loss in second half
  • New AUD1.5 billion cost cutting programme announced
  • Qantas mainline suffers…
  • Record year for Jetstar in deteriorating market conditions  
  • Success in the tough Japanese market
  • Initial profits with domestic New Zealand operations
  • 400,000 pax on trans-Tasman services
  • Strengthening Singapore hub as it focuses on Pan Asian growth 
  • And not forgetting about the Australian domestic market
  • Blow for Boeing, more A330s for Jetstar long-haul
  • Looking again to Europe 
  • Qantas Frequent Flyer – star performer
  • Outlook: No dividend, no guidance and not much positive

Graphs and data:

  • Qantas Group segment performance (AUD mill): 1HFY1009 vs 2HFY2009
  • Qantas international and domestic yield growth (% change year-on-year): Jul-2008 to May-2009
  • Qantas Group segment performance (AUD mill): FY 2008 vs FY2009
  • Qantas profit before tax: 1999 to 2009
  • Qantas net profit margin: 2005 to 2009
  • Qantas passenger number growth and PLF: 2005 to 2009
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