SYDNEY, 21 August 2002: Qantas today announced a profit before tax of $631.0 million for the year ended 30 June 2002. Net profit was $428.0 million.

The Directors declared a fully franked final dividend of 9 cents per share, bringing the total fully franked dividends for the year to 17 cents per share.

Chairman Margaret Jackson said the result was pleasing given that it was achieved in extraordinary circumstances, including:

* the failure of two domestic airlines and the need for Qantas to grow rapidly, virtually overnight, to prevent a chaotic situation in domestic aviation; * the events of September 11 and the subsequent “meltdown” of international aviation which saw airline losses worldwide grow to over $US12 billion; * a major ramp up of capacity by Qantas which saw, in a 12 month period, the addition of 15 new Boeing 737-800s, seven Dash 8s, six Boeing 717s and one Boeing 737-300 to the Qantas fleet plus the short-term lease of another
11 aircraft; * a growth in Qantas staff numbers by around 1,500 to over 33,000 people; * continued major review and investment in Qantas security to meet the changed circumstances resulting from September 11.

Ms Jackson said Qantas` effort in achieving such a good result was a tribute to management and staff. “I am extremely pleased to confirm that as a result of their efforts and in line with our commitment late last year, staff will receive a special four per cent bonus payment. “The Board has also decided to allocate $1,000 worth of Qantas shares to all Australia-based staff under the Qantas Profit Share Scheme.”

Chief Executive Officer Geoff Dixon said highlights of the results included:* a vast improvement in international operations in the second half of the year despite extremely difficult global conditions;* the strong performance by domestic operations and subsidiary businesses;* capital expenditure of $2.46 billion, marking the beginning of the company`s substantially increased investment program.

“Given the circumstances of the industry in Australia over the past 12 months, all sectors of the business performed credibly,” Mr Dixon said. “Our domestic and subsidiary operations were particularly strong, offsetting a downturn in international operations that worsened substantially after September 11. “The international operations improved strongly in the second half of the year as some confidence was restored and load factors improved. This provides a strong base for further improvement.”

Mr Dixon said Qantas had a good portfolio of businesses to continue growth in coming years. “We are also well placed to continue substantial investment in new aircraft, upgraded inflight products and airport infrastructure in Australia. “This investment is needed as our competitors, particularly internationally and in this region, are also upgrading aircraft and product and competing aggressively.” Mr Dixon said Qantas had no option but to continue to change its business and to seek further efficiencies in all areas. “We can only grow and invest if these efficiencies are realised in coming years. Further efficiencies are the only real pathway for job security and job growth,” he said.

Mr Dixon said Qantas would continue its strategies of:* segmenting its flying business to align costs and revenues in particular markets;* investing in and growing its subsidiary businesses;* seeking mutually beneficial partnerships with other quality airlines.

Qantas will also launch its new low cost, full service, medium-haul leisure airline, Australian Airlines, in late October. Australian Airlines will operate on routes from which Qantas has withdrawn and on routes where Qantas has been unable to extract a satisfactory return.

Mr Dixon said Qantas had demonstrated time and again during the past year its strong commitment and responsibilities to the Australian community. “We employ over 31,000 people in Australia, we spend billions of dollars with Australian suppliers and we support Australian tourism with tens of millions of dollars. We are also a major supporter of the arts, sports and charitable organisations,” he said.

For further details see www.quantas.com.au
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