Qantas 2001 Annual Report Download

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QANTAS ANNUAL REPORT 2001
The Spirit of Australia

Table of contents

  • Page 1
    QANTAS ANNUAL REPORT 2001 The Spirit of Australia

  • Page 2
    ... LIMITED, THE AIRLINE HAS BUILT A REPUTATION FOR EXCELLENCE IN: SAFETY OPERATIONAL RELIABILITY ENGINEERING AND MAINTENANCE CUSTOMER SERVICE QANTAS CARRIED MORE THAN 22 MILLION PASSENGERS IN 2000/2001, OPERATING A FLEET OF 178 AIRCRAFT ACROSS A NETWORK SPANNING 129 DESTINATIONS IN 34 COUNTRIES...

  • Page 3
    ... been another successful year for Qantas. Your company performed well despite fierce competition in the domestic market and low overall industry profitability. Within this challenging operating environment, the company produced a solid annual return and laid the foundations for meeting the difficult...

  • Page 4
    ... on its international fleet of Boeing 747-400 aircraft. The Cityflyer express service, with flights every half hour between Sydney and Melbourne, was launched. And Qantas introduced a new range of domestic Economy Class meals, inspired by renowned chef and restaurateur Neil Perry. Qantas employs 31...

  • Page 5
    Qantas Cityflyer was launched in July 2001 offering flights every 30 minutes between Sydney and Melbourne with a range of dedicated services on the ground to streamline the airport process for business travellers. THE SPIRIT OF AUSTRALIA p 3

  • Page 6
    ... and Tax Profit From Ordinary Activities Before Tax Net Profit Attributable to Members of the Company Earnings Per Share Ordinary Dividends Per Share Passengers Carried Available Seat Kilometres Revenue Passenger Kilometres Revenue Seat Factor Aircraft in service at balance date $M $M $M $M cents...

  • Page 7
    ... Culture p The Qantas Fleet p 8-9 Strategic Alliances p 10-11 Network Management p Customer Service p 12-13 World's Best Practice p 14-15 Financial Performance p 16-17 Community Contribution p 18-19 20-21 22-23 Qantas is the largest non-North American carrier flying into Los Angeles...

  • Page 8
    The Qantas Brand QANTAS IS A LEADING AUSTRALIAN BRAND, TAKING THE SPIRIT OF AUSTRALIA TO THE REST OF THE WORLD. p 6 QANTAS ANNUAL REPORT 2001

  • Page 9
    ...the world as a uniquely Australian airline. The kangaroo on the tail of Qantas aircraft is recognised around the world as representing a proud history focussed on safety, reliability, engineering excellence and customer service. Queensland and Northern Territory Aerial Services Limited (Qantas) was...

  • Page 10
    The Qantas Culture QANTAS IS COMMITTED TO THE HIGHEST STANDARDS OF SAFETY, CUSTOMER SERVICE AND OPERATIONAL RELIABILITY. p 8 QANTAS ANNUAL REPORT 2001

  • Page 11
    ... people. Staff absorb this culture from their first day with Qantas. The induction program provides a broad company overview, which is supported by ongoing access to some of the world's best training programs, and continues through everything that the airline does to ensure delivery of consistently...

  • Page 12
    ... later. In November 2000, Qantas announced it would be a launch customer for the Airbus A380 - the world's largest commercial aircraft - as part of a comprehensive long-term fleet strategy. • 12 Airbus A380 aircraft for delivery between 2006 and 2011 to meet passenger growth on selected long...

  • Page 13
    Qantas Captain Peter Jones, (left) discusses the A380 with Airbus Industries' David Velupillai. Operational Aircraft Fleet Aircraft Type Details as at 30 June 2001 Leased Out Total in Service Operational Aircraft Fleet Aircraft Type Details as at 30 June 2001 Leased Out Total in Service Owned, ...

