Category Archives: QANTAS Group

QANTAS delivers a record first half profit, 18 Airbus A321NR NEOs for Jetstar

First QANTAS Boeing 787-9, delivered on October 17, 2017

The QANTAS Group has delivered its highest-ever first half Underlying Profit Before Tax of $976 million for the six months ending December 31, 2017.

  • Underlying Profit Before Tax: $976 million (up 15%)
  • Record results for Qantas Domestic, Jetstar Group and Qantas Loyalty
  • Statutory Profit Before Tax: $857 million (up 20%)
  • Statutory Earnings Per Share: 34.0c
  • Return On Invested Capital: 20.9%
  • Record level of operating cash flow; net free cash flow of $772 million (up 2.7 times)
  • Up to $500 million shareholder return: 7 cents per share ordinary unfranked dividend, plus an on-market buyback of up to $378 million

The result surpasses the previous record of $921 million achieved in the first half of FY16 and comes despite recent increases in fuel costs and continued international capacity growth. Both Underlying and Statutory profit before tax were significantly higher (15 percent and 20 percent respectively) than the first half of FY17.

All targets of the Group’s financial framework were met, enabling QANTAS to keep rewarding shareholders, investing for customers and positioning for the future.

CEO COMMENTARY

Group CEO Alan Joyce said the record result showed Qantas’ ability to keep delivering.

“After several years of consistent performance, we now have a lot of momentum behind us. We’re vigilant about maintaining that momentum and we’re confident about the future it allows us to build.

“Today’s result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route.

“Our lounges, Frequent Flyer program and initiatives like free Wi-Fi all drive customer satisfaction, and so does the network strength across Qantas and Jetstar.

“We’re seeing continued capacity discipline in the domestic market, coupled with a product advantage that’s delivering a significant profit share to the Group.

“This is a transition year for Qantas International and it’s setting up a bright future. We have the Dreamliner joining the fleet and important network changes on flights to Europe and across the Tasman, which will unlock significant benefits from FY19.

“For international to largely hold its own ahead of those benefits flowing through, and in the face of rising fuel costs and market capacity, shows its resilience.

“QANTAS Loyalty performed very well with the Frequent Flyer program at its core, but it’s also opening up fresh revenue growth by expanding directly into areas like financial services and health insurance.

“We operate in very competitive markets right across the Group, and we’re focused on continuous improvement.

“This result includes $181 million in benefits from ongoing transformation as part of an average annual target of $400 million. Ultimately, that discipline is key to our ability to keep delivering for our customers, shareholders and people,” said Mr Joyce.

GROUP DOMESTIC

QANTAS and Jetstar’s domestic flying operations combined posted their highest ever first half Underlying EBIT of $652 million.

The result was driven by ongoing capacity discipline and growing margins of both airlines, achieved through product and network superiority.

QANTAS Domestic posted Underlying EBIT of $447 million, up 20 per cent. Unit revenue was up 8.6 per cent and load factor increased by 1.4 points to 78.7 per cent. The resources sector posted modest revenue growth for the first time since 2014. Jetstar’s domestic operations achieved a 7 per cent increase in unit revenue.

GROUP INTERNATIONAL

QANTAS and Jetstar’s international operations performed well in the face of higher fuel costs and increased competitor capacity.

Underlying EBIT for QANTAS International was lower, down 5.5 per cent to $222 million, however unit revenue increased slightly by 0.3 per cent. A capacity increase together with load factor increasing by 3.1 percentage points to 84.4 per cent lifted overall revenue by 7.3 per cent.

Jetstar’s international operations generated strong earnings, helped by the operating costs of the 787-8 but impacted by around $10 million from the Bali ash cloud disruption. Jetstar’s portfolio of airlines in Asia was profitable, driven by Japan and Singapore operations as well as a significant improvement in Jetstar Pacific’s performance as excess market capacity in Vietnam moderated.

LOYALTY

QANTAS Loyalty posted another record profit in the first half of $184 million, up 1.7 percent.

As previously flagged, the regulatory changes to interchange fees had some impact on revenue but this was offset by overall growth in other parts of the Frequent Flyer program to help deliver total revenue increase of 2.7 percent.  This included continued growth of the revised Woolworths program, new retail partners including Rockpool Dining Group, Hoyts and Uber, and growth in Qantas Cash and Qantas epiQure.

