Qantas announces “confronting” annual results, writes down value of fleet.
Qantas ceo Alan Joyce has just revealed the company’s figures for 2013/14, with an underlying loss before tax of $646 million and a “non-cash fleet writedown” amounting to a whopping $2.6 billion. The overall statutory loss was $2.843 billion.
“There is no doubt today’s numbers are confronting, but they represent the year that is past,” he said, with the carrier’s transformation program creating a leaner and more sustainable Qantas Group.
The figures included $428 million in redundancies and $394 million in costs relating to early aircraft retirements.
Joyce also outlined the outcome of the company’s structural review. Qantas Loyalty will remain part of the group, while no new Jetstar ventures will be established while the company is focused on transformation.
And following the partial repeal of the Qantas Sale Act, the group will establish a new holding structure and corporate entity for Qantas International, creating the long-term option for this division to attract external investment.
“After an extremely difficult period, we are focused on building momentum with our turnaround in FY15,” Joyce said.
Qantas Domestic reported underlying EBIT of just $30 million – down from $365 million last year – due to market capacity increases ahead of demand, weaker resources and government sectors, unrecovered carbon tax costs and “price pressure in all industries.”
Qantas International’s underlying EBIT loss was $497 million – more than twice last year’s $246 million loss.
And Jetstar also reported an underlying EBIT loss of $116 million, a big reversal from last year’s $138m underlying profit.
Qantas Loyalty was a bright spot, reporting a fifth straight year of double-digit earnings growth to a record underlying EBIT of $286 million, up from $260 million in FY13, while Qantas Freight’s result was an underlying EBIT of $24m, down from $36m last year.
Joyce said the group expects a return to an Underlying Profit Before Tax in the first half of FY15, subject to the repeal of the carbon tax, reduced depreciation costs, stable fuel prices, $300m in transformation benefits and “a stabilising operating environment.”
More information in today’s Travel Daily.