  • Page 14
    Strategic Alliances STRATEGIC ALLIANCES DELIVER MAJOR BENEFITS TO QANTAS AND ITS CUSTOMERS THROUGH ENHANCED REVENUE, INCREASED MARKET SHARE AND STRONGER NETWORK REACH. p 12 QANTAS ANNUAL REPORT 2001

  • Page 15
    ... through shared facilities and resources. Alliances also provide a number of major benefits to customers. At the global level, Qantas is a founding member of the oneworld alliance that features eight of the world's leading airlines - Qantas, Aer Lingus, American Airlines, British Airways, Cathay...

  • Page 16
    ... on the Qantas international fleet of Boeing 747-400 aircraft. This enormous task is due to be completed by late 2002. The system offers in-seat personal telephones, video games and 16 audio channels in all classes plus: • individual seat-back video screens in Economy Class with 12 movie and...

  • Page 17
    ... the year with new benefits including: • removal of the five-year expiry period of Frequent Flyer points; • removal of the Account Service Fee; • full points for travel on discount Economy Class fare types; • a guaranteed 1,000 points for travel on any Qantas designated Economy Class flight...

  • Page 18
    ... between Melbourne and Rome; • the expansion of frequencies to the United States bringing to 40 the number of services per week between east-coast Australia and the US; • the commencement of non-stop services between Sydney and Johannesburg, with South African Airways operating between Perth and...

  • Page 19
    ... fleet. • more services from Brisbane and Perth to Singapore; • the introduction of Qantas domestic services in New Zealand, coupled with a codeshare agreement with Origin Pacific Airlines, providing services to regional New Zealand; • an increase in frequency between Cairns and Port Moresby...

  • Page 20
    World's Best Practice QANTAS IS ONE OF THE WORLD'S LEADING AIRLINES WITH A REPUTATION FOR TECHNICAL EXPERTISE AND OPERATIONAL RELIABILITY. p 18 QANTAS ANNUAL REPORT 2001

  • Page 21
    ... staff employed at its Sydney and Melbourne Jetbases, as well as line stations around the world. In addition to the work carried out on Qantas aircraft, around 11 per cent of work performed by Engineering and Maintenance is for customer airlines and air forces around the world. In the past year...

  • Page 22
    ... National Australia Day Council Prime Minister's Disability Awards Royal Victoria Institute for the Blind Carols by Candlelight Starlight Children's Foundation UNICEF Change for Good program World Vision Cultural activities Art Gallery of NSW Australian Brandenburg Orchestra Australian Youth...

  • Page 23
    Olympic champion and World Record holder, Grant Hackett, is one of the athletes supported by Qantas. Qantas is proud to sponsor a range of major sporting events and organisations in Australia, including: Qantas also sponsors seven individual Australian athletes, each of whom has reached the ...

  • Page 24
    ... cent dividend payout ratio maintained Revenue • $10.19 billion revenue, up $1.08 billion or 11.9 per cent • $7.94 billion net passenger revenue, up $966.2 million or 13.9 per cent • $596.3 million net freight revenue, up $53.3 million or 9.8 per cent • $604.3 million tour and travel sales...

  • Page 25
    ... cent Balance Sheet • Debt to debt plus equity ratio, including operating leases on a hedged basis, increased from 44:56 at 30 June 2000 to 53:47 at 30 June 2001 due to fleet expansion and deposits paid for future aircraft deliveries • Cash flow from operations totalled $1,100.7 million, down...

  • Page 26
    Board of Directors Margaret Jackson Chairman Geoff Dixon Chief Executive Officer Peter Gregg Chief Financial Officer Mike Codd Non-Executive Director Trevor Eastwood Non-Executive Director Rod Eddington Non-Executive Director Jim Kennedy Non-Executive Director Trevor Kennedy Non-Executive Director...

  • Page 27
    ..., Age 62 Appointed to the Board by British Airways Plc in March 1993 Member of the Safety, Environment & Security Committee and the Chairman's Committee Director of Concorde International Travel Limited, World Aviation Systems (Australia) Pty Limited and the Garvan Research Foundation Fellow of the...

