Qantas 2016 Annual Report Download - page 23

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Review of Operations continued
For the year ended 30 June 2016
QANTAS LOYALTY
Metrics June 2016 June 2015 Change
Operating margin %23.8 23.1 0.7pts
Deferred revenue growth M56 108 (48)%
QFF members M11.4 10.8 5.4%
Qantas Loyalty reported a record Underlying EBIT of $346 million, the eighth consecutive year of double-digit earnings growth52.
Diversifying the Group’s non-cyclical earnings at Qantas Loyalty remains a key pillar of the Group’s long-term strategy. Highlights in
2015/16 included:
–Revenue up 6.7 per cent; strong margins maintained
–3.8 per cent growth in Qantas Frequent Flyer co-branded credit cards, outpacing industry53
–Continued growth of core Qantas Frequent Flyer coalition
–44 per cent of revenue growth coming from Loyalty businesses other than Qantas Frequent Flyer
–Record customer advocacy after program enhancements
The Qantas Frequent Flyer and Aquire programs continued to attract new partners or extensions with existing ones. Significantly for
Qantas Frequent Flyer, a new Woolworths proposition was announced that includes better member earn rates than under previous
proposition. Core to the Loyalty strategy is diversification into new businesses that leverage the assets of the 11.4 million member
base, in-house marketing expertise and digital capability. New ventures announced in the year were:
–Qantas Assure health insurance on target to deliver two to three per cent market share with a differentiated offering
–Investment in Data Republic – Australia’s first secure public data exchange platform
QANTAS FREIGHT
Metrics June 2016 June 2015 Change
Operating margin %6.5 10.7 (4.2)pts
International capacity54 B3.3 3.2 4.7%
International load55 %53.4 5 7.0 (3.6)pts
FY16
FY15
FY14
FY13
FY12
Revenue
982
$M
FY16 982
FY15 1,067
FY14 1,084
FY13 1,056
F Y12 1,013
FY16
FY15
FY14
FY13
FY12
Underlying EBIT
64
$M
FY16 64
FY15 114
FY14 24
FY13 36
F Y12 45
FY16
FY15
FY14
FY13
FY12
Revenue
1,454
$M
FY16 1,454
FY15 1,362
FY14 1,306
FY13 1,205
F Y12 1,157
FY16
FY15
FY14
FY13
FY12
Underlying EBIT
346
$M
FY16 346
FY15 315
FY14 286
FY13 260
F Y12 231
52 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.
53 Based on number of personal credit card accounts with interest free periods; growth comparison for 12 months to June 2016; RBA credit and card charges statistics.
54 International capacity measured as international available freight tonne kilometres.
55 International load is measured as international revenue freight tonne kilometres divided by International available freight tonne kilometres.
21
QANTAS ANNUAL REPORT 2016