Despite potentially 'sucking away customers', new Emirates alliance declared 'absolutely fantastic' by Qantas chief executive
Qantas Group declared a before tax loss of 642 million Australian dollars (Dh2.2 billion) and a statutory after tax loss.
Click here to add Air New Zealand as an alert
Disable alert for Air New Zealand,
Click here to add Alan Joyce as an alert
Disable alert for Alan Joyce,
Click here to add Australian Securities Exchange as an alert
Disable alert for Australian Securities Exchange,
Click here to add Dubai as an alert
Disable alert for Dubai,
Click here to add Emirates as an alert
Disable alert for Emirates,
Click here to add Etihad Airways as an alert
Disable alert for Etihad Airways,
Click here to add Malcolm Fraser as an alert
Disable alert for Malcolm Fraser,
Click here to add Nick Xenophone as an alert
Disable alert for Nick Xenophone,
Click here to add Qantas Group as an alert
Disable alert for Qantas Group,
Click here to add Qantas International as an alert
Disable alert for Qantas International,
Click here to add Singapore Airlines as an alert
Disable alert for Singapore Airlines,
Click here to add Sydney as an alert
Disable alert for Sydney,
Click here to add Tony Webber as an alert
Disable alert for Tony Webber,
Click here to add Virgin Australia as an alert
Disable alert for Virgin Australia
Qantas Group declared a before tax loss of 642 million Australian dollars (Dh2.2 billion) and a statutory after tax loss, which includes aircraft write downs, of A$2.8 billion for the 12 months ending June 30. A year ago it declared a A$1 million dollar profit.
“There is no doubt that today’s numbers are confronting,” Joyce told a press conference in Sydney.
Despite the record loss, Qantas share price closed on Thursday up 6.95 per cent at A$1.385 on the Australian Securities Exchange.
Capacity saturated domestic and international markets along with record fuel prices were blamed for the historical loss. But the airline’s international division, which will now be spun off under a separate holding company as part of a strategy to encourage foreign investment into the Group, dragged the company down.
The international division had a before interest and tax loss of A$497 million, compared with a A$246 million loss a year earlier. This is Qantas’ first full financial year, which runs from July 1 to June 30, of its revenue sharing partnership with Emirates.
Joyce talked up the Emirates partnership that he said has provided the airline with “better connections in Europe and North Africa.”
“We have seen significant travel levels going over Dubai … the customer ratings going over the Dubai hub is the best in our network,” he said.
But on Thursday, Nick Xenophone, an Australian Independent Senator, citing government figures, wrote in the Australia’s The Age that “in the 12 months since April 1, 2013, compared to the previous year, Qantas has gained only 2 per cent of passengers entering Australia; Emirates’ passenger numbers have jumped 18 per cent.”
Tony Webber, former chief economist at Qantas, said by phone that Emirates may be sucking customers away from Qantas, rather than helping its troubled alliance partner.
“People who once flew on Qantas operated aircraft who suddenly fly on the Emirates operated aircraft are seeing a big improvement in quality. Instead of booking on the Qantas website they are now just jumping on the Emirates website,” he said.
Former Australian Prime Minister Malcolm Fraser tweeted on Thursday that, “Joyce has many questions to answer. Board made foolish decisions, being eaten by Emirates.”
Joyce insisted that “the worst is over” and announced that the Group will not be selling off its profitable loyalty programme, which has been the centre of much speculation, and that he has targeted a half year profit for the six months ending December 31, 2014. However, he refused to discuss the new structure of Qantas International.
Qantas competitor Virgin Australia has separated its domestic and international divisions in such a way that allows the airline to be backed by Etihad Airways, Air New Zealand and Singapore Airlines. Qantas has previously lashed out at the “unfair” foreign state backing of Virgin. Emirates has consistently said it’s not interested in buying a stake in Qantas.
Webber said foreign investment will not make up for the international capacity saturation haunting Qantas. He said that airline needs to establish more codeshare partners to drive revenue into the international division.
“It (Qantas) can’t match these airlines with costs and it never will. As soon as you have Australian labour cost base there is no way you can compete with the Gulf carriers and the Asian carriers,” he said.
Qantas domestic reported a before interest and tax profit of A$30 million, down from a A$365 million profit a year earlier. Jetstar, the Groups low cost carrier, reported a before interest and tax loss of A$116 million, down from a A$138 million profit last year.
- Will terror attacks damper Arabs' appetite for European holidays?
- So cool it's hot: Saudi Arabia's $3.2B HVACR market driven by construction boom
- US, EU protectionist policies may be a blessing in disguise for GCC suppliers
- Dubai to Doha: How far can you stretch your dirham?
- OPEC's poor history of compliance will make production cut deal a challenge
- Emirates European bookings take-off following Qantas link-up
- Australian Qantas chooses Emirates over Etihad
- Australian Qantas chooses Emirates over Etihad
- Qantas and Emirates airline about to reach higher profit altitudes
- Not a 'bottomless pit of cash'! Emirates airlines refuses to bail out struggling partner Qantas