  • Page 28
    ...review of Board performance. • Active participation by all Directors at all meetings. • Open access to information. • Regular management presentations and visits to interstate and offshore operations. • Independent professional advice is available to the Directors. • Formal Code of Conduct...

  • Page 29
    ...points (7.7) points (2.5) points (2.8) points Manpower and staff related Selling and marketing Aircraft operating - variable Fuel and oil Property Computer and communication Depreciation and amortisation Non-cancellable operating lease rentals Tours and travel cost of sales Capacity hire, insurance...

  • Page 30
    ... Position Statement of Cash Flows Discussion and Analysis of the Statement of Cash Flows Notes to the Financial Statements 1. 2. 3. 4. 5. Basis of Preparation of the Concise Financial Report Reclassification of Financial Information Change in Accounting Policy Revenue from Ordinary Activities...

  • Page 31
    ...and domestic holiday tours and associated support activities including information technology, catering, ground handling and engineering and maintenance. There were no significant changes in the nature of the activities of the Qantas Group during the financial year. DIVIDENDS The Directors declared...

  • Page 32
    ... financial year. Attended one Meeting in an ex-officio capacity. Attended two Meetings in an ex-officio capacity. DIRECTORS' SHORT-TERM INCENTIVES Particulars of Directors' interests in the share capital of Qantas at the date of this Report are as follows: Directors' Ordinary Shares 2001 Number...

  • Page 33
    ... both Directors' fees and Committee fees. Non-cash benefits include car parking, and travel and accommodation discounts obtained from time to time by Directors and executives, some of which are through agreements entered into by the Qantas Group. Travel benefits are available on similar terms and...

  • Page 34
    ...,000 Number of Entitlements 1,2 3.44 3.44 Exercise Price $ 3 24 November 2008 24 November 2008 Expiry Date 0.89 0.89 Value per Entitlement $ 4 1,335,000 667,500 Total Value Awarded $ Executive Officers (excluding Directors) QANTAS AND QANTAS GROUP David Burden Steve Mann David Forsyth George...

  • Page 35
    ...by the Board. Compliance with these policies is strictly monitored by management and reported to the Board. It is the Qantas Group's policy not to enter, issue or hold derivative financial instruments for speculative trading purposes. Qantas is a company of a kind referred to in ASIC Class Order 98...

  • Page 36
    Statement of FINANCIAL FOR THE YEAR ENDED 30 JUNE 2001 PERFORMANCE QANTAS GROUP Notes SALES AND OPERATING REVENUE 2001 $M 2000 $M Net passenger revenue Net freight revenue Tours and travel revenue Other sources* Sales and operating revenue EXPENDITURE 7,941.8 596.3 604.3 1,045.8 4 10,188.2 6,...

  • Page 37
    ... on the prior year. • Profit from ordinary activities included the following individually significant items: - a profit on sale of Mascot Head Office land and buildings of $41.2 million; - revenue of $43.3 million and dividends of $31.8 million relating to assets sold by an associated company; and...

  • Page 38
    ...2,864.4 Contributed equity Reserves Retained profits Equity attributable to Members of the Company Outside equity interests in controlled entities Total equity 9 7 2,173.0 54.3 1,078.0 3,305.3 10.6 3,315.9 1,882.0 54.0 926.8 2,862.8 1.6 2,864.4 The Statement of Financial Position should be read...

  • Page 39
    ...result of fleet expansion and deposits for future aircraft deliveries. The Qantas Dividend Reinvestment Plan was reinstated prior to the payment of the special dividend in December 2000. This reintroduction provided additional equity to fund future capital expenditure while maintaining gearing at an...

  • Page 40
    ... YEAR ENDED 30 JUNE 2001 QANTAS GROUP 2001 $M CASH FLOWS FROM OPERATING ACTIVITIES 2000 $M Receipts from customers Payments to suppliers and employees Interest received Interest paid Dividends received Income taxes paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES...

