Qantas 2006 Annual Report Download - page 7

Report from the Chairman and Chief Executive Officer
A New Fleet
One of the best ways we have of conserving fuel is through
new technology aircraft, like the Airbus A380 and Boeing
787 Dreamliner.
In December 2005, the Qantas Group announced that it would
acquire up to 115 B787s, comprising 45 fi rm orders, 20 options
and purchase rights for an additional 50 aircraft.
In June 2006, Airbus advised that deliveries of the A380 would
be delayed. Qantas had expected to take delivery of its fi rst
A380 in April 2007, but this is now scheduled for late 2007.
The A380 remains the best aircraft choice for fl ying between
hubs and on dense point-to-point routes.
We have also confi rmed orders for four A330-200 aircraft –
two for Jetstar and two for Qantas.
Investment and Growth
Investment in our product and in training our people to deliver
the highest quality service has always been, and remains, an
important commitment at Qantas.
We will roll out our latest customer developments – including
new international product and fl agship Qantas Club lounges in
Sydney and Melbourne – during 2007. Our enhanced customer
service experience will be fully implemented when Qantas’ A380
fl ights commence.
Jetstar presents a major growth opportunity, and one that
we intend to use aggressively in markets where its costs and
model are better suited to the customer base.
The fi rst 12 of our B787s are earmarked for Jetstar’s new
international services, which will commence using A330-200
aircraft in November 2006. Jetstar is already showing signs that
it will replicate its domestic success in the international arena.
We also intend bringing the Jetstar Asia operation closer to the
Jetstar Group, and are looking for additional joint ventures to
complement Jetstar’s existing Singapore-based operation.
Opportunities for Associated Businesses
Growing our freight operations is a core strategy for Qantas,
aimed at diversifying and strengthening our revenue base.
We are moving to consolidate and then separate our existing
freight interests, including international and domestic freight line
haul operations, air freight terminals around Australia, logistics
centres, our 50 per cent interests in Star Track Express and
Australian air Express, and our new domestic freighter operation,
Express Freighters Australia.
The coordination of these interests will better serve our customers
and provide further opportunities for growth.
The general freight market in Australia is currently undergoing
signifi cant consolidation and we remain interested in pursuing
opportunities as they arise.
Qantas took a major step forward in establishing a world-class
maintenance repair and overhaul operation in Australia in March
2006, when we announced our commitment to keeping our wide
body heavy maintenance work onshore.
We are close to fi nalising a review of our narrow body heavy
maintenance, which will also remain in Australia.
We have had to set some tough efficiency targets to ensure
we can compete in this area, where overseas providers are able
to achieve a cost advantage of 15 to 20 per cent over Qantas.
We expect the Qantas Engineering business to grow in the years
ahead at the same time as it preserves skilled jobs in Australia.
In June 2006, Qantas announced a substantial restructure of
its catering business, which is now underway and will deliver
a signifi cant improvement in profi tability within two years.
06
05
04
03
02
06*
05*
04†
03†
02†
32,658
30,076
28,746
27,128
12,563.9
11,353.7
11,374.9
10,968.8
PASSENGERS CARRIED (000)
SALES AND OTHER INCOME ($M)
*
As reported under A-IFRS †As reported under previous Australian GAAP
5
Qantas Annual Report 2006