Qantas International returns to profit

Qantas International has returned to the black for the first time since the global financial crisis.

The Australian carrier’s overseas operations recorded EBIT (earnings before interest and tax) of AU$59 million (US$46m) in the first six months of the financial year, compared to a loss of AU$262m in the same period the previous year.

Qantas attributed a large part of the turnaround to its ‘Qantas Transformation’ plan, which reportedly saved the airline AU$159m in the six-month period. Unit costs were cut by 3.8% and revenue climbed 4.8%.

Part of the restructuring plan involved Qantas increasing its fleet utilisation, which enabled the airline to add capacity to destinations including Los Angeles, Dallas, Vancouver, Santiago, Honolulu and Auckland.

“The decisive factor in our best half-year result for four years was our complete focus on the Qantas Transformation programme,” said Qantas CEO, Alan Joyce. “It’s clear that without the impact of transformation, we would not be announcing a profit today.

“Our financial position is significantly stronger because of the actions we’ve taken, and we are giving Qantas a solid foundation for growth in earnings,” he added.

The financial performance of Qantas Domestic also improved significantly in the first half, with EBIT reaching AU$227m – a year-on-year improvement of AU$170m. Low-cost unit Jetstar also returned to profit, with a six-month EBIT of AU$81m.

The group’s overall pre-tax profit of AU$367m is its best first-half performance since 2010, and an improvement of AU$619m compared with the same period last year.

Looking ahead, Qantas said that overall demand is “stable” and that yield and load factors “are in the early stages of recovery”. In light of this, and the recent drop in fuel costs, Qantas said that “all operating segments are expected to be profitable in financial year 2015”.