Also contributing to revenue growth were Loyalty’s new ventures, which are in-line with or outperforming their business cases. Qantas Assure had the highest rate of member growth in the health insurance sector [1] (opens in new window) and is well placed to continue this momentum with premium increases significantly below the industry average [2] (opens in new window).

QANTAS’ own Platinum credit card continues to have a rapid growth rate, with more than 1 billion points earned already, and a low fee card was introduced in December 2017 as part of the continued expansion into financial services. Overall growth of cards that earn QANTAS Points was 5.3 per cent compared with 0.05 percent growth in the rest of the market [3] (opens in new window).

QANTAS Business Rewards, which offers small business the ability to earn points on corporate expenses, continues to drive an increase in revenue from program partners and is also increasing market share for the airlines among small-to-medium enterprises.

Growth in these new ventures and the core Frequent Flyer program is expected to deliver a compound annual growth rate of 7–10 per cent for Qantas Loyalty in the five years to FY22.

FINANCIAL FRAMEWORK  

All targets of the Group’s financial framework were met or exceeded in the half.

Net debt continued to fall and remains towards the bottom of the range, at $5.1 billion. Sixty per cent of the Group fleet is unencumbered, including two new Boeing 787-9s purchased with cash. Debt maturity has been improved by an eight year, $350 million corporate debt program and short term liquidity remained strong at $2.8 billion.

Rolling 12-month return on invested capital was 20.9 per cent, with all operating segments delivering ROIC above their weighted average cost of capital. Net capital expenditure guidance for FY18 and FY19 is unchanged at a combined $3.0 billion, net of asset sales.

Operating cash flow increased by 48 per cent to reach a record $1.7 billion, providing excess capital for reinvestment and for returns to shareholders.

SHAREHOLDER RETURNS

The QANTAS Board has announced up to $500 million of capital to be returned to shareholders. This comprises an interim dividend of 7 cents per share (unfranked) to be paid on 12 April 2018 with a record date of 8 March 2018, as well as an on-market share buy-back of up to $378 million. This additional buy-back is expected to bring the total reduction of shares on issue to 24 per cent since October 2015.

INVESTING IN THE FUTURE

Jetstar Airways A320 order

Jetstar will start taking delivery of aircraft from its existing order of 99 A320 aircraft, beginning with 18 A321LR NEOs from mid-2020.

These next generation, longer range aircraft can fly routes like Melbourne and Sydney to Bali, currently operated by the Boeing 787-8 Dreamliner. The arrival of the first four long range NEOs will add capacity on these routes with potential to also free up some 787-8 flying time for use on other leisure routes such as Vietnam, China, Thailand and Hawaii.

All 18 A321LR NEOs are expected to be delivered by the end of 2022 to replace Jetstar’s oldest A320s for use on domestic and international routes, and will each deliver a fuel burn improvement of around 15 percent.

The QANTAS Group retains flexibility with the sequencing of the rest of its A320 NEO order, which is approximately an even split of 232-seat A321LR NEOs and 186-seat A320 NEOs. The order is primarily focused on aircraft replacement but with scope to allow for growth depending on market conditions.

QANTAS Group Pilot Academy

With fleet renewal and network growth, the QANTAS Group is undergoing the largest pilot recruitment and training initiative in its history.

Since 2016, the Group has hired almost 600 new pilots in Australia, with another 350 to be recruited by the end of this calendar year.

As part of creating an ongoing talent pipeline, the national carrier will establish the Qantas Group Pilot Academy in 2019. The academy will initially focus on training up to 100 new pilots per year for direct entry to the Group, but will explore the potential to become a major training centre to meet strong demand for pilots in the region. (See separate release.) It will represent an investment of up to $20 million of setup costs in FY19.

Investing in product

QANTAS has also announced additional investments in customer experience, including:

  • A complete redevelopment of its Sydney International Business Lounge, including reconfiguration of the existing floorplan to increase capacity by 30 per cent. (See separate release.)
  • An upgrade to the cabins of QantasLink’s 45 fleet of turboprop aircraft, used on regional routes. (See separate release.)
  • Continued rollout of domestic Wi-Fi at a rate of approximately one aircraft per week, with 22 Boeing 737s already internet enabled.
  • Ongoing development of Project Sunrise to achieve the goal of direct flights to London and New York from the east coast of Australia by 2022.

