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19
QANTAS ANNUAL REPORT 2015
Jetstar-branded airlines continue to focus on a differentiated low fares product offering and service standard with innovation and
investment in new technology and B787 roll out. Greater self-service, including automated bag drops and kiosk check-in, is improving
the customer experience while also delivering cost benefits. Investment in next-generation booking engine and online retailing
capabilities will drive the next wave of ancillary revenue growth.
Jetstar was awarded the best low-cost carrier in Australia/Pacific and was in the top five low-cost carriers worldwide49.
QANTAS LOYALTY
June
2015
June
2014
Change Change
%
Members M10.8 10.1 0.7 7
Billings21 $M 1,369 1,306 63 5
Underlying EBIT $M 315 286 29 10
Qantas Loyalty reported record50 Underlying EBIT of $315 million, up 10 per cent. Billings growth of five per cent reflects strong
underlying system growth, tactical campaigns with existing partners and the addition of new partners to both the Qantas Frequent
Flyer and Aquire programs. Qantas Frequent Flyer direct earn credit cards have continued to show strength, with five per cent
acquisition growth51 outperforming the industry average. Qantas Frequent Flyer reached the milestone of 10.8 million members – a
seven per cent increase.
Qantas Loyalty has continued to innovate and diversify its earnings base during the period, investing in its adjacent businesses52
and reinforcing the core coalition program. These adjacent businesses have accounted for 30 per cent of the overall Underlying EBIT
growth in the year.
Highlights include:
–$1.1 billion currency loaded on Qantas Cash cards, with 410,000 cards activated
–A 57 per cent increase in Qantas epiQure member base driving a 43 per cent growth in wine sales
–Red Planet launch and delivering profits within first year, growing its external client portfolio and delivering top line value to the airline
–Growth of the Aquire loyalty program for small to medium-sized businesses
During 2014/2015 Qantas Loyalty purchased a controlling stake in actuarial and data analytics consulting firm Taylor Fry, an
acquisition that adds to the Group’s customer insights capability and provides a new adjacent revenue stream.
The Qantas Frequent Flyer program maintained a record annual NPS53 and continues to hold a premium over competitor programs.
QANTAS FREIGHT
June
2015
June
2014
Change Change
%
Total Revenue and Other Income $M 1,067 1,084 (17) (2)
Load Factor (International)54 %57.0 55.1 1.9 pts 3
Underlying EBIT $M 114 24 90 >100
Qantas Freight also reported a record55 result in 2014/2015, with Underlying EBIT rising almost fivefold to $114 million from
$24million in 2013/2014. The significantly improved performance was led by the delivery of $38 million of benefits from the Qantas
Transformation program, including the introduction of new technology to improve productivity and customer experience, together
with strong performance from the International Freighter network. Stronger cargo load factors helped offset yield22 reductions in a
very competitive domestic freight market.
49 Skytrax World Airline Awards 2015
50 Qantas Loyalty record Underlying EBIT result compared to prior periods normalised for changes in accounting estimates of the fair value of points and breakage expectations effective
1January 2009
51 Growth 12 months to May 2015 compared to 12 months to May 2014
52 Includes Qantas Cash, Qantas Golf, Qantas epiQure, Red Planet, Accumulate and Taylor Fry
53 Average NPS 12 months to July 2015 compared to average 12 months to July 2014
54 Load Factor (International) – Revenue Freight Tonne Kilometre (RFTK) over Available Freight Tonne Kilometre (AFTK)
55 Since Freight was reported as a separate segment in 2007/2008