QANTAS annual result

[SilverSleuth]

This should be big alarm bells ringing for Q. Not a good result at all which such big money turning over. Now with numerous other low cost models around and another full service business product coming next year, they really need to start there middle management cutting.
Time to start focusing on the quality of the product again.
However with the irishman on the news last night saying this was a good result I think it may not have sunk in.

[Nutrageous]

The returns are pretty poor for sure...the profit on turnover would be about 2%. Still, are there any other airlines out there making lots of money at the moment? The whole industry always seems to tiptoe down the sideline of bankruptcy.

I'm just glad I sold my QF management bonus shares at just on $6.00 before I got out.

[-438]

It may not be a good return on capital. Welcome to the airline industry.
I think it is quite a good result when you compare it to airlines all over the world.
The next 2 to 3 years will be of most interest as the world especially Asian demand picks up. A big indication of the future of Qantas Group will be where the 787's are deployed.
I believe the logical choice is to paint them white and red and run them domestically replacing 767s as this is where the current yeild premium is. Along with the prospect of Virgin entering this premium market. Capital needs to be invested where it has been neglected for a number of years.
The A380s are extremely popular with passengers, they will keep arriving to replace older 744's. The dozen new 738s and first 15 new 787s will all have individual in seat entertainment and finally the employees will once again be proud to welcome people back on board. Customer satisfaction and on time perfomance will be sky high which in turn should flow on to international load factors.

[dizzylizzy]

The new 738's arriving, will they be destined for the VH fleet? Any ideas on delivery dates yet?

[ditzyboy]

I had read somewhere that Jetconnect was to get two batches of three (three more to go), then Australia would get existing Jetconnect aircraft as Jetconnect got new aircraft.

The aircraft that have been delivered so far were delivered to Qantas (Aust), with Australian registrations, prior to heading to Jetconnect and getting registered in NZ.

[packrat]

Cost Cutting For Profit

The problem with relying on cost cutting to keep you in the black is that you can only do it for so long before it totally undermines the service your business provides and the reputation it trades on.
Qantas has been cost cutting for 10 years..8 years too long

[breakfastburrito]

Joyce isn't yielding all the answers

Comment Tansy Harcourt

It was what Alan Joyce wouldn't say, rather than what did say,
that speaks volumes.

While Qantas Airways is busily preparing for a major growth
offensive through Jetstar, that very same low-cost unit has
flown into turbulence.

Although capacity at Jetstar grew in the second half compared
with a year earlier, underlying earnings before interest and
tax (EBIT) during that time fell 84 per cent to $10 million.

Joyce, usually a free-wheeling seller of the joys of Jetstar,
would not say by how much the yield had declined to get to
such a point. And to be fair, Jetstar is not alone in feeling the pain.
Virgin Blue is likely to have fared worse. The two are
struggling with the tough competition from Tiger Airways
and a drop-off in consumer spending.

The big difference is that the Qantas group may not have
needed to become quite so embroiled in the flight to the bottom
of the aviation market. There are serious question marks
over whether the group has gone too far with its Jetstar
expansion and has unnecessarily sacrificed its high-yielding
Qantas business for the gain of its low-yielding Jetstar business.

When Jetstar was started in 2004 the plan was fro the business
to be an attack dog, sent into Qantas's underperforming leisure
routes with a low-enough cost base to beat its rival Virgin on price.

Now, under Joyce's new plan to grow Jetstar 23 per cent in
the domestic market this year, the airline will have as many
available seat kilometers as Qantas.

It's all well and good for Joyce to be talking up Jetstars full-year
underlying EBIT of $131 million. What is not clear is whether
group profit would have been significantly higher if much of
that business had remained a Qantas Airways route.

After all, it is understood that the bulk if not all of Jetstar's
profitable routes are ones it inherited from Qantas, rather
than routes it started off its own bat.

For every percentage increase in capacity at Jetstar, what
does that do for the corresponding decrease in yield?

On thing's for sure, Joyce is certainly not saying.

AFR, Friday August 13, Page 41

[Sunstar320]

Mabye Jetstar should stop spending 100million a year on advertising.

[MyerFlyer]

Well on the plus side Joyce did mention the word growth several times for both QF mainline and JQ.

Hopefully some positive changes ahead.

[WorthWhat]

Calling all Analysts

With no dividend payable

What does every percentage increase in capacity at Jetstar do to Qantas’ yield?

Is a very good question Mr B.

Hopefully some smart analyst out there will crunch the numbers and let us mere shareholders know.