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REPORTING SEASON: Qantas Airways Limited (QAN)

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Figure 1: Qantas Airways Limited 12 month chart

 

Qantas (QAN) Australia’s largest airline, announced a $252 million loss for the 6 months to the end of 2013, slightly better than the $277.5 million loss the market expected.

The loss was driven by; tight competition, low returns and demand in its international business, higher fuel costs and the set up cost incurred for Jetstar Asia.

QAN said it will cut 5,000 full-time equivalent positions by the end of 2017- this includes the 1,000 job cuts Qantas announced to the market back in Dec 2013.

The company wide redundancies will cost around $500 million and 1, 500 management jobs will go.

Qantas has placed a wage freeze for all staff until the company returns to profit.

Expenses increased by 2% to $8.1 billion, as Qantas spend more on fuel, up 3%, and increased costs from associates up 63%, mainly the start-up cost for Jetstar Japan & Hong Kong.

QAN said it will not put any more cash into Jetstar Asia at this stage.

Qantas International posted an underlying EBIT loss of $262 million, compared to a $91 million loss in 1H12.

Qantas freight revenue lifted by 5% to $500 million while its charter operations lost money and passenger revenue fell 4%.

QAN will defer delivery of 3 new Boeing 787-8 Dreamliners and 8 Airbus A380s, and it will stop non performing air routes, it also announced the sale of its long term lease at Brisbane Airport.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,