Aviation
Qantas profits fall by 17 per cent to $852 million, buyback scheme launched: Qantas financial results 2017
Qantas today reported an Underlying Profit Before Tax of $1,401 million and a Statutory Profit Before Tax of $1,181 million for the 12 months ended 30 June 2017.
The underlying result represents the second highest performance in Qantas’ 97 year history, down 8.6 per cent compared with last year’s record. It is slightly above the guidance range provided in early May this year, mainly due to strengthening of the Group’s domestic businesses. A drop in statutory profit before tax of $243 million reflects that the FY16 result included the gain on sale from the Sydney Domestic Terminal.
Overall, the FY17 performance shows the Qantas Group’s margin advantage over local and global competitors[1] , which has been underpinned by completion of its three year transformation program.
SUMMARY OF RESULT
In the domestic market, Qantas and Jetstar combined reached a record $865 million Underlying EBIT, making them again the two most profitable airlines in Australia with around 90 per cent of the total domestic profit pool.
Qantas International, which has faced high levels of capacity growth in the broader market, saw an improvement of conditions in the second half; it posted an Underlying EBIT of $327 million. Continued strength in its core markets helped the Jetstar Group deliver the second highest profit in its 13 years of operation.
Qantas Loyalty booked a record $369 million Underlying EBIT on a 4 per cent increase in revenue as it continued to diversify its earnings.
The Group met all the objectives of its financial framework, reporting a 12-month return on invested capital of 20.1 per cent. Another $470 million in transformation benefits were delivered, completing the three year program and outperforming the $2 billion target by $125 million.
The Qantas Transformation Program has underpinned these results and enabled the Group to outperform its key domestic and international competitors.
This performance means Qantas is able to reward shareholders, recognise the hard work of its people and invest for customers.
RETURNS FOR SHAREHOLDERS
The Qantas Board has declared a dividend of 7 cents per share (unfranked) to be paid on 13 October 2017 with a record date of 11 September 2017.
A further on-market buyback of up to $373 million has been announced. Once this latest buyback is completed the number of Qantas shares is expected to have been reduced by more than 20 per cent since October 2015.
Since the transformation program began in February 2014, the total return for Qantas shareholders – including share price appreciation and distributions – has been around $9 billion. This has made the Group the top performer on the ASX100.
INVESTING FOR CUSTOMERS
The Group will continue to invest in new aircraft, upgrading cabins and lounges, and extending its network of destinations.
The airline’s fleet of 12 Airbus A380s will receive a significant upgrade to improve passenger comfort as well as route economics (see separate release). This will include replacing Skybeds in Business Class with the latest version of the Business Suite; increasing the size of the Premium Economy cabin and installing the same all-new seats that will debut on the Dreamliner at the end of this year; and refurbishment of the Economy and First Class sections. Work will begin in the second quarter of calendar year 2019.
Both the Business and Qantas Club lounges at Melbourne Domestic will be progressively renovated from November this year, providing customers more space, comfort and dining options before they fly. (See separate release)
New lounges at both ends of the landmark Perth-London route will be completed during FY18, and two remaining A330s will have their cabins upgraded following lease extensions.
The rollout of Wi-Fi on the Qantas Domestic network (A330 and 737 aircraft) is expected to accelerate in late September 2017, once the current trial is complete and final regulatory approval for the new service is confirmed.
Jetstar will invest in additional service training for 4,000 of its frontline employees as it continues to stimulate new travel demand with low fares. The airline will start a new route from Melbourne to the Central Chinese city of Zhengzhou from December 2017, which is expected to bring 35,000 Chinese tourists to Australia a year.
- Airline enters South America by launching new daily service to São Paulo, Brazil
- India expansion continues with new route to Bengaluru, India (Bangalore)
- Premium sun offering bolstered by return of Manchester to Las Vegas and Heathrow to Dubai, in addition to new routes to the Maldives and Turks & Caicos
- New inter-island flying in the Caribbean reaffirms airline’s commitment to the region, offering locals and holidaymakers island hopping
- Arrival of state-of-the-art new aircraft continues, in parallel with the recruitment of 350 additional award-winning cabin crew
Today, Virgin Atlantic announced the opening of thrilling new routes with all-new planes on three continents. With more than 250,000 total additional seats* across Virgin Atlantic’s network, compared to 2019, customers are expected to benefit from network growth as the airline takes advantage of the ongoing demand for international travel.
By adding a brand-new daily flight from London Heathrow to So Paulo, Brazil, the airline will expand its network of international routes. One of the world’s most populated cities, Sao Paulo, is home to numerous international corporations, giving corporate clients and business visitors the chance to fly in the Virgin Atlantic fashion.
Three new A380 destinations, three continents, one day(Opens in a new browser tab)
Signalling expansion in the country, Bengaluru (Bangalore) will become the airline’s third destination and fourth daily service to India. Since 2019, Virgin Atlantic has increased capacity to India by 250%, the airline’s largest area of growth outside the United States. Launching in Summer 2024, the addition of this new route means the airline will offer 500,000 seats (total) each year between the UK and India, while its growing codeshare with IndiGo, India’s leading airline, flies to 34 destinations across the country.
Providing customer connectivity remains a focus, working with a range of world class partners. Alongside expanded joint venture partners Delta Air Lines, Air France and KLM, the airline joined SkyTeam alliance in March 2023, meaning customers benefit from a consistent, seamless customer experience, across 1,000 global destinations in over 170 countries, with a further codeshare announcement with Korean Air since launch.
