Qantas 2002 Annual Report Download

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The Spirit of Australia
2002 Qantas Annual Report

Table of contents

  • Page 1
    2002 Qantas Annual Report The Spirit of Australia

  • Page 2
    ... operates subsidiary businesses in specialist markets such as Qantas Holidays and Qantas Flight Catering. p 1 Report from the Chairman and Chief Executive Officer p 5 Review of our Business p 24 Board of Directors p 26 Corporate Governance p 27 Financial Review Qantas Airways Limited ABN...

  • Page 3
    ... Jackson to our fellow shareholders It has been a dramatic and at times traumatic year for Qantas and the global aviation industry. The events of 11 September 2001 changed the industry forever and the collapse of Ansett has transformed the Australian aviation market. Qantas performed well in the...

  • Page 4
    ... to terms with the terrorist attacks in the United States and the thousands of lives lost, including a number of Australians. The tragic deaths included two Qantas staff members - Alberto Dominguez, 66, a baggage handler at Sydney Domestic Terminal and Laura Lee Morabito, 34, Area Sales Manager in...

  • Page 5
    ... a number of Asian ports from 27 October; Cityflyer, the two-class domestic "shuttle" service tailored for business travellers on the popular Sydney-Melbourne, Sydney-Brisbane and Melbourne-Brisbane routes and which will soon be extended to Adelaide and Perth; the full service, two-class product for...

  • Page 6
    ...our customers, who will enjoy further improved facilities and services; • our employees, who will benefit from the airline's strong foundations and growth opportunities; • our shareholders, who expect us to grow and be profitable; and • the Australian community, which we continue to support by...

  • Page 7
    QF 20 02 p 6 International Operations p 10 Domestic Operations p 14 Regional Operations p 16 Subsidiary Businesses p 18 Freight p 20 Fleet p 22 Community p 5

  • Page 8
    ...of the new Business Class seats will be available on the London and Hong Kong routes in the first half of 2003. Facilities are also being improved on the ground. The new flagship Qantas Club Lounge at Sydney International Terminal opened in May 2002, accommodating up to 150 First Class customers and...

  • Page 9
    ...high standard of facilities that Qantas offers the international business traveller. This includes the new flagship Qantas Club Lounge in the Sydney International Terminal which opened in May 2002 as part of a $50 million program to upgrade lounge facilities in Australia and overseas. THE SPIRIT OF...

  • Page 10
    ... huge interest and support at each stage of its 13-city journey, from Los Angeles to New York via Auckland, Sydney, Melbourne, Perth, Singapore, Hong Kong, Tokyo, London, Rome, Paris and Frankfurt. A talented and highly qualified pilot and avid fan of aviation and Qantas, Travolta used the tour...

  • Page 11
    ..., Qantas replaced two flights a week to Buenos Aires with three flights per week between Sydney and Santiago, Chile with oneworld partner, LanChile. AUSTRALIAN AIRLINES During the year, Qantas announced it will launch a new wholly owned, QF 20 02 full-service, single-class international carrier...

  • Page 12
    ... the lounges at Sydney, Melbourne and Brisbane domestic terminals, with these projects scheduled for completion in September 2002. There are also plans to expand and improve the domestic Qantas Club Lounges in Perth, Gold Coast, Darwin, Adelaide and other ports. A highlight of the upgrade program is...

  • Page 13
    .... Keith lives in Sydney and commutes to and from Melbourne each week for work. With peak period flights between Sydney and Melbourne every 30 minutes, the frequency and business travel focus of Qantas' new Cityflyer services suit corporate customers large, medium and small. THE SPIRIT OF AUSTRALIA...

  • Page 14
    ... optometrist welcomes wife, Lee, and daughters Hayley and Livvy, home from a school holiday trip to the Gold Coast. Qantas' extensive schedule of flights and range of discounted fares make it easy for families to enjoy everything Australia has to offer the domestic traveller. p 12 THE SPIRIT OF...

  • Page 15
    ... Year of the Outback 2002 and a number of state and territory tourism awards. NEW AND INCREASED SERVICES In a major boost for Australian tourism, Qantas introduced QF 20 02 a number of non-stop services on popular tourist routes including Adelaide-Gold Coast; Brisbane-Alice Springs; Cairns-Darwin...

  • Page 16
    .... QantasLink provides important transport services for regional Australia and connections to Qantas domestic and international networks. QantasLink employs approximately 1,600 people and has: • operational bases in Hobart, Cairns and Mildura; • a Dash 8 line maintenance facility in Mildura...

  • Page 17
    ... a strong supporter of regional tourism and is involved extensively in the sponsorship and promotion of rural and regional events and organisations, including Australian Wool Fashion Awards, Armidale; Dubbo Regional Gallery; Flying Fruit Fly Circus, Albury-Wodonga; Qantas Founders Outback Museum...

  • Page 18
    ... takes quality produce and designs flavour-driven dishes for Qantas customers. Snap Fresh will be able to produce up to 20 million snap frozen meals per year for Qantas, other airlines and, ultimately, businesses in the hospitality, health care and mining industries. p 16 THE SPIRIT OF AUSTRALIA

  • Page 19
    ... - Qantas Flight Catering Limited (QFCL), Caterair Airport Services and Snap Fresh. These three businesses collectively employ more than 3,800 Australians. The Qantas Catering Group operates seven catering centres in Sydney, Melbourne, Brisbane, Cairns, Adelaide and Perth. During the year, Qantas...

