Category Archives: 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.

ag-airline-aircraft-photo-gallery

ag-airline-aircraft-slide-show

ag-better-airline-aircraft-gallery

 

Advertisements

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

AG Print Sizes

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:

 

QANTAS loses a record $2.6 billion for its fiscal year, outlines its fleet plans

QANTAS Group (Jetstar Airways and QANTAS Airways) (Sydney) is changing its corporate organization in the wake of a large (record) financial loss of A$2.8 billion ($2.6 billion) for its fiscal year. The company hopes to attract new foreign investors with these changes.

The main changes is the creation of a holding company that will manage separate domestic and international divisions.

The company also performed a major write down of the value of its aircraft due to currency fluctuations in the past when the aircraft were purchased.

The company issued this full financial report (all figures are in Australian dollars) and its fleet plans.

QANTAS Group has announced an Underlying Loss Before Tax of $646 million and a Statutory Loss After Tax of $2.8 billion for the 12 months ended 30 June 2014.

The Underlying PBT result was driven by the cumulative impact of two years of industry capacity growth ahead of demand, leading to a $566 million decline in FY14 revenue, and by record Australian dollar fuel costs of $4.5 billion – up $253 million from FY13.

In response, QANTAS is driving an earnings recovery and de-leveraging the Group’s balance sheet to shape a profitable future and build long-term shareholder value.

The $2 billion accelerated QANTAS Transformation program announced in February is permanently reducing costs and laying the foundations for sustainable growth in earnings.

Transformation benefits totalled $440 million in FY14, including $204 million of second-half benefits from the accelerated QANTAS Transformation program.

A further $900 million of accelerated transformation projects are in the implementation phase, with more than $600 million of benefits from these projects to be realised in FY15.

To date, projects equivalent to more than half the $2 billion target have been delivered or are underway.

Unit costs were reduced by 3 per cent over the year, accelerating from a 2 per cent reduction in the first half to a 4 per cent reduction in the second half.

QANTAS CEO Alan Joyce said the underlying result had been foreshadowed at the Group’s half-year announcement in February.

“There is no doubt today’s numbers are confronting, but they represent the year that is past,” Mr Joyce said.

“We have now come through the worst. With our accelerated QANTAS Transformation program we are already emerging as a leaner, more focused and more sustainable QANTAS Group.

“There is a clear and significant easing of both international and domestic capacity growth, which will stabilise the revenue environment.

“We expect a rapid improvement in the Group’s financial performance – and a return to Underlying PBT profit in the first half of FY15, subject to factors outside our control.”

Significant one-off costs associated with QANTAS Transformation are recognized in the statutory result, including restructuring and redundancies ($428 million) and primarily non-cash costs relating to early aircraft retirements ($394 million). Of the 5,000 redundancies announced in February, 2,500 have been implemented as at August 28.

At the same time as delivering cost reduction, the Group has taken action to adjust its capacity and network in response to shifts in demand and the competitive environment – while retaining flexibility to make further adjustments if required.

International competitor capacity growth is expected to be 2.4 per cent in the first half of FY15 and domestic market capacity growth is expected to be around 1 per cent, significantly below recent trends for both markets.

Financial Position

Group liquidity at June 30 was $3.6 billion, comprising $3 billion in cash – up around $600 million from the half-year – and $630 million in undrawn committed facilities. With operating cash flow of $1.1 billion, the Group was net free cash flow neutral in FY14.

The Group significantly extended its debt maturity profile through two landmark bond issuances totalling $700 million, with no major unsecured refinancing required before April 2016. Net debt including operating lease liability was reduced by $96 million.

Overall capital investment has been reduced to maximise net free cash flow for debt reduction, while the Group has maintained targeted investment in fleet, product and service to sustain brand and yield premiums for Qantas and Jetstar.

Capital investment was $874 million in FY14. Planned capital investment in FY15 has been reduced from $800 million to $700 million, with a forecast of $800m in FY16.

