Qantas 2004 Annual Report Download - page 3

Qantas Annual Report 2004 1Spirit of Australia
Qantas achieved a record profit in 2003/04. The Company
reported a profit before tax of $964.6 million, an increase of
92 per cent on last year’s result of $502.3 million. Net profit
after tax was $648.4 million, up 88.8 per cent from last year.
Revenue for the year totalled $11.4 billion, a decrease
of $21.2 million or 0.2 per cent. Total expenditure, including
borrowing costs, fell $483.5 million to $10.4 billion.
This excellent result was achieved in improving, but still
difficult, industry conditions.
Capitalising on a gradual recovery in both international and
domestic flying, Qantas realised a 92.8 per cent increase in
earnings before interest and tax on total international flying
to $398.9 million and a 141.8 per cent increase on total
domestic flying to $539.3 million. This outcome was
supported by substantial investment in product, on-time
performance and training that raised service standards across
the Company. Frequent Flyer and co-branded credit and
charge card areas continued to grow.
Cost and efficiency savings of $512 million offset a flat
revenue line still recovering from the effects of the war in
Iraq and SARS. Continuation of a successful fuel hedging
program partly offset rising jet fuel prices, which were
14.1 per cent higher than the previous year.
The Directors declared a fully franked final dividend of nine
cents per share, bringing total fully franked dividends for the
year to 17 cents per share.
Strategic Approach
Going forward, Qantas will strive for greater efficiency,
continue to invest in new aircraft and product, grow
operations and job opportunities and protect its reputation
as Australia’s national carrier and one of the world’s leading
airlines. We aim to compete effectively across all sectors of
the aviation marketplace and in a growing number of
markets.
The Qantas Group will invest more than $6 billion
in additional new aircraft and product over the next
three years.
Fifteen new aircraft were brought into service this year –
two Boeing 747-400ERs, three Boeing 737-800s,
three Airbus A330-300s and seven Bombardier Dash 8-
Q300s. New and more efficient aircraft, including Airbus
A330s, will also be deployed on new international routes,
such as Australia to London via Hong Kong, Australia to
Mumbai and Australia to Shanghai.
The new $385 million Qantas International Business Class,
featuring the award-winning Skybed sleeper seat, was
launched in September 2003. Skybed is now available on
all services to London, all Boeing 747 and Airbus A330
services to Hong Kong and is being progressively
introduced on other services, including to Los Angeles.
The Group’s freight operations will grow, building on new
markets in China and Europe and the synergies with
Australian air Express and with Star Track Express, which
was acquired in December 2003 for $750 million in a
joint venture with Australia Post.
The Group’s new low cost domestic carrier, Jetstar,
will build on existing and new leisure routes.
Qantas has taken 49.99 per cent ownership of a new
low cost carrier based in Singapore. The airline plans to
begin operating before the end of 2004 with three single-
aisle Airbus A320 aircraft, flying to a range of Asian
cities within five hours of Singapore. The owners will
invest a total of S$100 million in the new airline, with
Qantas contributing S$50 million. This is a modest
investment for Qantas, but an excellent opportunity
to participate in the growing intra-Asia travel market.
Flexibility in both the international and domestic fleets will
enable the Group to reduce capacity quickly, and for little
cost, in case of a major downturn.
Margaret Jackson
Chairman
Geoff Dixon
Chief Executive Officer
TO OUR FELLOW SHAREHOLDERS
QANTAS ACHIEVED A RECORD
PROFIT IN 2003/04.
GOING FORWARD, QANTAS WILL
STRIVE FOR GREATER EFFICIENCY,
CONTINUE TO INVEST IN NEW
AIRCRAFT AND PRODUCT AND
GROW ITS OPERATIONS AND
JOB OPPORTUNITIES.
Report from the Chairman
and Chief Executive Officer