OUTLOOK

Looking forward, the Group expects healthy consumer demand growth consistent with an improved global outlook. The Group’s current operating expectations[4] (opens in new window) are:

  • Total QANTAS Group capacity is expected to increase by ~1% in 2H18[5] (opens in new window).
    • Group Domestic capacity expected to decrease by ~1%. Continued growth in unit revenue is expected.
    • Group International capacity expected to increase by ~2-3% compared with competitor capacity growth of ~5%[6] (opens in new window). Unit revenue growth is expected to continue.
  • FY18 fuel cost expected to be no more than $3.24b.
  • FY18 transformation benefits expected to be greater than $400million.
  • Capital expenditure net of asset sales expected to be $3.0b for FY18 and FY19 combined.

[1] (opens in new window) Source: Based on 12 months to June 2017. APRA Operations of Private Health Insurers Annual Report 2016-2017 and nib policyholder data.

[2] (opens in new window) Average Qantas Assure premium increase from 1 April 2018 is 0.48% compared with an industry average of 3.95% Source: as reported by Australian Government Department of Health; excludes the Australian Government Rebate.

[3] (opens in new window) December 2017 compared with December 2016. Source: RBA Credit and Card Charges Statistics.

[4] (opens in new window) For detailed outlook statement, please refer to Investor Presentation.

[5] (opens in new window) Compared to 2H17.

[6] (opens in new window) Compared to 2H17.

Copyright Photo: QANTAS Airways Boeing 787-9 Dreamliner VH-ZNA (msn 39038) LAX (Michael B. Ing). Image: 940396.

QANTAS Airways aircraft slide show:

 

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QANTAS Group announces a pilot academy

QANTAS will establish a pilot academy capable of training up to 500 pilots a year, to help meet the increasing need for skilled aviators in one of the fastest growing global industries.

The QANTAS Group Pilot Academy is expected to open its doors to students during 2019 and is likely to be established near an existing airfield in regional Australia to provide easy access to uncongested airspace. It will represent an initial investment of up to $20 million to establish the new facility.

QANTAS Group CEO Alan Joyce said the academy would become a critical part of the national carrier’s long term talent pipeline – and an important resource for Australian aviation.

“QANTAS has a proud history of having some of the best pilots in the world and we want to make sure it stays that way. By creating our own academy, we can train the next generation of pilots to the QANTAS Group standard.

“Boeing estimates the world will need about 640,000 more pilots in the next 20 years, with 40 per cent in the Asia Pacific region. That level of demand makes the academy important not just for QANTAS but for Australian aviation more broadly so that all parts of the industry have access to qualified pilots in a country that relies so heavily on air transport.

“Over time, we see potential for the academy to become a competitive advantage for Australia in the region. It could train pilots for other airlines and grow into the largest academy of its kind in the southern hemisphere,” added Mr Joyce.

The academy will initially train around 100 pilots a year for direct entry into the Qantas Group, including Jetstar and regional carrier, QANTAS Link. Depending on demand from other parts of the aviation industry, this could grow to 500 pilots a year on a fee-for-service basis.

The typical path for most students entering the academy will be high school and university graduates with strong academic performance. After up to 18 months of classroom, simulator and real-world flight training, students would then receive further training specific to the type of aircraft they will be flying before entering service as a First Officer on turboprop aircraft, sitting next to an experienced Captain.

Mr Joyce said that addressing the chronic gender imbalance among pilots – with a global average of 97 per cent males in the profession – would be key to meeting market demand.

“If we’re leaving out almost 50 percent of the population in our search for the next generation of 640,000 pilots, we’re clearly not tapping into all of the talent that’s available. As an industry, we need to do a much better job of encouraging women to become pilots and take up what is an exciting career path,” he said.

In late 2017, QANTAS announced the Nancy Bird Walton initiative – named after the pioneering Australian aviator – to improve on its 5 per cent proportion of female pilots. It commits the QANTAS Group to a 20 percent intake of qualified women in its 2018 Future Pilot Program (which is in line with the proportion of women in aviation courses nationally) and to reach at least 40 per cent over the next decade.

