Qantas post $206 million profit for first half of 2014/15 financial year

A YEAR on from one of its darkest periods, Qantas finally has something to smile about. The company is back and it has $206 million to prove it.

Qantas is profitable again.

A YEAR on from one of the darkest periods in Qantas’ history, the national carrier has bounced back.

Few would’ve believed it when chief executive Alan Joyce said the company would be back in the black within the year. But that’s exactly what’s happened.

Qantas has reported an after-tax profit of $206 million for the second half of 2014. Its underlying profit before tax was $367 million, the best first-half performance since 2010, Qantas claimed.

Significantly, Qantas said all operating segments of the group were profitable in the six months to December 2014, in stark contrast to its previous financial year performance which saw it lose a staggering $2.84 billion.

A year ago, Qantas confirmed it would axe 5000 jobs as it sought to make $2 billion in savings. At the time, it announced a half-year loss of $235 million after tax. Its full-year results for the 2014 financial year, released in August, confirmed that it was a very bad year for Qantas.

One of the best pieces of news for Qantas in today’s results is that its international division was profitable for the first time since the GFC. The international division made a pre-tax profit of $59 million. The domestic division reported a pre-tax profit of $227 million while Jetstar netted a pre-tax profit of $81 million.

Alan Joyce will be feeling a lot better today than a year ago.

The lucrative loyalty division reported a pre-tax profit of $160 million while its freight services recorded a pre-tax profit of $54 million.

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

“Our people have worked hard and made a huge contribution to bring about the change we need. They deserve great credit for this result. What sets this transformation apart is that we are reducing costs permanently while at the same time delivering Qantas’ best ever fleet, product and service.

“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.”

On its outlook, Qantas said that while overall demand is stable, demand in the domestic market is mixed and its yield and load problems have stabilised and is in the early stages of recovery.

It’s also expected to benefit from the drop in oil prices. Qantas said its full-year fuel costs, at this stage, is expected to be $4 billion. Last financial year, it was $4.6 billion.

Originally published as Qantas post $206 million profit for first half of 2014/15 financial year