Qantas has announced a record profit before tax of $905 million for
the half-year to 31 December 2007, a 73 per cent increase on last year’s reported profit result.The Board declared an interim fully franked ordinary dividend of 18 cents per share, a 20 per cent
increase on the 15 cents per share special interim dividend in 2007.
The Chairman of Qantas, Mr Leigh Clifford, said following the excellent performance of Qantas and
Jetstar in particular, combined with strong operating cashflows, dividends had been increased and
capital had been returned to shareholders, with gearing increasing by only one percentage point to
42 per cent.
Mr Clifford said the result also reflected the ongoing success of the company’s business
transformation program over the past five years.
“While we have benefited from a strong revenue environment, our focus has also remained on costs,
efficiencies, customer service and product improvement.
“Our results reflect these efforts and I would like to thank all employees for their continued
contribution to the company’s success.”

Mr Clifford said the announcement today of a merger between Qantas Holidays, Qantas Business
Travel and Jetset Travelworld (see separate release) would be earnings per share accretive.
The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the Group’s two brand strategy had
again underpinned the result.
“We have two very strongly performing full service and leisure brands. Our ability to direct our flying
to the most appropriate markets is giving us a unique competitive advantage.”
Mr Dixon said the key drivers of the results were:
- strong domestic and international demand which led to a 2.2 per cent yield improvement and a
1.8 per cent improvement in seat factor to 82.1 per cent for the Group;
- a strengthening and significant investment in the Qantas brands - domestic, international and
QantasLink - that led to a doubling of operating profit;
- aggressive build-up of Jetstar in both the international and domestic markets, leading to a
quadrupling of profit to $113 million for the half-year;
- a further $311 million in efficiencies under the Sustainable Future Program; and
- operating expenditure increasing only 3.0 per cent, compared to capacity growth of 3.9 per cent,
and unit costs reducing by 3.3 per cent.
Mr Dixon said the Sustainable Future Program would deliver a cumulative $3 billion in efficiency
improvements by the end of the financial year.
“The program is critical to our growth strategy and to our ability to compete successfully in the
international market, particularly against those carriers that have extensive government ownership
underpinning their growth. To this end we are targeting further cumulative savings of $1.5 billion by
June 2010.”
Mr Dixon said that the December 2007 results, for the first time, included separate reporting for the
Group’s Loyalty and Freight businesses, in line with its Business Segmentation strategy.
“This is in accordance with our announcement last year that we will position these and eventually
other portfolio businesses for greater growth outside their traditional aviation areas, and to provide
alternative ownership options.”
Mr Dixon said Qantas Frequent Flyer (QFF) was well placed to capitalise on its unrivalled position in
the Australian loyalty market.
“It has a wide network of partners, more than five million members, and attractive redemptions. It
also generates 60 per cent of its revenue outside Qantas and has excellent growth prospects.
“It will be in a position to launch an enhanced program mid this year including the use of points for
any seat on Qantas and Jetstar, and merchandise and shopping vouchers.
“We will, if we believe such a move would add significant value and shareholders agree, be in a
position to implement a new ownership structure for QFF by late 2008.”

Mr Dixon said Qantas Freight was continuing to look for opportunities to expand in Asia and within
Australia.
“We are leveraging our existing Qantas and DPEX networks and developing new markets with
Qantas and Jetstar.”
Mr Dixon said while Qantas’ position was very strong, there were ongoing challenges for the industry
overall.
“Qantas has built a great deal of flexibility into its various businesses to enable it to better handle
these challenges.
“For example, we manage our fleet to provide extensive flexibility for periods of strong growth or
periods of no growth.
“We have the mechanisms in place to defer or accelerate the retirement of aircraft and the
mechanisms to delay or advance deliveries of new aircraft through slide rights of up to 20 per cent of
our fleet.”
Mr Dixon said this flexibility had enabled Qantas to avoid difficulties following the delay of the A380
(which will enter Qantas service in August) and the B787 Dreamliner.
“We are well placed to successfully manage this aspect of our business in an increasingly
competitive environment.”
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