Qantas 2011 Annual Report Download - page 21

19 ANNUAL REPORT 2011
for the year ended 30 June 2011
Review of Operations continued
Qantas Domestic and QantasLink continued to deliver signicant contributions to the Qantas Airlines result, with growth in both yield and
capacity for the year. QantasLink added y-in-y-out charter capability with the acquisition of Network Aviation Group. This has broadened
QantasLink’s earnings base and provides an additional channel for protable growth through exposure to the resources market.
The result also includes the continuing losses of the Qantas International business. Total losses for the year exceeded $ million,
representing an unacceptable return on the $ billion of capital invested in the business. Management is focused on addressing the
performance of Qantas International and executing its strategy to restore competitiveness and protability.
Investment in Product and Service
Qantas Airlines continues to invest in customer experience leadership and innovation, whilst maintaining a focus on protable growth
opportunities. Highlights in  for Qantas include:
— Roll-out of faster, smarter check-in technology at all major cities and selected regional airports
— Delivery of superior on-time performance with domestic market leadership in  out of  months and for each of the last  years
— Major enhancements to the Qantas Frequent Flyer program including the announcement of “Platinum One” - creating a new level of VIP
recognition for Qantas’ most frequent yers, greater ability to earn points, improved upgrade experiences and broader redemption options
— Launch of direct ights from Sydney to Dallas, delivering unprecedented access between North America and Australia
— Domestic product relaunch – enhancements to Business Lounges, Qantas Clubs and inight offering
— Introduction of new domestic fare structure to provide an improved booking experience to customers with a range of user-friendly
and exible fare options
— Renewal of . per cent of corporate accounts and a further  per cent growth in new accounts (primarily SMEs)
— Continued progress of the international eet reconguration program that will see nine Bs upgraded to A product standard
and the A eet recongured over time to meet forecast changes in market demand
QFuture
QFuture is the key business change program within Qantas, designed to position the airline for protable growth. It involves transformational
change across the airline, with total benets of $. billion targeted over the three nancial years  to  to underpin unit cost reduction
and margin improvement.
The QFuture program remains on track with $ billion of benets achieved in the rst two years. $ million of benets were achieved in ,
on top of the $ million achieved in . The majority of the benets in  were contributed by cost savings and margin improvement
initiatives across Qantas’ Commercial, Engineering, Cabin Crew and Procurement business units.
Jetstar
Jetstar achieved a record Underlying EBIT result of $ million for the year ended  June , an increase of $ million on the prior year
result of $ million. The result is  per cent above the prior year, driven by a  per cent increase in total revenue and continuing
improvements in unit cost.
  Change % Change
Total revenue $M , ,  
Seat factor %. . (.) ()
Underlying EBIT $M    
Jetstar’s result reects the strengthening of its competitive position in the leisure travel market across Asia-Pacic. Both Jetstar and Jetstar Asia
have been able to maintain growth in capacity and passengers, while also improving yield.
Jetstar grew overall capacity by  per cent in . This includes growth in domestic capacity of  per cent, international capacity of
 per cent and Jetstar Asia of  per cent. Overall passenger numbers grew  per cent versus the prior year.
Unit Cost (excluding fuel, adjusted for increased sector length and natural disasters) has improved by  per cent compared to the prior year.
Jetstar’s record result was achieved despite the nancial impact of weather events and natural disasters during the year. These impacted
several key markets for Jetstar and thousands of customers. The total nancial impact on the Jetstar segment was $ million.
Jetstar is committed to pan-Asian and New Zealand expansion with long and short-haul growth in Singapore and New Zealand. The Jetstar
Group is focused on growing its regional presence through intra-Asian expansion and the establishment of new Jetstar afliates in key
strategic locations.
Jetstar has expanded network and distribution channels with new interline and codeshare partners and by leveraging both current and
prospective Asian franchise operations.
Investment in Product and Service
While focused on its low fare leadership, Jetstar also continued its investment in innovation, including in the area of airport self-service and the
imminent introduction of iPads for inight entertainment use.
The Jetstar MasterCard, launched in late , continues to go from strength to strength with over , cards now on issue. The Jetstar
MasterCard remains the best value credit card with a ight reward program in Australia.
The Jetstar.com mobile website allows customers to create new bookings, change existing bookings and check their ight status. Visitor and
booking numbers to the mobile version of Jetstar.com are showing strong increases.
In May  Jetstar successfully relaunched its fare product range with new, simple fare options that provide more choice, exibility and lower
fares by allowing customers to select only what they need. Jetstar customers now start with the economy Starter fare (replacing JetSaver Light,
JetSaver, JetFlex and JetPlus), then personalise their experience from an expanded range of options.