Dreamliner compensation boosts Qantas profits

Dreamliner compensation boosts Qantas profits

Compensation from Boeing after cancelling 787 Dreamliner orders and reduced losses on international operations helped raise half-year profits at Qantas.

The airline saw net profits rise to A$111 million (£75 million) in the half year to December 31 against A$42 million for the same time in 2011.

Underlying profit before tax for the first half included $125 million in revenue from an agreement negotiated with Boeing in August to restructure its 787 order which saw commitments for 35 aircraft cancelled and others delayed.

Losses in Qantas's international business were cut by 65% to A$91 million from A$262 million.

The carrier is embarking on a new long-haul partnership with Emirates from March 31 to run one-stop flights to 65 destinations in Europe, the Middle East and North Africa via Dubai after withdrawing from its long-standing arrangement with British Airways.

Qantas chief executive Alan Joyce said this and other measures being taken on Asian routes “provide a platform to return Qantas international to profit and, over the long term, target growth opportunities”.

He admitted that the Australian domestic market remained “highly competitive” with increased capacity from rival airlines attempting to claim market share from Qantas.

“This has put pressure on yield for all airlines – but Qantas domestic has remained the airline of choice for business travellers, maintaining its 84% share of the corporate market.

"During the first half we renewed 40 accounts and won 39 new accounts, including four won back from the competition,” Joyce said.

The airline described the operating environment for the current half year as remaining “challenging and volatile”.


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