Group can’t top huge previous performance but notes deals
Airline and freight transport group Qantas has seen its freight revenue and overall first-half profits fail to top last year’s outstanding results.
Freight earnings before interest and tax fell 11 per cent to $27 million and revenue fell $42 million or 9 per cent on the previous first half to $416 million as the freight arm continues to find market conditions challenging.
“The result reflected a resilient freight performance in challenging global cargo markets,” the company says, adding that freight conditions “remain challenging worldwide, but there are signs of stabilisation and Qantas Freight is well-placed”.
Without going into detail, it highlights three ‘key drivers’ of the result:
- cost reduction through Qantas Transformation and lower fuel prices
- significant levels of wide body capacity in international markets impacting yields
- strong internally reported customer advocacy improvement (9 points), with customer feedback driving new innovation.
“The business holds more than 80 per cent of the domestic air freight market, with dedicated freighter operations for Australia Post launched in July 2016, and is pursuing new opportunities in the international market – including an agreement to freight Tasmanian milk to China,” Qantas says.
Group net profit was down 25 per cent on the previous first half to $852 million after last year’s bumper financial performance.