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Qantas back in black after stemming losses
[SYDNEY] Australian carrier Qantas on Thursday swung back into the black after a major shake-up to stem losses, posting a strong first half net profit helped by lower fuel prices.
The A$203 million (S$219 million) result in the six months to December 31 marked a stunning turnaround from a net loss of A$235 million in the same period in 2013.
Underlying profit before tax - the airline's preferred measure of financial performance - was A$367 million, compared to a loss of A$252 million previously which was driven by record fuel costs and fierce competition.
It comes on the heels of a cost-cutting drive that has seen thousands of jobs axed, aircraft deliveries deferred and growth at Asian offshoot Jetstar frozen.
Chief executive Alan Joyce said the result showed the group was executing the right plan.
"The decisive factor in our best half-year result for four years was our complete focus on the Qantas transformation programme," he said.
"It's clear that without the impact of transformation, we would not be announcing a profit today. 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.
"We are meeting or exceeding all our targets as we build a sustainable future for Qantas with an emphasis on growing long-term shareholder value." The result was driven by stronger earnings across all of the airline's divisions, with both domestic and international operations in profit.
It appears to vindicate Joyce's five-year strategy to slash A$2.0 billion in costs and axe 5,000 jobs amid a price war with domestic rival Virgin Australia.
The chief executive said the airline's financial position was significantly stronger because of this aggressive cost-cutting and it had given Qantas "a solid foundation for growth in earnings".