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36
QANTAS ANNUAL REPORT 2014
REVIEW OF OPERATIONS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2014
Qantas Loyalty achieved another record result with a 10 per cent improvement in Underlying EBIT to $286million. This has been
driven by strong billings growth, continuing member engagement and continued member growth, with more than 720,000 members
added over the financial year.
Billings increased by eight per cent to $1,306million. External billings are up by 10 per cent, mainly due to growth in credit card
billings driven by promotional campaigns and new products.
New growth initiatives of Qantas Cash and Aquire are already exceeding expectations.
Only 10 months from the initial launch, Qantas Cash is already providing incremental EBIT to the business. Over 300,000 members
have activated the facility and almost $500million has been loaded onto cards, making it one of the largest prepaid products in
Australia. Qantas Cash has won multiple awards including the Australian Business Award for Product Excellence and a 5-Star
Canstar rating for Outstanding Value.
Qantas Loyalty launched Aquire on 31 March 2014. The business rewards program continues to grow with close to 35,000 members
already registered in the program. Sixteen partners are currently signed up as Aquire partners across airline, financial services,
consulting services, car rentals, office supplies and other business expenses.
As the program continues to expand its product offerings, Qantas Loyalty launched a dedicated digital channel in August 2014 –
www.qantaspoints.com. The channel showcases the depth and breadth of the program and is a responsive design across all devices,
making it even easier to access all there is to know about earning and redeeming Qantas Points. Along with Qantas Points, Qantas
Loyalty also launched the Online Mall, providing new opportunities for Qantas Frequent Flyer members to earn Qantas Points when
shopping online with 17 premium Australian and International retailers such as David Jones, eBay, Net-A-Porter and The Iconic.
Qantas Loyalty announced Qantas Golf Club which will launch in the summer of 2014. This is an online program dedicated to engaging
golfers and supporting golf clubs in Australia. The Qantas Golf Club will offer easy access to play at participating golf courses, earn
Qantas Points when playing golf, receive invitations to attend Qantas Golf Club events and participate in tournaments, and access
to a range of golf travel packages, both within Australia and overseas.
Qantas Loyalty added 14 new partners to the Qantas Frequent Flyer Program during the period, providing members with expanded
opportunities to earn and redeem points. New ways to earn include Macquarie Bank Home Loans, secure Parking, iSelect, Jumeirah
Hotels & Resorts, Qantas Restaurants, Qantas Cruises and Qantas Hotels. Airline partners that joined the program this year were
US Airways, Qatar Airways, LATAM and Sri Lankan Airlines.
Qantas Freight
–Increased revenue in a competitive environment
–Full run-rate synergies from embedding the Australian air Express acquisition
–Removal of B747F hull from January 2014
–Closure of Qantas Courier Australian operations
June
2014
June
2013 Change
%
Change
Total Revenue and Other Income $M 1,084 1,056 28 3
Revenue Load Factor40 %55.1 56.2 (1.1) pts
Underlying EBIT $M 24 36 (12) (33)
Qantas Freight’s Underlying EBIT was $24million for the year ended 30 June 2014, down $12million on the prior corresponding
period, of which $11million relates to the first half of 2013/2014. The result reflects an overall reduction in international capacity of
nine per cent, including the impact of freighter hull reduction, and delivery of full run-rate synergy benefits from the Australian air
Express acquisition from the second half 2013/2014.
Due to ongoing challenging domestic conditions, the Australian operations of Qantas Couriers ceased operations on 27 March 2014.
The New Zealand operations continue to contribute positively to the Freight segment.
Reconciliation of Underlying PBT to Statutory PBT
The Statutory Loss Before Tax of $3,976million for the year ended 30 June 2014 is $3,987million down on the prior year.
Underlying PBT
Underlying PBT is the primary reporting measure used by the Qantas Group’s chief operating decision-making bodies, being the Chief
Executive Officer, Group Management Committee and the Board of Directors, for the purpose of assessing the performance of the
Group. The primary reporting measure of the Qantas International, Qantas Domestic, Qantas Loyalty, Qantas Freight and the Jetstar
Group operating segments is Underlying EBIT. The primary reporting measure of the Corporate/Unallocated segment is Underlying
PBT as net finance costs are managed centrally.
40
Revenue Load Factor – Revenue Freight Tonne Kilometre (RFTK) over Available Freight Tonne Kilometre (AFTK).