QANTAS profit.
 

Qantas has announced its expecting a massive jump in profits for the first six months of 2016, and a new deal with Woolworths around frequent flyer points.

In a market update, the airline said it expects first-half pre-tax profit to be in the range of $875 to $925 million, compared to a profit of $367 million posted in the first half of financial year 2015.

Qantas said a combination of falling oil prices and its cost-cutting program had helped lift margins.

"We've seen improved revenue in our domestic and international operations [and] reduced costs," said the airline's chief executive Alan Joyce in a statement to the ASX.

Mr Joyce said the airline is focussed on delivering the best service to customers.

Qantas is also expecting a record half-year result from its loyalty program.

In a separate announcement, Qantas and Woolworths have renewed their frequent flyer points partnership for another three years.

Woolworths Rewards members will be able to claim Qantas points starting in the first half of 2016, with 10 Woolworths dollars worth 870 Qantas points.

The supermarket giant suffered a large consumer backlash recently when its previous Qantas points system was scrapped in favour of 'discount dollars'.

Despite the apparent good news, both companies have seen a subdued reaction from investors.

Qantas shares were up 0.5 per cent to $3.80 by 10:50am (AEDT), while Woolworths was 0.4 per cent higher at $22.69, in a broader market up 0.5 per cent.

That's fantastic news .
How fortunate to have such passionate and committed management to turn things around for staff . X x

Amazing what a bout of cheap fuel can do for an airline :)

So with all the money rolling in, why are they delaying purchases of more B789s?

Don't want to spook the market by announcing 40+ new airframes. Better to just announce 8 every year for the next 5-6 years.

But didn't Alan say there wouldn't be any further B789s for another 3 years, & excess profit would instead be given back to shareholders?

You can bet that the board remuneration will get a nudge.

Becker. 3 years is 2018. That's when the last of the first 8 arrive. He's being entirely consistent with his previous comments and leaving space for more orders later on.

I've said it before and I'll say it again. There is an underlying narrative at play in all of this. You need to look through the words and find the nuance and the mental gymnastics that allows them to do something that at first glance appears contrary to previous utterances when in reality the previous utterances allowed a very significant amount of wriggle room.

Keg you are living in a dreamworld! The only reason Qantas is making money is creative accounting and low fuel prices! The revenue at the moment is coming from mainline. Nowhere else. Cost of operation of a B789 is 17.8 cents per kilometre and the B744 is 79 cents per kilometre. Why is any planet you care to mention would you spend a cent more on Jetstar? Even the B788 should be back in mainline routes yesterday. Big mistakes have been made by this board and they are covering it up before any personnel changes can occur.

And also why would Qantas give up on revenue with revenue sharing deals with AA when they could be earning 100% with new aircraft and of course no-one will tell you that the EK deal is a crock! Normal code-share deals are 27%(IATA agreed rates in case of breakdowns). Up until December 2014 QF was getting 18% and then EK said it is "now 10% and sue us!". That is why the standard answer to any queries is "that is commercially sensitive".

900 million profit nice one, but surely it's going to hurt paying the tax on that?

What's the going rate now 28%. Nice lump sum payment to the government of just under $300 million...

Oh but wait-that's right they don't pay tax............. Only bonuses

Did someone mention fuel surcharge , thieves

Perhaps it's always been about a whole load of lies? I'd suggest so.

busdriver007. WTF? Yeah. I know Qantas is making money because of low fuel and I agree there's probably been some creative accounting along the way- including accelerated depreciation of assets to create a big loss.

The increased profit is also due to things like more efficient use of aeroplanes, more capacity into Asia, more focus on mainline (e.g. OOL, HMI, advertising, etc). These are things that many here on PPRUNE and Qrewroom have been talking about for years.

I'm not sure how all that accounts to 'living in dreamworld'. Qantas has been quite open about the time frame for 787s for mainline and the various hurdles. I suspect that one of AJ's KPIs is the share price. He knows that tanks if he announces a deal for 40-50 aeroplanes. Therefore he's ordering 8. Then he'll order another 8 every year for another 5 as 'market conditions continue to hold' or whatever corporate speak they choose to use to justify the decision.

The cost to operate the 787s may be the amount you quote (I wouldn't know so I'll take your numbers) but the cost to finance the jet is quite high also- and that's just the $$$ without taking into account the affect on share price, cash flow, etc. On the other hand the 744s are fully depreciated (or significantly so) and only cost the amount to operate.

I agree that big mistakes have been made. I also agree that these mistakes are being nicely hidden by a lower fuel price. However AJ et al are the only game in town. It helps to read between their lines to understand what the future may hold.

Is there still a surcharge? I thought they got rid of it and wrapped it all up within the ticket price?

Happy New Year all. 2016 is at least shaping up as a better year for some of us than 2015 was!

Keg you would do well in Qantas Management, you believe everything you hear from the current QF people, and to answer your question yes the fuel surcharges are still in place(where is the ACCC?). Mind you I suggest Slater & Gordon may arrest their share price slide as they are party to a class action against Australian Airlines including Qantas.

And yes they have to focus on mainline because that is where the profit is!

The numbers are feely available, you must know where to ask!

Alan Joyce created the "Burning Platform" and the pilots, along with everyone else, fell for it.

Qantas folds fuel surcharges into base fares, will not reduce overall pricing | Australian Aviation

Direct entry Captain
 

Could anyone suggest hotel accommodation in Sydney for two nights, March 2016, not too far away from Wollomooloo area, for my airline interview.
Kind thanks Grottyottie

Lol. Those who know me know differently.

So is the fuel surcharge removed or not? I thought it had been removed and everything rolled into the airfare and you say it still exists.

Then you link to an article that suggests Qantas has done exactly what I thought was the case. So have they gotten rid of it and rolled into the airfares or does it appear as a separate charge?if it's rolled into the airfare and not separate then I'm not sure what the ACCC is going to do. Fine Qantas for turning a profit?

[QUOTE][And yes they have to focus on mainline because that is where the profit i/QUOTE]

We are in furious agreement on that one. Shame it too them the first 5 years of AJ's tenure to work it out.

Fuel surcharges are now in the base fare for most markets (HKG may be different by law)

I'm off until Monday so I can't check if Nth America has inclusive pricing or not

Chris2303,

Before:
'http://www.cad.gov.hk/english/pdf/Fuel_Surcharge-2102.pdf'
http://www.cad.gov.hk/english/pdf/Ca...Surcharge2.pdf

After:
No more fuel surcharge with effect from 1 Feb 2016