The Group’s average fleet age remains at a 20-year low of 7.7 years, with 35 per cent of the fleet debt-free. Thirty-one new debt-free aircraft have been added since FY10, including seven in FY14.

Outcome of Structural Review

QANTAS today also announced the outcomes of the structural review that commenced in December 2013.

The Group has identified, valued and will continue to assess opportunities to sell non-core assets such as airport terminals, property and land holdings. Any proceeds from such sales will be used to repay debt.

After detailed strategic and structural assessment of QANTAS Loyalty, the decision has been made to retain this highly valuable business within the existing Group structure. It was determined that there was insufficient justification for a partial sale. QANTAS Loyalty continues to offer major profitable growth opportunities.

No new Jetstar ventures will be established while the Group is focused on transformation. Substantial value exists across the Jetstar Group airlines, to be realised over time.

Since 2012, QANTAS’ international and domestic airlines have reported their financial performance as separate segments, to strengthen accountability and performance. Following the partial repeal of the QANTAS Sale Act, the Group will establish a new holding structure and corporate entity for QANTAS International. This decision will create the long term option for QANTAS International to attract external investment and participate in partnership opportunities in the international aviation market, with a view to achieving efficiencies and improved returns to shareholders.

Fleet write down

Under accounting standards, the decision to establish a new holding structure and corporate entity for QANTAS International requires a change to QANTAS’ Cash Generating Units (CGUs) for impairment testing. The previous ‘QANTAS Brands’ CGU has been split into four separate CGUs: QANTAS International, QANTAS Domestic, QANTAS Loyalty and QANTAS Freight.

After being tested on a standalone basis for the first time, the QANTAS International CGU requires a write down of $2.6 billion. The size of the write down is largely due to the historic cost of aircraft purchased with an average exchange rate from Australian dollars to U.S. dollars of $0.68.

This writedown is a non-cash charge, recognised in the statutory result, with no cash impact on the Group’s or QANTAS International’s operations. It is a writedown to the carrying value of aircraft that QANTAS has no intention to sell and intends to retain in its fleet.

Following the write down, the carrying value of QANTAS International aircraft will be more reflective of the current market value of the fleet, and future depreciation expense will be approximately $200 million per year lower as a result of this change.

CEO Comment

Mr Joyce said the Group’s priority now was to push forward with the accelerated QANTAS Transformation program after a positive start.

“After an extremely difficult period, we are focused on building momentum with our turnaround in FY15,” Mr Joyce said.

“Our cash balance and liquidity position is strong, and the Group’s overall financial performance is rapidly improving. We are removing costs to drive earnings growth. And the work we’ve done over recent years to renew our fleet and improve service has been recognised with a string of awards and record customer satisfaction.

“In February we made a deliberate choice to continue investing in core initiatives for customers in order to hold our competitive position, keep our brands strong and maintain a yield premium in a challenging market. As we transform our business at pace, our airlines are providing better service than ever.

“The structural decisions we announce today give the Group maximum scope to attract capital in a fiercely competitive international aviation market. Standing still while the world changes around us is not an option.

“With our structural review complete, we can move forward with certainty.”

Breakdown of Results

QANTAS Domestic

QANTAS Domestic reported Underlying EBIT of $30 million, down from $365 million in FY13.

Group Underlying EBIT, including QANTAS Domestic and Jetstar’s domestic operations, was just below $50 million.

The earnings deterioration in FY14 was a result of market capacity increases ahead of demand, weaker demand in the resources and government sectors, price pressure in all industries, unrecovered carbon tax costs and an unfavourable fuel cost of $68 million.

In this volatile market, QANTAS Domestic’s strategy of maintaining a capacity, frequency and product advantage over the competition saw it remain Australia’s premium carrier of choice.

The airline held an 80 per cent share of the domestic corporate travel market by revenue, including 48 new accounts, eight accounts won back from the competition, 10 accounts lost and 182 accounts renewed.