  • Page 20
    ... primary products - Cargo, Mail and Express Service - on all international sectors of Qantas flights. Domestic freight is marketed by Australian air Express (AaE), a 50 per cent joint venture company with Australia Post. AaE is the largest domestic airline-haul company in Australia. Qantas Freight...

  • Page 21
    ... leader in the Australian seafood industry, Fremantle's Lobster Australia handles more than 2,000 tonnes of lobster and other seafood each year and exports across the country and into Asia. Managing Director Peter Fraser relies heavily on Qantas freight services to get the company's produce to where...

  • Page 22
    ... more spacious cabins, more headroom and larger windows than the Boeing 737-300. The speed with which Qantas selected and acquired these aircraft was unprecedented in the airline's history. The first new aircraft entered service just three months after a contract was signed with Boeing and all 15...

  • Page 23
    ... flagship aircraft of the Qantas domestic fleet, flying routes serving Sydney, Melbourne, Brisbane, the Gold Coast, Adelaide, Cairns and Ayers Rock. OPERATIONAL AIRCRAFT FLEET (as at 30 June 2002)* Aircraft Type Owned, HP & Finance Leases Other Operating Leases Total in Service Aircraft Type Owned...

  • Page 24
    ...in the private sector for indigenous people. ENVIRONMENT Qantas is committed to promoting These new partnerships complemented the company's long-term relationships with: • Art Gallery of NSW • Australian Brandenburg Orchestra • Australia Business Arts Foundation • Australian Youth Orchestra...

  • Page 25
    ... the fun and games of the Starlight Room at Sydney Children's Hospital, Randwick. Qantas supports dozens of charitable, cultural and sporting institutions and organisations each year, including the Starlight Children's Foundation which brightens the lives of seriously ill children and their families...

  • Page 26
    board of directors Margaret Jackson Chairman Geoff Dixon Chief Executive Officer Peter Gregg Chief Financial Officer Paul Anderson Non-Executive Director Mike Codd, AC Non-Executive Director Trevor Eastwood, AM Non-Executive Director Jim Kennedy, AO, CBE Non-Executive Director Trevor Kennedy...

  • Page 27
    ... 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 Services Pty Limited and the Garvan Research Foundation Fellow of the Australian Institute of Company Directors executive...

  • Page 28
    ... of the Qantas Group • monitors the performance of the Chief Executive Officer, Chief Financial Officer and executive management • monitors risk management • ensures that the market and shareholders are fully informed of material developments BOARD STRUCTURE • 11 Directors • seven...

  • Page 29
    ...Qantas Group 2002 $M 2001 $M Increase/ (Decrease) % Financial results Sales and operating revenue Net passenger revenue Net freight revenue Tours and travel revenue Contract work revenue Other sources* Sales and operating revenue Expenditure Manpower and staff related Selling and marketing Aircraft...

  • Page 30
    ... 7. Dividends 8. Total equity reconciliation 9. Segment information 10. Contingent liabilities 11. Capital expenditure commitments 12. Events subsequent to balance date Directors' declaration Independent audit report on the concise financial report Shareholder information Qantas Group five-year...

  • Page 31
    ... of the Qantas Group during the course of the financial year were the operation of international and domestic air transportation services, the sale of worldwide and domestic holiday tours and associated support activities including information technology, catering, ground handling and engineering...

  • Page 32
    ... developments in the operations of the Qantas Group and the expected results of those operations in future financial years has not been included in this Directors' Report because disclosure of the information could be unreasonably prejudicial to the Qantas Group. Directors' meetings The number...

  • Page 33
    ... by the Qantas Group. Travel benefits are available on similar terms and conditions as those offered to other senior executives and employees of the Qantas Group. The amount of non-cash benefits disclosed above has been determined on a "cost to the company" basis. Directors' fees for British Airways...

  • Page 34
    ... to be issued shares in Qantas to a number of senior executives under the Qantas Long-Term Executive Incentive Plan. These entitlements may vest and be convertible to shares between three and five years following award date, conditional on the executive remaining a Qantas Group employee and on the...

  • Page 35
    ...' and Officers' insurance policies are not disclosed, as such disclosure is prohibited under the terms of the contracts. Rounding Qantas is a company of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the Concise Financial Report...

  • Page 36
    statement of financial performance for the year ended 30 June 2002 Qantas Group Notes 2002 $M 2001 $M Sales and operating revenue Net passenger revenue Net freight revenue Tours and travel revenue Contract work revenue Other sources* Sales and operating revenue 3 9,027.5 563.6 674.4 479.1 578.0 11...

  • Page 37
    ... (RPK) Available seat kilometres (ASK) Revenue seat factor Passenger yield (passenger revenue per RPK) Average full-time equivalent employees Aircraft in service at balance date Return on total revenue Return on total assets Return on shareholders' equity * A glossary of terms appears on page...