Virgin Atlantic Fined for Operating Flights in Prohibited Airspace(Opens in a new browser tab)
By the end of 2024, the airline will have received its full order of 12 Airbus A350s, as well as the arrival of a further four A330neos. To support the operation, 350 additional cabin crew will be recruited to join the airline’s award-winning frontline team in delivering its renowned customer service.
Flights from London Heathrow to São Paulo’s Guarulhos International Airport will operate daily on the airline’s flagship Boeing 787-9, from 13 May 2024. Flights are set to be on sale from August, with fares starting from £655. Flights to Bengaluru will operate on Virgin Atlantic’s Boeing 787-9 Dreamliner aircraft from 31 March 2024, boasting 31 Upper Class, 35 Premium and 192 Economy Delight, Classic and Light seats, as well as the airline’s signature Upper-Class social space.
Route Aircraft On Sale Launch Date Frequency LHR-DXB-LHR Boeing 787-9 07 June 2023 28 October 2023 X4 weekly,October 2023- March 2024 MAN-LAS-MAN Boeing 787-9 July 2023 2 June 2024 X3 Summer LHR-BLR-LHR Boeing 787-9 14 June 2023 31 March 2024 Daily – year round LHR-GRU-LHR Boeing 787-9 August 2023 13 May 2024 Daily – year round LHR-MLE-LHR Boeing 787-9 On sale now 22 October 2023 X3 weekly, October 2023- March 2024 LHR-PLS-LHR Boeing 787-9 On sale now 4 November 2023 X2 weekly, year round BGI-SVD-BGI AirbusA330-300 On sale now 14 June 2023 X2 Summer 2023/ X3 Winter 2023 BGI-GND-BGI AirbusA330-300 On sale now 14 June 2023 X2 Summer 2023/ X3 Winter 2023
A well-known aircraft manufacturer, Embraer, is in talks to partner up with Tata Group and Mahindra Group to build up local manufacturing capabilities in India. With the help of this strategic alliance, India’s aerospace sector will expand, domestic manufacturing will be strengthened, and jobs will be generated.
“Tata told us that their initial focus would be on large aircraft, including Airbus and Boeing. After that, they would consider smaller, regional aircraft, and there is the market where we are,” according to president and CEO Francisco Gomes Neto.
While Airbus and Boeing dominate the market for bigger commercial planes, Embraer is a market leader in regional aviation. By the end of 2023, the business wants to have decided on an Indian partner for the production of defense aircraft.
The Indian Air Force (IAF) is looking for medium-transport aircraft that have a lifting capacity of 18 to 30 tonnes. It aims to finish this search by 2025 or 2026. The C-390 Millennium multi-mission tactical air transport aircraft, the newest defense offering from Embraer, which debuted the plane at Aero India 2023 in Bengaluru in February, has been pushed for the order.
According to CEO Neto, Embraer sees “a good opportunity” in India. “The IAF has already seen our aircraft, and they approve. We have received positive feedback about the C-390 Millennium from nations like the Netherlands. We believe that the C-390 Millennium is the greatest option for that size of aircraft.
The Indian defense aviation market is not new to Embraer. The business has previously worked with the Defence Research and Development Organisation (DRDO) to produce three Netra airborne early warning and control (AEW&C) aircraft based on the ERJ145 platform of Embraer, which are used by the Indian Air Force (IAF). The IAF and the Border Security Force (BSF) both use Embraer Legacy 600 aircraft to fly VIPs and government officials.
The partnership combines the skills and strengths of each partner. Together with Tata Group’s manufacturing capabilities and Mahindra Group’s technical know-how, Embraer’s extensive domain understanding and technological expertise in the aerospace sector form a potent partnership that can provide high-quality products and solutions.
Embraer, Tata Group, and Mahindra Group’s cooperation paves the way for sustained success and growth. This cooperation can investigate the potential in both domestic and foreign markets as the demand for aircraft goods and services keeps growing. Together, it can boost India’s position as a major center of manufacturing, which would benefit the country’s aerospace sector as well.
The first of two livery designs, branded “a perfect blend of cutting-edge technology and timeless elegance,” was unveiled today by Riyadh Air. The livery is being shown on a Boeing 787-9, of which the airline has placed orders for up to 72 (including 39 definite orders and 33 options).
The livery of Riyadh Air features a purple fuselage and a light blue tail painted with the RX logo. As on the Saudi Arabian Airlines (SV) livery, the airline’s name is featured at the front of the fuselage in both English and Arabic alongside the Saudi Arabian flag.
5 Facts About Saudi Arabia’s Newest Riyadh Air(Opens in a new browser tab)
Riyadh Air’s CEO , Tony Douglas, stated: “The new airline represents the ambitious aim of Saudi Arabia to be at the center of creating the future of global air travel and be a true disruptor in terms of customer experience.
“To create a smooth travel experience, Riyadh Air’s dedication to its clients will see the merging of digital innovation and genuine Saudi hospitality. Our new 787-9s will serve as a foundation for our global operations, as we build a wider network and connect our passengers to Saudi Arabia and many other destinations around the world, as we position the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia.
Additionally, Riyadh Air announced that the International Air Transport Association (IATA) has granted it the “RX” airline designator code. We wanted something with a modernist feel and a digital edge, Douglas added. Early 2025 is the anticipated start date for operations. The airline placed an order for 72 Boeing 787-9 Dreamliners in March, and up to 150 Boeing 737 Max planes are anticipated to follow soon.
The new airline is anticipated to increase the Kingdom’s non-oil gross domestic product by up to 75 billion riyals and generate more than 200,000 direct and indirect jobs. Additionally, the business plans to move up to five million tonnes of freight each year.
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