Comparable unit costs were reduced by 3 per cent as QANTAS Transformation benefits began to flow, helping close the cost gap with the competition.

Both customer satisfaction and customer advocacy were at record levels in FY14, helped by QANTAS Domestic’s consistently superior on-time performance.

QANTAS Domestic was Australia’s most punctual major domestic airline every month in FY14 and, as at June 2014, had led the competition for 18 straight months – a key factor in winning and retaining corporate accounts.

QANTAS International

QANTAS International reported an Underlying EBIT loss of $497 million, compared with a loss of $246 million in FY13.

The business delivered another strong year of cost reduction, cutting comparable unit costs by 4 per cent, and has now realised more than $400 million of transformation benefits over the past two financial years. However, these benefits were offset in FY14 by competitor capacity growth of 9.5 per cent – well above demand – and record fuel costs.

Fuel price and foreign exchange movements hit Qantas International hardest of any of the Group’s businesses, with an impact of $142 million.

Between FY09 and FY14, competitor capacity growth in the Australian international market was 44 per cent, compared with global growth of 29 per cent. Importantly for the Group’s outlook, capacity expansion is now slowing, with expectations for competitor growth of 2.4 per cent in the first half of FY15.

By optimizing its network and fleet, including the retirement of older Boeing 747s, QANTAS International is cutting unit costs while improving the travel experience for customers. Retiming the QF9/10 services to Dubai and London, for example, has freed up an A380 to operate on the popular Dallas/Fort Worth route and will lead to a significant increase in asset utilization.

Customer satisfaction reached record levels in FY14 and customer advocacy was a record for the year. New lounges were opened in Singapore, Hong Kong and Los Angeles, while new and expanded codeshare agreements were struck with China Southern, LAN Airlines and Bangkok Airways.

These agreements complement the ground-breaking QANTAS-Emirates partnership launched in FY13. The Dubai route continues to receive the highest customer satisfaction anywhere on the QANTAS International network, with more than 2 million QANTAS customers having already travelled through the hub since the partnership was launched.

QANTAS International now offers its biggest ever global network, with 1,200 destinations available with Qantas and its partner airlines.

Jetstar Group

The Jetstar Group reported an Underlying EBIT loss of $116 million, down from Underlying EBIT of $138 million in FY13.

Controllable unit costs were reduced by 2 per cent. However, these gains were offset by an unfavourable fuel cost of $86 million, a yield decline of $113 million across the highly competitive South East Asian and Australian markets and an increase in associate start-up losses of $20 million. Total associate start-up losses in Asia were $70 million due primarily to the rapid expansion of Jetstar Japan as it consolidates its leading LCC position in the Japanese domestic market.

Jetstar’s domestic business in Australia remained profitable – as it has been every year since launch in 2004 – and continued to play its part in the Group’s successful two-brand strategy.

Customer satisfaction remains at record levels in Jetstar Airways’ domestic and international operations, helped by continued improvement in on-time-performance and the introduction of the Dreamliner on key international routes, including Bali, Phuket and Bangkok.

The Jetstar Group airlines in Asia, in which QANTAS is a minority investor, remain focused on distinct market priorities:

Growth at Jetstar Asia has been suspended in a very challenging Singapore market that saw capacity expand by 23 per cent in FY14, but the business made productivity gains, holds a substantial yield premium to its LCC competitors, and is ranked the nation’s leading LCC. Its performance is expected to improve as capacity growth moderates, with market correction already underway.

Jetstar Japan is Japan’s largest and fastest growing LCC, having carried over 5 million passengers since launch and opened a second domestic base in Osaka. The launch of operations from the second base is improving unit cost performance, as a result of increased asset utilisation from the 24-hour airport in Osaka. With LCCs still holding just 6 per cent of the Japanese domestic market, the business has significant growth potential.