In establishing the academy, QANTAS will partner with one of several existing training providers. It will also engage with Federal, State and Territory governments to discuss possible locations.

Currently, the QANTAS Group sources pilots from a mix of new graduates from existing flying schools, pilots from general aviation and the military, and from other commercial airlines. This is expected to continue in order to provide the different levels of experience needed by the national carrier. An additional program to help mentor and then recruit the ‘best and brightest’ aviation students from five Australian universities was announced last year.  The Group has more than 3,500 pilots and plans to recruit a further 350 by the end of 2018.

QANTAS first had a pilot training school in the 1920s, shortly after the airline was established. Some of Australia’s earliest aviators were trained at its facilities in Brisbane and Longreach. Today, the QANTAS Group has a series of training facilities and flight simulators around the country as part of ongoing skills development for established pilots. Aspiring pilots wishing to express interest in finding out more about the academy can visit www.qantas.com/pilotacademy

Photo: QANTAS Group.

 

QANTAS refreshes its brand and livery, unveils the upcoming Boeing 787-9 cabins

QANTAS Airways refreshes its brand and livery

QANTAS Airways (Sydney) has just released this statement and images for its new updated 2016 livery:

qantas-2016-logo

Qantas has revealed an update to its iconic Kangaroo logo as part of preparation for the Boeing 787-9 Dreamliner (below) entering its fleet a year from now.

qantas-787-9-16fltqantaslrw

The change is only the fifth time the red-and-white image on the tail of Qantas aircraft has been updated since it was first introduced in 1944. The last update was in 2007 to coincide with the introduction of the Airbus A380 to the national carrier’s fleet.

Qantas Group CEO, Alan Joyce, revealed the new design together with the new Business Suites and Economy seats that will feature on the Boeing 787-9 to a hangar of around 1,000 employees and guests in Sydney.

787-9 Business Class Seats:

qantas-787-9-business-seats-qantaslr

787-9 Economy Class Seats:

qantas-787-9-economy-seats-qantaslr

“Since the image of a kangaroo first appeared on a Qantas aircraft more than 80 years ago, it’s come to represent the spirit of Australia. When passengers see the Qantas tail at airports around the world, it’s a symbol of home,” said Mr Joyce.

“We wanted to make sure our brand remained familiar but we also wanted it to be more modern and dynamic, like the 787 and like Qantas.

“When we looked at the history, we found that the logo has been updated around the time of a game-changing new aircraft joining the fleet. It’s a tradition that goes back to the Lockheed Constellation in 1947, the Boeing 747-300 in 1984 and the A380 in 2007.

qantas-liveries-through-the-years-qantaslrw

“A fresh brand helps symbolise the new era Qantas is entering as we head towards our centenary. It’s an era of new destinations, new technology and a new standard of service,” added Mr Joyce.

The new design was overseen by Qantas consultant designer, Marc Newson, in partnership with Australian design agency Houston Group.

Marc Newson, who has helped design Qantas’ lounges, the A380 cabin and the iconic Skybed, said:

“Aircraft tails are fantastic canvas to work on and the Qantas logo is one of the most recognisable in the world. This re-design aims to retain the fundamental essence of the flying kangaroo but also move the brand forward.

“This new brand is more streamlined and the shading behind the kangaroo gives a better sense of movement and depth. A silver band now extends from the tail to the rear of the fuselage, to give a more premium feel.

“The typography for the word Qantas, which measures almost two metres high on the 787, has been carefully streamlined. And Qantas will appear on the aircraft’s belly, so you can tell when it’s the national carrier flying overhead,” Mr Newson added.

In another link to the airline’s heritage, the classic winged kangaroo that appeared on tails across three decades will feature under the cockpit window and incorporate the individual name of each aircraft.

The new design will gradually appear across the Qantas network from today, starting with digital assets, signage and advertising. Inventory of other items – such as pyjamas – has been run down in preparation for the new logo. Updating branding on aircraft will be sequenced with scheduled re-paints, to be completed in time for the airline’s centenary in 2020.

