Qantas to eliminate most first class service as half-year profit plunges
Friday February 19, 2010
Qantas yesterday reported a A$58 million ($52.2 million) profit for the half-year ended Dec. 31, down 72% from the A$210 million earned in the year-ago semester, and announced the elimination of first class service to all but two destinations in an effort to lift yield.
The group result would have been a loss but for the contribution of low-cost subsidiary Jetstar Airways, which trebled its earnings, and the frequent-flyer program that doubled earnings. Consolidated revenue slumped 14% to A$6.09 billion while costs declined 15% to A$6.76 billion. Operating profit sank 48% to A$143 million from A$274 million in the first half of fiscal 2008-09.
The Qantas mainline unit posted EBIT of A$60 million, down 63.33% year-over-year, while Jetstar recorded a thumping 181% lift in EBIT to A$121 million. The loyalty program reported EBIT of A$157 million.
Group traffic increased 1.2% to 51.49 billion RPKs against a 2.2% decline in capacity to 62.47 billion ASKs. Load factor improved 2.7 points to 82.4% but yield decreased 14.9% to A10.28 cents. There were some significant differences within those numbers, with Qantas International suffering an 8.9% drop in RPKs to 25.73 billion while Jetstar International experienced a 40.2% leap to 5.53 billion. The group's fleet numbered 237 aircraft at period end, up from 226 the previous year.
Qantas announced that it has committed A$400 million to reconfigure and enhance its A380s and nine 747-400s. It will eliminate first class on all long-haul aircraft except for 12 A380s that will be dedicated to Los Angeles and UK service. Those A380s, however, will be reconfigured with fewer business class and more premium economy and economy seats. From 2012, the remaining eight A380s on order will be delivered in a three-class, 550-seat configuration with no first class. QF will revamp its newest 747-400s, including its six 747-400ERs, in a 359-seat configuration comprising 58 business, 36 premium economy and 265 economy seats.
CEO Alan Joyce told ATWOnline that the outlook remains tough on the international front, with "the UK and US still weak." While declining to provide specifics, he said QF's "international operations are losing money while domestic is making money." He added that "passenger revenue in the second half of this financial year is expected to be higher than the first half as yield continues to improve. Our yield in the month of December had recovered 16.5% from the lows in August." For the full year the company is forecasting an operating profit in the A$300-A$400 million range.
by Geoffrey Thomas
http://www.atwonline.com/news/story.html?storyID=19443
Friday February 19, 2010
Qantas yesterday reported a A$58 million ($52.2 million) profit for the half-year ended Dec. 31, down 72% from the A$210 million earned in the year-ago semester, and announced the elimination of first class service to all but two destinations in an effort to lift yield.
The group result would have been a loss but for the contribution of low-cost subsidiary Jetstar Airways, which trebled its earnings, and the frequent-flyer program that doubled earnings. Consolidated revenue slumped 14% to A$6.09 billion while costs declined 15% to A$6.76 billion. Operating profit sank 48% to A$143 million from A$274 million in the first half of fiscal 2008-09.
The Qantas mainline unit posted EBIT of A$60 million, down 63.33% year-over-year, while Jetstar recorded a thumping 181% lift in EBIT to A$121 million. The loyalty program reported EBIT of A$157 million.
Group traffic increased 1.2% to 51.49 billion RPKs against a 2.2% decline in capacity to 62.47 billion ASKs. Load factor improved 2.7 points to 82.4% but yield decreased 14.9% to A10.28 cents. There were some significant differences within those numbers, with Qantas International suffering an 8.9% drop in RPKs to 25.73 billion while Jetstar International experienced a 40.2% leap to 5.53 billion. The group's fleet numbered 237 aircraft at period end, up from 226 the previous year.
Qantas announced that it has committed A$400 million to reconfigure and enhance its A380s and nine 747-400s. It will eliminate first class on all long-haul aircraft except for 12 A380s that will be dedicated to Los Angeles and UK service. Those A380s, however, will be reconfigured with fewer business class and more premium economy and economy seats. From 2012, the remaining eight A380s on order will be delivered in a three-class, 550-seat configuration with no first class. QF will revamp its newest 747-400s, including its six 747-400ERs, in a 359-seat configuration comprising 58 business, 36 premium economy and 265 economy seats.
CEO Alan Joyce told ATWOnline that the outlook remains tough on the international front, with "the UK and US still weak." While declining to provide specifics, he said QF's "international operations are losing money while domestic is making money." He added that "passenger revenue in the second half of this financial year is expected to be higher than the first half as yield continues to improve. Our yield in the month of December had recovered 16.5% from the lows in August." For the full year the company is forecasting an operating profit in the A$300-A$400 million range.
by Geoffrey Thomas
http://www.atwonline.com/news/story.html?storyID=19443