Vietnam’s Jetstar Pacific cut unit costs and increased customer advocacy in a high-growth market. The business has completed its recapitalisation, has begun international services and will expand its fleet from 7 to 10 aircraft by December 2014.

The Board and management of Jetstar Hong Kong continue to work with local regulators towards gaining approval to begin operations.

QANTAS Freight

QANTAS Freight reported Underlying EBIT of $24 million, compared with $36 million in FY13.

Earnings were lower as a result of the sale of Star Track Express in FY13, while global air cargo markets remained challenging. However, the integration of Australian air Express with Qantas Freight is now complete and full run-rate benefits began to flow in the second half of FY14.

Outlook

The Group expects a return to an Underlying Profit Before Tax in the first half of FY15, subject to factors outside its control.

This is based on the following expectations:

A target of $300 million of Qantas Transformation benefits to be realised in the first half.

A stabilising operating environment, as market capacity growth subsides.

First half fuel costs in line with the first half of FY14.

The repeal of the carbon tax.

Reduced depreciation costs compared with the first half of FY14.

Fleet Update:

The QANTAS Group provided an update on its fleet and network strategy for FY15 and beyond.

Since FY09, the Group has taken delivery of more than 140 aircraft and retired or returned leases for 80 aircraft, resulting in an average fleet age of 7.7 years – the youngest for two decades and significantly below the average in North America, Europe and the Asia Pacific.

The Group’s focus now is on maximizing the advantages of this young, competitive fleet, and completing the retirement of older aircraft types.

QANTAS CEO Alan Joyce said the Group’s fleet strategy was based on clear, consistent principles:

Increasing fleet utilization in the international and domestic markets.

Putting the right aircraft on the right route.

Offering the best experience in every market for customers.

Realising the cost benefits of new-generation aircraft.

Fleet and Network Changes

Key fleet and network changes completed or announced during FY14 are as follows:

QANTAS International

A more than 5 per cent increase in asset utilization by QANTAS International, including the retime of Melbourne-Dubai-London services and allocation of an Airbus A380 to the Dallas/Fort Worth route from September 2014.

Gradual replacement of Boeing 747s with A330s on routes to Asia, with all Sydney-Singapore and Brisbane-Singapore services to be operated by A330s by the end of September 2014.

Early retirement of four Boeing 747-400s, as the Group works towards the retirement of all non-reconfigured Boeing 747-400s by early 2016. This will leave nine, newer Boeing 747-400s fitted with A380-standard interiors.

Four Boeing 787-8s delivered to Jetstar, allowing the transfer of three A330-200s from Jetstar to QANTAS Domestic.

QANTAS Domestic

Planning for a reduction in average ‘turn time’ for QANTAS Domestic aircraft to increase utilization, to be implemented during FY15.

The announcement that all the Group’s Boeing 737-800s will be refurbished from mid-2015, expanding total Boeing 737-800 capacity by 3 per cent, along with improvements to inflight entertainment systems.

Retirement of all older Boeing 737-400s (completed in February 2014).

Early retirement of seven Boeing 767-300s, with all aircraft of this type to go by the end of 2014. Current fleet size is 10 aircraft.

More targeted use of QANTAS Domestic’s bigger A330-200s to reflect demand, with a focus on East-West routes to Perth and peak East Coast services.

All of Network Aviation’s seven Brasilia turboprop aircraft have been retired (effective August 2014).

Network aviation now has a single fleet of 12 Fokker F100 jets.

Fleet Renewal and Simplification

In FY14 the Group took delivery of 23 new aircraft, retired 19 older aircraft and returned eight leases.

Under current plans for FY15 the Group will receive 10 new aircraft, retire 18 aircraft and return two leases.

As a result of ongoing fleet retirements and simplification, the Group’s mainline fleet will be reduced from 11 different types in FY13 to seven different types in FY16.

Restructured Order Book

The Group announced in February that more than 50 aircraft on order would be deferred or sold to reflect more efficient fleet utilization and slower capacity growth.