The updated brand follows the introduction of new cabin crew uniforms in 2014 and new pilot uniforms, unveiled earlier this year, that roll out today.

qantas-2016-livery-changes-qantaslrw

NEW QANTAS BRAND – SUMMARY OF KEY DESIGN CHANGES ON OUR AIRCRAFT

  • A streamlined Kangaroo on the tail of the aircraft, with shading to give it a sense of depth and movement. The Kangaroo itself has been simplified for a cleaner, more modern look.
  • A silver band has been added to the rear of the aircraft, flowing from the tail through to the rear of the fuselage for a more premium feel and more contrast between the red tail and the rest of the aircraft.
  • A new, slimmer font for the world ‘Qantas’ on the side of the aircraft and the colour made slightly lighter.
  • The word Qantas is added to the belly for increased visibility when aircraft are flying overhead.
    Adding the Kangaroo to the inside curved edge of the wingtips so that they are in-flight and meaning they will also appear in pictures people take out the aircraft windows.
  • Replacing, centring and enlarging the Kangaroo that appears on outboard engine cowls, so that it is more prominent and identifiable.
  • Re-introducing the iconic ‘winged Kangaroo’ that featured on Qantas tails in the 1960s, 70s, and 80s by placing it under the cockpit window and integrating it with the aircraft name currently in this position (note: the actual aircraft names are unchanged).
  • The classic ‘Qantas red’ and white of the fuselage are unchanged.

Top Copyright Photo: QANTAS Airways Airbus A330-303 VH-QPJ (msn 712) SYD (John Adlard). Image: 935336. The pictured VH-QPJ is the first to wear the updated look and arrived at the Sydney base on October 27, 2016.

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QANTAS to introduce the Boeing 787-9 Dreamliner in 2017 with the first of eight aircraft

QANTAS 787-9 (07)(Flt)(QANTAS)(LRW)

QANTAS Airways (Sydney) will enter a new era of global opportunities, fuel efficiency and passenger comfort when the Boeing 787-9 Dreamliner joins the QANTAS International fleet from 2017.

QANTAS logo (large)

The national carrier will acquire eight Boeing 787-9s to gradually replace five of its older Boeing 747-400s on QANTAS International routes and open up a range of potential new city pairs. Four Boeing 787-9s will arrive in financial year 2018 and four will arrive in financial year 2019. This will leave the QANTAS Group with its six youngest reconfigured Boeing 747-400s.

Announcing the decision after a rigorous assessment process, QANTAS confirmed it had met the strict conditions for re-investment in a new long haul fleet type:

  • A return to strong profitability for Qantas International in financial year 2015, with the business reporting underlying Earnings Before Interest and Tax of $267 million – a turnaround of $764 million compared with financial year 2014 – and Return On Invested Capital above its cost of capital.
  • Net debt reduction of $1.1 billion since financial year 2013.
  • A competitive business case, including a new agreement with Qantas’ long-haul
    pilots. This agreement incorporates a 30 per cent productivity increase.

QANTAS will retain 15 further options and 30 purchase rights for additional Boeing 787s, with significant flexibility over the timing of delivery should they be exercised.

QANTAS will work with its team of internal experts and external designers to develop worldleading cabin interiors for the new Dreamliner. This will add to the aircraft’s unique features, including improved cabin pressure, larger windows and technology to reduce turbulence.

QANTAS Boeing 787-9 Fact Sheet: CLICK HERE

Top Image: QANTAS.

Image Below: QANTAS. The Boeing 787-9 Dreamliner flight deck.

QANTAS 787-9 Flight Deck (QANTAS)(LRW)

Video:

 

QANTAS Group weighs in after Australia orders the “two person” cockpit rule

QANTAS Airways (Sydney) has issued this statement after the Australian government mandated the “two people in the cockpit” rule for Australian carriers:

Following discussions with the Federal Government, regulators and industry, the Qantas Group will have two approved people in the cockpit at all times in-flight.

This includes Qantas, QantasLink, Network Aviation and Jetstar flights.

When one pilot needs to leave the cockpit for any reason, another authorised person will occupy the jump seat (as distinct from the control seats occupied by the Captain and First Officer) until they return.

This policy applies to aircraft with more than 50 seats. Of a total Qantas Group fleet of around 300 aircraft, this excludes Qantaslink’s fleet of 18 Q200s and Q300s, which generally operate on short sectors of one or two hours where the need for pilots to leave the cockpit is minimal.

