Qantas' annus horribilis and net loss behind it, will gain from restructure but with overcapacity

Declaring that Qantas has "reached an inflection point", CEO Alan Joyce sees the group heading into a comparatively calmer environment after an annus horribilis capped with significant restructuring costs that led the group to post a net loss of AUD245 million (USD257 million), its first since privatisation in 1993.

The group is continuing two key themes of late: first, reduced capital expenditure and, second, domestic growth to maintain a line-in-the-sand 65% market share. While Qantas is cancelling 35 firm order for the 787-9, it is likely to exercise retained options in order to support the growth of Jetstar, which will still take delivery of 15 787-8s.

Domestic overcapacity will show no signs of relenting as Qantas plans to increase 1H2013 mainline capacity by 9-11% to ensure it maintains its marketshare share against an expanding Virgin Australia. Yields, already weakened, will continue to fall. Bright spots emerge as new partners - Emirates - or closer partnerships - China Eastern - become increasingly possible.