CEO Address: Qantas CEO Alan Joyce on 2017 Full Year Results

As previously reported by the Blue Swan Daily, Qantas released its 2017 Fully Year Results on 25-Aug-2017, announcing its second highest underlying profit before tax in history with an impressive AUD1.4 billion.

On the day, Qantas CEO Alan Joyce delivered an address highlighting the key results:

Qantas reports stronger domestic market, despite a continued decline in the resources sector

“The carrier’s domestic business got stronger over FY2017, with growth in the business and leisure segments more than offsetting a continued decline in the resources sector. Customer satisfaction and employee engagement are at record levels, while Qantas and Jetstar achieved around 90% of the domestic profit pool during FY2017, widening the margin advantage over competitors”.

Qantas International under ‘continued pressure from excess capacity in the market’ during FY2017

“Qantas International came under continued pressure from excess capacity in the market during FY2017, but these forces eased later in the year and the airline delivered its second highest ever profit. The Jetstar Group delivered its second highest result as well, with strong performance in both the domestic and international segments, as well as another net profit from its operations in Asia”.

Qantas turn around programme completed after three years and USD1.6bn in savings

“The carrier has completed its AUD2 billion three year turnaround programme, with the objective to make the Qantas Group sustainably profitable. During the turnaround, Qantas tackled some difficult structural issues, become a lot more efficient and kept improving the customer experience”.

Qantas: ‘Project Sunrise’ orders would produce a revolution in Australian air travel

Qantas has launched ‘Project Sunrise’ and has challenged the CEOs of aircraft manufacturers Boeing and Airbus to “deliver an aircraft capable of flying regular nonstop services like Sydney-London, Brisbane-Paris and Melbourne-New York with a full payload by 2022”. Mr Joyce said introduction of services such as these are “a last frontier in global aviation” and would be a “revolution for air travel in Australia”. According to Mr Joyce, both manufacturers are developing aircraft – the Boeing 777X and the Airbus A350ULR – that can “almost do the job” and it is Qantas’ belief that advances in the next few years will close the gap. Ordering aircraft capable of operating these routes “would be one of the most strategically important aircraft orders in the history of Qantas” said Mr Joyce.

Qantas to cut economy class seating, add more premium seats in major A380 refurbishment

Mr Joyce advised the following major cabin upgrade and refurbishment plans for the carrier’s fleet of A380 aircraft, to take place from 2019 onwards:

  • Reduction of economy class seats and installation of more premium seats.
  • Economy class seats to be upgraded with better cushions and improved inflight entertainment options.
  • Introduction of the latest version of the Qantas’ ‘Business Suites’ product;
  • Increase the size of the premium economy cabin and introduction of all-new premium economy seat, following the introduction of the product on the 787-9 later in FY2018;
  • Completely refurbish first class to improve seat comfort and install larger inflight entertainment screens;
  • Overhauling lounge space at the front of the upper deck, reconfiguring this part of the aircraft to create more room.

Mr Joyce commented that the A380 project is a “significant investment in an aircraft that will operate on key long haul routes for many years to come”.