Home' Asian Aviation : AAV June 2010 Contents Airlines
Earlier this year, Australia's largest
airline, Qantas, revealed that it had
maintained pro tability in the nal
six months of 2009, while competitors
sank into the red under the e ects of
the global recession.
e carrier's underlying pre-tax pro t -- the main
measure used by the group's management to assess
performance, equivalent to operating pro t -- totalled
A$267 million (US$227 million) in the six months
ended 31 December. Statutory net pro t before tax
was A$90 million, in line with the company's forecast
from December that the gure would be in the range
of A$50-150 million.
"While the operating environment has been
unprecedented and challenging , the result re ects
the strength and diversity of our operations," said
Chief Executive O cer Alan Joyce. Pointing out that
the International Air Transport Association (IATA)
expects the global airline industry to lose US$5.6
billion this year, Joyce attributes Qantas's 2009
performance to its two-brand strateg y, which makes
the business resilient and contains costs.
"Our two -brand strategy, focused on growing the
full-service, premium Qantas and low fares Jetstar,
is not only delivering bene ts to our customers, but
also to our shareholders," Joyce said. "Qantas, in
particular, has bene ted from the capacity reductions
and restructuring activities implemented since April
2009, with substantial cost savings achieved during the
Joyce said that the global economic crisis had
forced the company to make tough decisions in 2009,
especially in managing capacity and cutting costs. e
result was further helped by the company's three-year
Q Future cost-reduction programme, announced in
Q Future was unveiled as the airline revealed that
its annual pro t for the business year ended 30 June
2009 had dropped 88 percent to A$117 million, down
from A$969 million a year earlier. e airline said the
programme would allow the carrier to cut its costs by
A$1.5 billion over three years, starting with a target of
A$500 million in the current nancial year.
The plan addresses cost-cutting from multiple
angles, including measures such as using technology to
improve productivity, for example by the introduction
of mobile phone text check-in for Jetstar passengers,
as well as adjusting cabin seating con gurations to the
demands of individual markets.
Since the airline had already slashed its workforce
in the 2008/2009 business year, eliminating hundreds
of management positions and 1,250 operational jobs,
Qantas said it did not anticipate any further sta cuts.
"We have taken out nearly 600 management
positions, making ourselves leaner, atter and faster,"
Joyce said. " is is an important basis for a stronger
culture of innovation and a platform for us to form
wider, deeper and more enduring relationships with
Joyce added that during 2009, the airline had
consolidated its operations, pulling numerous
business segments into a single Airline Operations
unit to deliver a more integrated, seamless ser vice
to customers, through direct control over all core
elements of the business.
The carrier also relaunched its frequent flyer
programme in 2009 "to a huge response", Joyce said.
"Our 6 million member Frequent Flyer base
provides us with an unrivalled - even unique -- ability
to understand customer preferences," the Qantas chief
said. "We have also been undertaking detailed research
to understand niche market segments and explore
opportunities to ser vice them e ectively."
"We have been repositioning ourselves for the
future," Joyce said. "We are entering a new era of
A new era
" e Qantas Group is in the rare situation of having
two outstanding brands in both the premium and low
fares categories: Qantas and Jetstar. We believe each
has a major role to play in the next era of aviation,"
e airline chief said he believes there is "no future"
for a middle-of-the-road, hybrid business strateg y.
"We certainly don't take the view that one size can ever
t all," he said, adding that the carrier has signi cant
plans for both its existing brands.
"I've noticed way too many advance obituaries for
premium travel," Joyce said. "Well, I can assure you that
the reports of the 'death of premium travel' have been
greatly exaggerated. Yes, demand for premium ying has
been a ected during the global downturn, and pretty
Qantas adapts for a new era
Qantas successfully weathered the global crisis of the past year, and is now looking to capitalize on
its two-brand strategy as aviation evolves, writes Andrzej Jeziorski.
20 AsianAviation | JUNE 2010
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