News Mar 01, 2017 09:02 AM EST

Qantas posts decline in net profits

By April Kirstin Chua

Qantas reports a decrease in underlying profit, down 7.5 percent compared with the prior corresponding period but above the guidance range provided in October last year. The results reflected the airline's strong performance in a mixed market with its strategy and ongoing transformation that enables delivering value for shareholders while investing for customers.

In a press release statement on Feb. 23, Qantas reported an underlying profit before tax of $852 million and a statutory profit before tax of $715 million for six months ending in December 2016. All subsidiaries of the Qantas Group were profitable in the half due to the impact of its high levels of capacity growth that affects all major airlines. Qantas International significantly achieved higher margins than the industry average.

The Group met all its objectives and delivered a rolling 12-month return on invested capital of 21.7 percent. Further, a $212 million of transformation benefits were reported in the half making it a total of $1.9 billion since 2014. Qantas is on its way to achieving $2.1 billion by June 2017. "Our transformation program has built a strong, sustainable business that generates returns throughout the economic cycle," Qantas CEO Alan Joyce said. "Our focus is to stay disciplined on capacity, keep downward pressure on costs, and introduce game-changing improvements like the Dreamliner and high-speed Wi-Fi."

Joyce believes that Qantas Groups' domestic operations sets them apart from its competitors, in addition to overcoming pressure from the international market's capacity growth and lower fares and the dedication of its people. Qantas' transformation program has been characterized by disciplined capital investment that focused on creating a world-class experience for customers while maintaining its competitive edge.

Qantas will soon open new lounges in Brisbane Domestic and London Heathrow as well as entry into service of Qantas Boeing 787-9 Dreamliner. It also revealed the Premium Economy experience for the Dreamliner and confirmed successful test flights done during February. This means that Qantas will soon operate its first commercial service with free Wi-Fi in the next weeks to come.

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