Qantas Freight pushes against global market headwinds

Group sees records fall but freight arm’s circumstances change in soft conditions

Qantas Freight pushes against global market headwinds
Qantas Freight’s favourable Australian air Express legacy agreements have ended.


Qantas has seen cost-cutting, lower fuel costs and Australian dollar boost its first half profits to a record of $921 million but with a slightly reduced contribution from Qantas Freight.

Qantas Freight reported underlying earnings before interest and tax (EBIT) of $38 million, a 30 per cent fall compared with $54 million in the first half of last year.

Its revenue was $525 million, down from the previous first half’s $550 million, while the load factor was also down from 57.7 per cent to 54.8 per cent.

"As forecast in the Group’s financial year 2015 results announcement, the global cargo market remains challenging, with lower demand domestically and in key international markets contributing to a 5 per cent fall in revenue in the half," the company says.

Also weighing on the freight arm was the conclusion of favourable Australian air Express legacy agreements and fuel price reductions offsetting reduced fuel costs.

As with the rest of the group, freight operations are subject to the Qantas Transformation strategy.

"Qantas Transformation benefits and lower fuel prices were offset by fuel surcharge reductions and a decline in air freight demand in international markets," the Qantas financial report reveals.

"Qantas Freight continued to focus on customer enhancements in the period, including the pilot of a customer advocacy program and selling to new markets Haneda (Tokyo), San Francisco and Vancouver."

 "Qantas Freight’s focus is on increasing efficiency through transformation, investing in customer service, and maximising the new markets opened up by Qantas International’s expansion," the company says, and the segment is undergoing a centralisation of its freight capacity management.

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