Australia’s Qantas Airways yesterday announced a 4.3 percent drop in full-year net profits, but voiced cautious optimism for the industry after its battering in the financial crisis.
Net profits were A$112 million (US$101 million), down from A$117 million a year earlier, while underlying pre-tax profits rose three-fold to A$377 million after last year’s massive cost-cutting.
“While global trading conditions remained challenging, they continued to improve and the Qantas Group has delivered a strong result, more than tripling its full year profit year-on-year,” chief executive Alan Joyce said.
PHOTO: BLOOMBERG
“International demand and yield across the business and leisure sectors continue to improve and domestic business demand is also strengthening,” he added.
Joyce said all sectors of the group, including budget offshoot Jetstar, were profitable and that the company expects to increase capacity in the first half of next year.
However, Qantas did not pay a dividend to shareholders for the second year running and declined to forecast future profits “given the volatility and uncertainty of the aviation market.”
Joyce said the company, which pledged to dramatically slash costs as profits dropped 88 percent last year, was seeing “encouraging signs” as freight and premium travel pick up.
“We are seeing some very good signs of improvement. Our freight business has seen a real improvement and our premium business has seen a recovery,” he told public broadcaster ABC.
“We’ve seen some very encouraging signs. We’re starting to become more optimistic about the future,” Joyce added.
The Qantas group controls about two-thirds of the domestic market and some 30 percent of international passenger flights in Australia.
Joyce said a “high level of uncertainty” remained, but conditions had vastly improved since the slowdown, despite renewed jitters over growth in Europe, China and the US.
“There is still a high level of uncertainty ... but we’ve seen a big improvement from the depths of the GFC [global financial crisis],” Joyce said.
“We’ve seen the freight market rebound, our freighters have had a record year, which is a good sign of business activity, and our premium traffic is rebounding,” he said.
Revenue fell 5.4 percent to A$13.8 billion dollars, while Qantas retains a cash balance of A$3.7 billion.
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