Logistics News

Qantas freight division struggles

A soft global cargo market has been blamed for Qantas Freight’s 42 percent profit plummet

February 21, 2013

A ‘soft global cargo market’ has been blamed for a 42 percent fall in
Qantas Freight’s
operating profit.

Qantas today reported its freight division’s half-year underlying profit was $22 million, down from $38 million.

The airway’s interim financial report
highlights weakness in the domestic market and strong competition as causes for the profit drop.

Total freight revenue for the six months ending December 31, 2013 was $475 million, up from $467 million in the prior corresponding six-month period.

The report says the consolidation of Australian air Express, which Qantas recently bought out, drove the increase in revenue for the six months.

According to the report, Qantas expects the integration of Australian air Express to result in Qantas becoming Australia’s leading independent air freight provider.

The report also says the airline’s freight division will cooperate with Emirates as part of a new partnership, to support changes to the international network from March 31.

Qantas CEO Alan Joyce defended the freight division’s current profitability, saying international freight has ‘held up well in the first half despite a soft global cargo market’.

Qantas received $750 million by selling its stake in Star Track Express to Australian Post, which helped enable the company to repay $650 million in debt, and launch a share buyback.

“Domestic performance was weaker, and the time was right for the group to sell its stake in Star Track and integrate Australian air Express with Qantas Freight – creating operational and commercial efficiencies,” Joyce says.

Overall statutory profit for Qantas Airways was $111 million, up 164 percent.

Underlying profit before tax for the group was $223 million, up 10 percent.

Meanwhile, the Qantas International division reported a loss of $91 million.

“We have passed a turning point as we continue to deliver the transformation of Qantas,” Joyce says.

“All parts of the business were profitable, with the exception of Qantas International, which continued to track toward profitability, with losses reduced by 65 percent compared to the same period in the prior year.”


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