In light of the more subdued domestic capacity outlook and shift to more efficient utilization of narrow-body aircraft:

Two QANTAS Boeing 737-800s, including one sourced from the domestic fleet and one from the trans-Tasman fleet, will be sold during FY15.

A decision has been taken not to renew the leases on two QANTAS Domestic A330-200s, meaning these aircraft will leave the fleet in the first half of FY16.

Five Airbus A320ceos on order for Jetstar Airways have been sold, reflecting the more subdued outlook for domestic capacity in FY15.

Two QANTAS Link Bombardier Q300s will be sold during FY15.

In addition:

Orders for 21 Airbus A320ceos have been deferred by four years and converted to orders for 21 of the more-fuel-efficient A320neos, meaning that the Group has orders for a total of 99 A320neos.

The Group has pushed back the first of its 50 Boeing 787 options and purchase rights from 2016 to 2017, in line with the completion of the accelerated QANTAS Transformation plan.

As previously announced, the Group has deferred the final eight Airbus A380s on order for QANTAS International, with an ongoing review of delivery dates to meet potential future requirements.

As previously announced, the Group has deferred the final three of 14 Boeing 787-8s on order for Jetstar.
The Group retains significant flexibility in arrangements with manufacturers and lessors should the competitive environment or capacity forecasts change substantially.

Copyright Photo: John Adlard/AirlinersGallery.com. QANTAS is now planning for an early retirement of seven Boeing 767-300s. All 767s will be gone by the end of 2014. The current 767-300 fleet size is 10 aircraft. Boeing 767-338 ER VH-OGD (msn 24407) arrives at the Sydney hub.

QANTAS Airways: AG Slide Show

Jetstar Airways (Australia): AG Slide Show

QANTAS unveils a new Aboriginal and Torres Strait Islander special livery

QANTAS Link-Sunstate DHC-8-400 VH-LQM (14-RECOGNISE)(Tail)(QANTAS)(LRW)

QANTAS Airways (Sydney) has unveiled a new Aboriginal and Torres Strait Islander special color scheme on Bombardier DHC-8-402 (Q400) VH-LQM (msn 4450) operated by QANTAS Link partner Sunstate Airlines: QANTAS issued this statement and photos:

QANTAS has joined the movement to recognise Aboriginal and Torres Strait Islander peoples in the Australian Constitution by unveiling a new QANTAS Link Q400 aircraft showcasing a large RECOGNISE logo on its livery.

In addition to the aircraft livery unveiled at today’s event, QANTAS Link will soon embark on displaying a smaller version of the RECOGNISE logo on its entire fleet of 31 Q400 aircraft, ensuring the message is spread across the country.

About RECOGNISE

RECOGNISE is the movement of Australians campaigning for the recognition of Aboriginal and Torres Strait Islander peoples in the Australian Constitution and to ensure there is no place for discrimination in our founding document. The movement has wide support from across the political spectrum and in the Australian community from grassroots supporters and many major institutions, non-government organisations, companies, sporting codes and faith groups.

About QANTAS’ commitment to Aboriginal and Torres Strait Islander Australians:

QANTAS has a longstanding commitment to value Aboriginal and Torres Strait Islander heritage, cultures and peoples and to recognise the original custodians of Australia. A Reconciliation Action Plan has been in place since 2007 and QANTAS currently holds partnerships with the National Centre of Indigenous Excellence, Career Trackers, Bangarra Dance Theatre, Clontarf, the Indigenous Marathon Project, Supply Nation, Engineering Aid Australia, Jawun, Lirrwi Yolngu Tourism Aboriginal Corporation, the Yothu Yindi Foundation, the Australian Indigenous Education Foundation and RECOGNISE.

Copyright Photos: QANTAS Airways.

QANTAS Airways: AG Slide Show

QANTAS Link-Sunstate DHC-8-400 VH-LQM (14-RECOGNISE)(Nose)(QANTAS)(LRW)