Qantas 2006 Annual Report Download - page 5
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report from the
chairman and chief executive officer
To our fellow shareholders
Running an airline business presents enduring challenges.
At the time of Qantas’ Jubilee in 1970, Qantas was dealing with
42 unions, costs were rising – including huge oil price increases –
competition was fi erce, there were security concerns following
a wave of hijackings, and difficult decisions had to be made about
new aircraft purchases.
The Chairman at that time, Sir Roland Wilson, talked about
the need to restructure to face these new realities.
The past few years have seen a revival of all these problems and
there is no reason to believe the period ahead will be any easier.
Rising fuel prices, security concerns, increasing competition and
industrial relations issues will present challenges that must
be addressed within a context of accelerating change.
Over the past 12 months, against a backdrop of escalating
fuel prices and increasing competition, the company has made
remarkable progress, growing its two key fl ying brands and
moving further towards establishing a suite of efficient,
world-class associated businesses.
In 2003, we introduced Segmentation to increase transparency
of the performance of individual businesses within the Group
and provide greater clarity around their cost structures.
One of our major goals in 2006/07 will be to progress the
Segmentation process, transitioning our businesses from cost
centres to profi t centres to establish a platform upon which
they will compete internally for capital, based on their
performance and returns.
The changes we have already made and those ahead involve
difficult decisions – decisions that affect our people. Our aim,
always, is to manage any change process with sensitivity and
with the maximum level of support for affected employees.
That our people have taken on the enormous challenges of the
past year while maintaining their reputation for service excellence
and the highest safety standards is a credit to their professionalism
and a mark of their strong commitment to the Qantas Group.
Our Results
Qantas announced a profi t before tax of $671.2 million for the year
ended 30 June 2006, a 26.6 per cent decrease on the prior year.
This result was achieved in an environment of record high fuel
prices, with jet fuel prices increasing costs by almost $1.1 billion
before hedging benefi ts.
Qantas was named one of the world’s top airlines in the prestigious Skytrax World
Airline Awards, the world’s largest airline passenger survey. We have held the number
two ranking in 2005 and 2006 while some strong competitors experienced a fall in
their survey ratings – an impressive achievement that demonstrates Qantas is well
established amongst the world’s top quality airlines.
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Qantas Annual Report 2006