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Qantas outlines pilot academy plans as profit soars
[SYDNEY] Qantas Airways posted a bumper 17.9 per cent jump in interim net profit on Thursday and announced a share buyback, while outlining plans to create one of the southern hemisphere's biggest pilot academies.
The Australian carrier's result came in at A$607 million (S$626.7 million), with a strong performance from its domestic arm boosting the bottom line.
Underlying profit before tax, its preferred measure, which strips out one-time costs, was the highest in its history at A$976 million in the six months to December 31.
The market welcomed the result, with Qantas shares jumping 6.45 per cent to A$5.61 soon after the open.
The result comes on the back of an aggressive efficiency drive that has included hefty redundancies, a shift away from loss-making routes and aircraft retirements, and despite rising fuel costs.
"We met, or exceeded, all targets of our financial framework," said chief executive Alan Joyce, adding that the carrier had "a lot of momentum behind us".
"Debt is towards the bottom of our target range. Every division is returning more than its cost of capital."
Qantas Domestic, the budget Jetstar group and its loyalty programme all reported record results, while its international arm "held its own in a market that is producing some extremely low air fares".
"This result shows what our previous record results have shown - we have a strong portfolio of businesses and the right integrated strategy for managing them," said Joyce."It 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."
The airline declared a final dividend of 7.0 cents and announced an on-market share buyback of A$378 million.
Profits were supported by a stellar showing in the local market, with earnings from the domestic arm of the business growing 20 per cent to A$447 million.
The international division slipped six per cent to A$222 million, while Jetstar jumped 16 per cent to A$318 million.
Globally, aviation is a growth industry and the demand for skilled personnel is booming with Boeing estimating that the world will need 640,000 more pilots in the next 20 years.
With 40 per cent of that anticipated demand in the Asia-Pacific, Joyce said the company would establish its first pilot academy to cash in, earmarking A$20 million to set it up.
"Right now, we're in the middle of the biggest pilot training and recruitment drive in Qantas' history," he said."But we want to make sure we have a talent pipeline that is charged well into the future - and keep our reputation for having some of the best pilots in the world."
Several other airlines have similar academies, including Emirates and British Airways.
"Ultimately, we expect the Qantas Group Pilot Academy to be one of the biggest in the southern hemisphere, capable of producing 500 pilots a year," said Joyce.