QANTAS Group announces a half year profit of A$202 million

QANTAS Group (Sydney) issued the following financial statement (all amounts in Australian dollars):

“The Qantas Group has announced underlying profit before tax of $202 million for the half-year ended December 31, 2011, a decrease of $215 million compared with the prior corresponding period. Statutory profit before tax was $58 million.

The result reflects the $194 million financial impact of industrial action during the first half, as well as increased fuel costs compared with the prior corresponding period. Total fuel costs in the half were $2.2 billion, up $444 million (or 26 per cent).

The Group also today outlined measures that respond to global economic conditions and the structural challenges facing Qantas, including the European finance crisis, the changing Australian economy and the need to increase efficiency and competitiveness. These steps will position the Group for a strong, sustainable future and build long-term shareholder value.

They include a reduction in capital expenditure of $700 million over 2011/12 and 2012/13; a review of Qantas’ heavy maintenance footprint in Australia; and changes to Qantas’ catering and engineering operations.

Qantas’ underlying EBIT in the first half was $66 million, compared with $165 million in the prior corresponding period.

Jetstar achieved record underlying EBIT of $147 million, up $4 million on last year’s first-half earnings.

The following network changes will be made in order to adjust capacity to market conditions and route performance:

1. Withdrawal from the Singapore-Mumbai and Auckland-Los Angeles routes, effective 6 May 2012. This is in addition to previously-announced withdrawals from the Hong Kong-London and Bangkok-London routes, effective March 2012.

2. Aircraft changes on the following international and domestic routes: Sydney-Bangkok (Boeing 747 replaced with Airbus A330 from 10 June), Sydney-Perth (Boeing 747 replaced with Airbus A330 on certain services from 6 May) and Melbourne-Perth (additional A330 services added from 6 May).

3. Capacity increases on the Los Angeles-New York route from 6 May (Airbus A330 replaced with Boeing 747) and Sydney-Tokyo route from 10 June (one Airbus A330 service per week replaced with a Boeing 747 service, resulting in daily Boeing 747 services).

4. Early retirement of two further Boeing 747 aircraft (in addition to the four early B747 retirements announced in August 2011).”