  • Page 41
    ...sale of EQUANT NV. The current year reflects the sale and leaseback of the Mascot Head Office land and buildings, which generated proceeds of $147.5 million. • Total capital expenditure of $995.5 million for the year predominantly related to aircraft progress payments made under the new fleet plan...

  • Page 42
    ... asset write-downs. The change in accounting policy has no financial effect in the current or prior financial years. C A P I TA L I S AT I O N O F S O F T WA R E D E V E L O P M E N T C O S T S During the financial year, the Qantas Group changed its accounting policy in relation to major software...

  • Page 43
    ...32.2 million in the Qantas Group net profit for the year ended 30 June 2001. This profit increase comprises the following: Year ended 30 June 2001 $M Year Ended 30 June 2000 $M Prior Years $M Total $M Impact of change in accounting policy on profit before tax: Software costs capitalised Associated...

  • Page 44
    ...$M ORDINARY BEFORE TAX Change in accounting policy for software development costs Profit on sale of Mascot Head Office land and buildings Revenue relating to assets sold by an associated company Provision for redundancy costs Profit on sale of investment in EQUANT NV 6. I N D I V I D U A L LY IN...

  • Page 45
    ... June 2001, after taking into account adjustments for: (a) franking credits that will arise from the payment of income tax payable for the current financial year; (b) franking debits that will arise from the payment of the final dividends for the current financial year; and (c) franking credits that...

  • Page 46
    ... THE YEAR ENDED 30 JUNE 2001 STATEMENTS (continued) QANTAS GROUP 2001 $M 10. SEGMENT OF INFORMATION TOTAL (continued) BY GEOGRAPHIC REGION 2000 $M A N A LY S I S REVENUE Passenger, freight and services revenue Australia United Kingdom and Europe Japan South East Asia/North East Asia Americas...

  • Page 47
    ... the value of the aircraft security to the lenders to a predetermined level. This is reflected by the balance of aircraft security deposits held with certain financial institutions and included in current and non-current receivables totalling $537.6 million (2000: $562.6 million). The Qantas Group...

  • Page 48
    ... above basis. AUDIT OPINION In our opinion, the Concise Financial Report of Qantas Airways Limited and its controlled entities for the financial year ended 30 June 2001 complies with Accounting Standard AASB 1039 Concise Financial Reports. KPMG DOUG JUKES Partner Sydney, 3 September 2001 p 46...

  • Page 49
    ...4,730 shareholders hold less than a marketable parcel of shares in Qantas Airways Limited. ON-MARKET BUY BACKS There is no current on-market buy back. TWENTY Shareholder LARGEST SHAREHOLDERS Ordinary Shares Held % of Issued Shares British Airways Investments (Australia) Pty Limited Chase Manhattan...

  • Page 50
    ... Company December Members of the Company June INFORMATION Earnings per share Dividends per share Dividend payout ratio Share price - high Share price - low Share price - closing Weighted average number of ordinary shares Net tangible asset backing per share EARNINGS BEFORE INTEREST International...

  • Page 51
    ...-time employee strength RPKs per employee ASKs per employee Aircraft utilisation (average per day) QANTAS GROUP PERFORMANCE T R A F F I C A N D C A PA C I T Y Passengers carried Revenue passenger kilometres Available seat kilometres Revenue seat factor Aircraft in service at balance date FINANCIAL...

  • Page 52
    ...Street New York NY USA Telephone Facsimile 1 212 815 2218 1 212 571 3050 Internet Address www.qantas.com.au QANTAS SHARE REGISTRY Level 2 60 Carrington Street Sydney NSW 2000 Australia Toll Free 1800 177 747 International 61 2 8234 5470 Facsimile 61 2 8234 5435 GENERAL COUNSEL & COMPANY SECRETARY...