  • Page 38
    ...lease rentals. The Qantas Group manages its foreign currency exposures by using a variety of long-term and short-term financial instruments, in accordance with its risk management policies. The overall economic impact of exchange rate movements on the profit result in comparison to last year was $51...

  • Page 39
    ... of financial position as at 30 June 2002 Qantas Group Notes 2002 $M 2001 $M Current assets Cash Receivables Net receivables under hedge/swap contracts Inventories Other Total current assets 112.5 2,386.6 697.7 385.4 173.5 3,755.7 145.5 1,496.2 241.5 332.9 142.7 2,358.8 Non-current assets...

  • Page 40
    ...net assets of the Qantas Group increased by 28.3 per cent to $4,253.5 million during the past financial year. The major items are discussed below. Review of assets • Current receivables increased by 59.5 per cent due to an increase in aircraft security deposits, short-term money market securities...

  • Page 41
    ..., plant, equipment and aircraft security deposits Proceeds from sale of property, plant and equipment Proceeds from sale and leaseback of property, plant and equipment Proceeds from sale of investments Payments for investments, net of cash acquired Loans to associates Net cash (used in) investing...

  • Page 42
    ...result of opportunities in the domestic market following the collapse of Ansett. Payments for investments made during the year for $19.3 million comprised investments in Impulse Airlines, Airport Infrastructure Finance, Travel Exchange Asia and Air Pacific. Proceeds on the sale of investments of $39...

  • Page 43
    ... current or prior financial years. Segment reporting The Qantas Group has applied the revised AASB 1005 Segment Reporting (issued in August 2000) for the first time from 1 July 2001. Individual business segments have been identified on the basis of grouping individual products or services subject...

  • Page 44
    ... NV Provision for redundancy costs Profit on sale of Mascot Head Office land and buildings Revenue relating to assets sold by an associated company Dividends received related to assets sold by an associated company Change in accounting policy for software development costs 31.2 (41.5 35.0) 41.2 43...

  • Page 45
    ...credits to shareholders who may be entitled to franking credit benefits. Qantas Group 2002 $M 2001 $M 8. Total equity reconciliation Total equity at the beginning of the year Total changes in equity recognised in the Statement of Financial Performance Contributions of equity Dividends Total changes...

  • Page 46
    ...year ended 30 June 2002 continued 9. Segment information Qantas operates predominantly in three business segments, being Aircraft Operations, Tours and Travel, and Catering. Aircraft Operations - operation of aircraft for passenger and freight services. Tours and Travel - sale of packaged holidays...

  • Page 47
    ... so. Qantas Group 2002 $M 2001 $M Analysis of total revenue by geographic region Passenger, freight and other services revenue Australia United Kingdom and Europe Japan South-East Asia/North-East Asia The Americas and the Pacific Other regions Other operating revenue Tours and travel revenue Other...

  • Page 48
    ... borrowings. To the extent a gain or loss is incurred, this is deferred until the net revenue is realised. As at 30 June 2002, total unrealised exchange losses on hedges of net revenue designated to service long-term debt were $206.2 million (2001: $329.6 million). p 46 2002 QANTAS ANNUAL REPORT

  • Page 49
    ...the financial year and the date of this Report, any item, transaction or event of a material and unusual nature that, in the opinion of the Directors, has significantly affected, or may significantly affect, the operations of the Qantas Group, the results of those operations, or the state of affairs...

  • Page 50
    ... Standard AASB 1039 Concise Financial Reports issued in Australia. The audit opinion expressed in this report has been formed on the above basis. Audit opinion In our opinion, the Concise Financial Report of Qantas Airways Limited and its controlled entities for the year ended 30 June 2002...

  • Page 51
    ... shareholders have notified that they are substantial shareholders of Qantas Airways Limited: Shareholder Ordinary Shares Held % of Issued Shares British Airways Investments (Australia) Pty Limited Principal Mutual Holding Company 332,588,055 73,105,994 21.27 5.59 2002 QANTAS ANNUAL REPORT...

  • Page 52
    ... 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 cents cents % $ $ $ M $ $M $M $M $M $M Earnings before interest and tax International airline...

  • Page 53
    ....7 Qantas group performance statistics Traffic and capacity Passengers carried Revenue passenger kilometres Available seat kilometres Revenue seat factor Aircraft in service at balance date Financial Passenger yield (per RPK) Productivity Average full-time equivalent employees RPK per employee ASK...

  • Page 54
    ... date for final dividend Final dividend payable Annual General Meeting, Adelaide Notice of meeting The Annual General Meeting of Qantas Airways Limited will be held at 2.00 pm on Thursday, 17 October 2002 in the Grand Ballroom of the Burswood Convention Centre, Perth. Financial report Shareholders...

  • Page 55
    ... Registered Office Qantas Airways Limited ABN 16 009 661 901 Qantas Centre Level 9 Building A 203 Coward Street Mascot NSW 2020 Australia Telephone Facsimile Website 61 2 9691 3636 61 2 9691 3339 www.qantas.com Stock Exchange Australian Stock Exchange 20 Bridge Street Sydney NSW 2000 Australia...

  • Page 56