Qantas today announced a statutory profit before tax (PBT) of $90 million for the six months ended 31 December 2009. The statutory result was in line with guidance, provided in December 2009, of between $50 and $150 million. Underlying PBT, which is the key measure used by management to assess the performance of the Group, was $267 million for the six months.

Qantas Chief Executive Officer, Mr Alan Joyce, said that, while the global aviation industry remained in loss, the Qantas Group had been profitable.

“According to IATA, the world’s airlines will record net losses of US$5.6 billion in 2010,” Mr Joyce said.

“While the operating environment has been unprecedented and challenging, this result reflects the strength and diversity of our operations. “In this context, coupled with significant capital expenditure programme associated with fleet renewal, the Board considers it prudent not to pay an interim dividend, and future dividends will be assessed against ongoing earnings performance and capital requirements.

“The global economic crisis, and its impact on demand, revenues and yields, required airlines to take decisive action. “Qantas’ response was quick but carefully considered, and the tough decisions made last year, particularly in terms of capacity management and cost initiatives, have yielded results.

“Our two-brand strategy, focused on growing the full service, premium Qantas and low fares Jetstar, is not only delivering benefits to our customers, but also to our shareholders.
“Qantas, in particular, has benefited from the capacity reductions and restructuring activities implemented since April 2009, with substantial cost savings achieved during the current halfyear.

“Jetstar continues to provide the Group with true diversity, and our broader portfolio of assets with a unique strength and range of revenue growth opportunities. “Qantas Frequent Flyer has delivered a strong result and continues to benefit from its alliance with the Woolworths Group and other programme enhancements implemented last year. “Qantas Freight and the Jetset Travelworld Group are also well placed to take advantage of signs of economic and demand recovery.” Mr Joyce said the result, and Qantas’ future financial and operational performance, was also underpinned by the three-year Q Future cost reduction programme, announced in August 2009.

“Q Future is already delivering significant benefits and efficiencies to Qantas and the broader Group,” he said. “We are well-placed to deliver the 2009/10 target of $500 million in benefits, with more than $200 million in sustainable savings and efficiencies achieved to date.“

Key drivers of the result, compared to the comparative (1H08/09) half-year, were:

* weaker domestic and international demand and lower fuel surcharges over the last 12
months, that led to a 14.9 per cent decline in yield;
* lower capacity partially offset by an increase in seat factor (load) of 2.7 points;
* average fuel prices 38 per cent lower in the half-year, compared to the prior year,
contributing to a net $486 million decline in fuel costs; and
* activity cost savings and benefits from prior year restructuring contributed to an 11.0 per
cent decrease in operating expenses (excluding fuel).
Non-recurring items included in the half-year result were aircraft write-downs of $48 million
related to changes in the recoverable value of a number of wide-body aircraft held for sale
following capacity reductions announced last year.