Qantas Group flights have between two and four operating pilots on board, depending on duration and aircraft type.

The safety and health of customers and employees is the Qantas Group’s number one priority. We have a comprehensive safety management system that guards against risks to our operations.

There are numerous layers of screening and support for pilots, ranging from regular medical checks to stress management training and confidential counselling and pilot-to-pilot support networks.

Together with regulators and other airlines, Qantas will closely study any learnings that stem from the Germanwings tragedy to help make aviation even safer.

Our deepest sympathies are with the loved ones of all those on board flight 4U 9525.

Copyright Photo: SPA/AirlinersGallery.com. Airbus A380-842 VH-OQB (msn 015) climbs away from the runway at London Heathrow Airport bound for Sydney.

QANTAS Airways aircraft slide show: AG Airline Slide Show

AG Visit the new-look AG

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QANTAS Group reports a profit of A$206 million for the first six months

QANTAS Group (QANTAS Airways and Jetstar Airways) (Sydney) reported an underlying profit before tax of A$367 million ($286.6 million) and a statutory profit after tax of A$206 million ($160.8 million) for the fiscal six months ending on December 31, 2014.

CEO Alan Joyce commented on the results:

I am pleased to report the results so far of the fundamental business transformation that is underway at Qantas.

Qantas reported an underlying profit before tax of $367 million for the six months to December 2014, and a statutory profit after tax of $206 million.

This is a $619 million improvement over the same period last year at the underlying level.

The decisive factor in this result – our best half-year performance for four years – is our transformation program, which delivered $374 million in benefits in the first half.

Without the impact of transformation, Qantas would not be profitable today.

The other positive drivers in the results were:

$208 million from reduced depreciation;

$162 million from increased revenue per available seat kilometre;

$59 million from the removal of the carbon tax; and

$33 million from lower fuel prices.

This result confirms that we are executing the right plan with discipline and speed.

We are meeting, or exceeding, all our targets as we build a strong, sustainable future for Qantas and grow long-term shareholder value.

Since we announced our transformation program in December 2013 we have:

Lowered our cost base;

Grown free cash flow and revenue;

Improved fleet, product and service;

Strengthened customer satisfaction;

Reduced debt and strengthened the balance sheet;

Improved our return on invested capital;

Achieved our youngest fleet age in more than 20 years; and

Simplified the fleet from eleven to nine aircraft types, on the way down to seven.

What sets this program apart is that we are reducing costs permanently, while at the same time delivering Qantas’ best ever fleet, product and service.

We now have a strong foundation for sustainable growth.

I want to express my deep appreciation to the people of Qantas who have worked so hard to make this transformation succeed.

We have come together to protect this great Australian company and give it a sustainable future.

I also want to thank our customers.

We are delighted to repay their loyalty with even better Qantas experiences today, and more rewards to come in the future.

All parts of our business have contributed to this good result.

Qantas International was profitable for the first time since the GFC with underlying earnings of $59 million, a turnaround of $321 million over the same period last year.

Over the period it cut unit costs by almost 4 per cent while revenue increased by nearly 5 per cent.

The partnership with Emirates is now more than two years old and it continues to deliver.

We’ve seen exceptional customer satisfaction with our Dubai hub and increased range of destinations, which in turn has given us a significant competitive advantage.

With smarter fleet utilisation, Qantas has been able to offer new or additional capacity, including seasonal flights to Vancouver and additional services to LA, Santiago and Japan.

Our new A330 product and lounges in Singapore, Hong Kong, and Los Angeles have been met with acclaim.

In 2011 we set ourselves the task of getting Qantas International back into profit.

We expect to achieve that goal this year, on target.

Our domestic airline businesses performed well over the half – with total domestic profitability of just under $300 million.

The Qantas Group strengthened its position substantially in the domestic market.

Qantas Domestic reported an improvement of $170 million compared with the same period last year, with underlying earnings of $227 million.

With its unrivalled network, frequencies, lounges, and Loyalty program, Qantas Domestic retained an overwhelming 80 per cent revenue share of the Australian corporate market.

Looking at large corporate accounts, we recorded 113 renewals, 42 new accounts – with 16 of those won back from the competition – and just four lost.

