Jetstar $140m profit
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Jetstar $140m profit
Congrats to the staff at Jestar for this fantastic profit result. Who would have thought Jetstar would be propping up Qantas. My bet is more 330's to Jetstar and all of the 787's.
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Is the $140m profit produced by the same accountant that produces the Jetconnect profit.
What is more interesting is that Jetstar and Freq Flier are singled out, whilst other parts of the company are not. Why would this be??
What is more interesting is that Jetstar and Freq Flier are singled out, whilst other parts of the company are not. Why would this be??
Last year Simon Hickey head of the frequent flyer program said members redeemed 3.5 million seats thru the program Further 80% were on Qantas services. Id love to know what they pay for those seats. My guess only the direct cash costs that mainline pays out ie taxes and airport charges. Anyone know anything about this or is it just another grey area in the Qantas accounts?
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For the large number of aircraft JQ have I think it is actually a rather poor result. Its very low yield and not much profit for all the aircraft flying around everyday. If this was a stand alone company, the result is rather thin.
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Indeed. Although, REG reckons 3% more profit with 10% more passengers (surely someone can figure out the capacity increase) is good. Todays email to staff says ancillary revenue and cost cutting is key for future growth and investment.
Maybe the infamous "not profitable without muffins and coffee" comment might not be far off!
Maybe the infamous "not profitable without muffins and coffee" comment might not be far off!
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The Frequent Flyer Black Box
Dragon Man
Finally someone is looking at the right line on the P&L.
The FF program is the black box that allows QF management (and I use the word loosely) to move numbers around the group willy nilly and create an opaque backdrop for any numbers they care to throw at the market regarding QF long haul.
What happens to the numbers if FF buys tickets from QF at a market price for domestic and at a skeleton price for long haul redemptions? Of 3.5m seat redemptions, 80% redeemed on QF services = 2.8m. If only a quarter redeemed on long haul and sold across at $500 i/o $1,000 that would drain $350m out of long haul revenue into FF. These are of course only example numbers but one can instantly see the leverage here for manipulating numbers.
In order to make any meaningful analysis of long haul, one needs to see the percentage of redemptions dom vs long haul and the transfer pricing for each. If those numbers are put on the table alongside Joyce's pronouncements of long haul losses, then and only then will I believe what he says.
Finally someone is looking at the right line on the P&L.
The FF program is the black box that allows QF management (and I use the word loosely) to move numbers around the group willy nilly and create an opaque backdrop for any numbers they care to throw at the market regarding QF long haul.
What happens to the numbers if FF buys tickets from QF at a market price for domestic and at a skeleton price for long haul redemptions? Of 3.5m seat redemptions, 80% redeemed on QF services = 2.8m. If only a quarter redeemed on long haul and sold across at $500 i/o $1,000 that would drain $350m out of long haul revenue into FF. These are of course only example numbers but one can instantly see the leverage here for manipulating numbers.
In order to make any meaningful analysis of long haul, one needs to see the percentage of redemptions dom vs long haul and the transfer pricing for each. If those numbers are put on the table alongside Joyce's pronouncements of long haul losses, then and only then will I believe what he says.
Last edited by Traffic; 16th Feb 2012 at 07:16.
....am I the only one who could see the sarcasm dripping from the original post??? 
Nobody in this industry is fooled by Joyce's spin. Surely.
Nobody in this industry is fooled by Joyce's spin. Surely.
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Horatio, yes my thoughts too, I think the give away was in the last sentence.
Not a Troll, but the sarcism was probably a little too subtle for some.
"My bet is more 330's to Jetstar and all of the 787's."
Not a Troll, but the sarcism was probably a little too subtle for some.
"My bet is more 330's to Jetstar and all of the 787's."
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I agree. I don't think the thread is a serious one, just a good old fashioned 'piss-take'. Much like QF management.
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When QF is finally dead and buried (well done on killing an icon to all responsible) we'll see exactly how profitable Jetstar is.
With out all the subsidisation and transfer of business (read QF yield for a LCC) and Jetstar finding itself out in the jungle alone, the picture's going to look a whole lot different.
What a joke.
With out all the subsidisation and transfer of business (read QF yield for a LCC) and Jetstar finding itself out in the jungle alone, the picture's going to look a whole lot different.
What a joke.
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Problem with the current situation is that costs and profits are two easily 'hidden' and 'moved' between entitities at the will of those in charge to show exactly what they want to show. I guess the only reassuring thing about this whole set-up is that the 'group' entity is profitable. I suppose if in 5 years time if it is only the Jetstar brand left it will be profitable as it will be the 'group'.
What drives me insane about business in this modern era is that fact that a 'profit' is not good enough anymore!! Alan Joyce says Qantas is in trouble but after the year it has had (mainly due to his actions) it is actually kind of remarkable that it is still profitable although down 84 % (apparantly). Probably just enough to trigger some profit sharing for him whilst being a big enough drop to justify the cuts he is going to make.
We live in a weird world when a bank like ANZ can make massive profits and follow it up with thousands of job cuts because the 'increase' in profit was not big enough. When did it become the norm to see a business as a basket case unless it increased profit year on year, that is just not sustainable.
The Jetstar numbers are actually not great, a 10% lift in pax figures with only a 3% lift in profit. Read on further and it states that overall business costs where down 3% over the first half of the year, could this infact be where the increase in profit came from. Not sure it is a great model to only be able to really increase your profit off the back of cost cutting. It will have to meet in the middle somewhere when you cut too much are the whole thing will fall apart. Jetstar aren't far away from slashing and burning to the point of self destruction
What drives me insane about business in this modern era is that fact that a 'profit' is not good enough anymore!! Alan Joyce says Qantas is in trouble but after the year it has had (mainly due to his actions) it is actually kind of remarkable that it is still profitable although down 84 % (apparantly). Probably just enough to trigger some profit sharing for him whilst being a big enough drop to justify the cuts he is going to make.
We live in a weird world when a bank like ANZ can make massive profits and follow it up with thousands of job cuts because the 'increase' in profit was not big enough. When did it become the norm to see a business as a basket case unless it increased profit year on year, that is just not sustainable.
The Jetstar numbers are actually not great, a 10% lift in pax figures with only a 3% lift in profit. Read on further and it states that overall business costs where down 3% over the first half of the year, could this infact be where the increase in profit came from. Not sure it is a great model to only be able to really increase your profit off the back of cost cutting. It will have to meet in the middle somewhere when you cut too much are the whole thing will fall apart. Jetstar aren't far away from slashing and burning to the point of self destruction
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Exactly right AH
Staff would have more respect for them if only they'd be a bit more upfront with the facts instead of the constant never ending BS that is peddled.
Staff would have more respect for them if only they'd be a bit more upfront with the facts instead of the constant never ending BS that is peddled.
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What drives me insane about business in this modern era is that fact that a 'profit' is not good enough anymore!! Alan Joyce says Qantas is in trouble but after the year it has had (mainly due to his actions) it is actually kind of remarkable that it is still profitable although down 84 % (apparantly). Probably just enough to trigger some profit sharing for him whilst being a big enough drop to justify the cuts he is going to make.
I would suggest that looking at profit is not the real measure of a companies success anyway. I'd be wanting to know the return on investment/capital. Perhaps a more appropriate way of determining if you're making
a) A comparable amount of money to your competition
b) An appropriate return that makes investors want to do just that....invest.
Most investors should be happy with something in the range of 10-15% for an airline. Without me having to dig around, anyone know QF's latest figures?