Qantas 2013 Annual Report Download - page 9

CEO’s Report
After a year of achievement the Qantas
Group is in a strong position.
During 2012/2013 we launched a ground-
breaking partnership with Emirates
and a new Jetstar airline in Japan; we
strengthened our network in every part
of the globe; we continued to renew
our eet; and we secured the Group’s
nancial position through the prudent
management of capital, costs and debt.
A Strong Group Performance
Qantas Domestic, Jetstar and Qantas
Loyalty are all strong and protable,
while Qantas International improved
its performance signicantly.
In the domestic market, we are
winningagainst the competition on
everymeasure, with the best airline
in each category.
Qantas and Jetstar maintained the
Group’s prot-maximising 65 per cent
share of the domestic market. With total
domestic underlying EBIT* of more than
$450 million, we remain the clear prot
leader domestically.
We also retained an 85 per cent share of
the domestic corporate travel market and
added important new accounts. And,
for the fourth consecutive year, we were
superior to the competition for on-time
performance.
Our strong domestic business is the
foundation for the global network we are
building with Qantas International. The
Emirates partnership is great news for
customers, opening up 65 destinations
across Europe, the Middle East and North
Africa, plus unique frequent yer benets.
Bookings and customer satisfaction with
the partnership have been outstanding.
At the same time, the Emirates partnership
has enabled us to strengthen our network
in Asia and in the trans-Pacic and
trans-Tasman markets. Offering almost
900 destinations around the world
through our gateway strategy, Qantas
International has a network advantage
over every other airline serving Australia.
Jetstar continues to build its presence
in Australia, New Zealand and Asia.
In 2012/2013 it reached 100 million
passengers and 100 aircraft, making
it bigger than Ryanair or Easyjet at
the same age.
With Jetstar Japan off to a strong start
and Jetstar Hong Kong working towards
approval, Jetstar is positioned for long
term success in Asia, the world’s biggest
aviation market and a region critical to
Australia’s economic future.
Qantas Loyalty continues to go from
strength to strength, reaching 9.4 million
members in 2012/2013 — at an average
rate of 2,000 new members per day. It
now has hundreds of program partners,
including Woolworths, David Jones,
Optus and all major Australian banks,
and we continue to add value to the
program through network expansion
and innovations suchas the new Qantas
Cash membership card.
Qantas in Transformation
The Qantas Transformation program
delivered substantial strategic benets
in 2012/2013. We have withdrawn from
loss-making routes, retired aircraft,
consolidated operations and improved
the economics of our eet.
Overall, we reduced Group-wide
comparable unit costs* by 5 per cent
(including a 5 per cent reduction for
Qantas International).
The Group’s eet modernisation program
continues to improve the customer
experience and increase operational
efciency. Thanks to the strong
investment we have already made in
new aircraft, our average scheduled
passenger aircraft age has reached
7.9years: its lowest level in two decades.
This, in turn, has allowed us to reduce
planned capital expenditure and achieve
our goal of positive net free cash ow.
We must continue to manage our costs
prudently given the headwinds we
face — with fuel costs, in particular, still
at near-record levels.
Satised Customers, Engaged
Employees
I am very proud of the record customer
satisfaction scores the Group is receiving.
These reect investment in aircraft,
lounges, and technology — but, most
importantly, they reect the world-class
service that our people provide.
It is not just customers who are noticing
this Group-wide focus on service.
Employee engagement scores are up by
8 percentage points across the business,
a signicant improvement, with record
engagement among customer-facing staff.
There is a new energy at Qantas that
makes it an exciting time to be working
for this great company.
We are laying the foundations for the
Qantas Group to succeed and grow
in the 21st century aviation industry,
representing the best of Australia
wherever we y.
Qantas Domestic, Jetstar
and Qantas Loyalty are all strong and
protable, while Qantas International
improved its performance signicantly.
*For explanations of non-statutory measures see the Review of Operations section in this report.
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QANTAS ANNUAL REPORT 2013