Customer satisfaction with Qantas Domestic was at record levels in the December quarter.

The Jetstar Group continues to build scale and brand presence, flying to 66 destinations across 16 countries in the Asia-Pacific.

It reported underlying earnings of $81 million, an improvement of $97 million on the same period last year.

Domestically, Jetstar achieved earnings of $63 million, driven by improved yields and loads and a continued focus on managing costs and capacity

Strong Jetstar International earnings of $51 million reflected the benefits of a network restructure and the roll-out of the Boeing 787 Dreamliner.

Qantas’ investments in the Jetstar-branded airlines in Asia will generate long-term returns in the world’s most important emerging markets.

These airlines improved their performance in the first half, relative to the prior period, with a $13 million reduction in Qantas’ share of losses.

Jetstar Asia in Singapore was profitable in the December quarter.

Both Qantas and Jetstar have won a string of awards and recognition for product, service and safety.

Qantas Loyalty continued its outstanding performance.

With 10 per cent earnings growth, Loyalty achieved underlying earnings of $160 million.

It attracted more than 400,000 new members in the half, to reach a new high of 10.5 million.

Continued innovation and investment in programs like the online mall, Aquire, and Qantas Cash card, have helped grow, diversify and maximise the customer base. They have brought in a younger demographic, with 60 per cent of new members aged 36 or younger.

Qantas Freight delivered underlying earnings of $54 million, a strong improvement which was driven by significant recovery in the international freight market – outweighing a challenging domestic market.

Overall, this result demonstrates the continuing strength in our portfolio of integrated Qantas Group businesses.

The Group’s financial position improved significantly with more than a billion dollars in cash generated from operations for the half, up nearly 45% on the prior year.

The outlook for the Group’s operating environment in the second half of this financial year has improved after a turbulent period.

Demand is mixed in the domestic market and steady in the international market.

Importantly, market capacity – both domestic and international – is moderating and aligning more closely to demand.

Yield and load factors have stabilised and are in the early stages of recovery.

Lower fuel and Australian dollar values have, overall, improved our competitive position.

While fuel prices produced a modest benefit in the first half, we expect fuel costs for the full year to be no more than $4 billion at current prices – which will be a significant boost to the bottom line in the second half.

And we expect all operating segments to be profitable in the full year.

The results are good and we take pride in our progress so far.

Transformation has been central to our recovery and we will drive it forward with all our energy.

It is about making ourselves strong and resilient through the ups and downs of economic cycles.

Over the next two years we will further strengthen the Qantas position.

We will be a company able to withstand tough times, capitalise on the good times, and deliver sustainable and attractive long term returns to our shareholders.

We will be a stronger integrated Group portfolio where each business complements the others, generating sustainable returns through the cycle.

We will always be the airline that represents the best of the Australian way of life.

And today we can see a bright future for this great Australian company.

Thank you.

Read the full report: CLICK HERE

Copyright Photo: Airbus A380-842 VH-OQJ (msn 062) taxies to the gate at London’s Heathrow Airport.

QANTAS Airways aircraft slide show: AG Airline Slide Show

AG Prints-6 Sizes

QANTAS Link to start nonstop flights from Brisbane to Hamilton Island

QANTAS Link (Sunstate Airlines) (Brisbane) has announced it will start nonstop flights between Brisbane and Hamilton Island with four weekly roundtrips with 74-seat Bombardier DHC-8-402 (Q400) aircraft. The new route will launch on November 28 at the start of the summer season.

The QANTAS Group offers 40 roundtrip services a week to Hamilton Island from Sydney, Brisbane, Melbourne and Cairns.

Copyright Photo: Peter Gates/AirlinersGallery.com. Sunstate Airlines’ Bombardier DHC-8-402 (Q400) VH-LQF (msn 4375) prepares to depart from Brisbane.

QANTAS Link-Sunstate Airlines: AG Slide Show

Google Map: Hamilton Island is located off the tropical Queensland coast near the Great Barrier Reef.

Map - Hamilton Island

QANTAS – QANTAS Link routes from Brisbane:

QANTAS-QANTAS LINK 9.2014 BRISBANE ROUTE MAP

Video: Behind the scenes: