Qantas 2016 Annual Report Download - page 8

CEO’S REPORTCEO’s Report
Qantas’ record financial
performance this past year is
the continuation of a remarkable
turnaround, built on the safety
standards, operational excellence
and customer satisfaction delivered
by our people. That gives us the
strongest possible foundations for
the future.
It’s a performance that enabled
us to announce a cash Record
Result Bonus for non-executive
employees, in recognition of their
outstanding contribution, as well as
rewards for our shareholders and
the next phase of investment for our
customers.
Group Performance
Every part of the Group contributed
to our record result in 2015/16.
Qantas Domestic, Qantas
International, the Jetstar Group and
Qantas Loyalty all reported record
underlying EBIT and increased their
operating margins.
Two-thirds of our earnings now
come from our domestic and
loyalty businesses, and one-third
from our international operations,
underlining the diversification and
reduced volatility the portfolio
strategy gives us through economic
cycles.
The Group continues to meet both
the short-term and long-term goals
of our Financial Framework, which
shapes the way we think about
creating value for shareholders.
Role of Transformation
The biggest single driver of our
performance is the $1.66 billion
in cost and revenue benefits that
we’ve unlocked through the Qantas
Transformation program. With the
program now entering its final year,
we expect that to increase to
$2.1 billion by June 2017.
Transformation is making Qantas’
cost base competitive. Just as
importantly, it’s changed the way
we work. We’re a far more agile
company. We’ve accelerated our
adoption of new technology, digital
platforms and data analytics.
And we’ve fostered a culture that
encourages diversity, inclusion and
innovation.
Qantas is a very different company
from just a few years ago. Together
with our well-balanced Group
strategy, transformation means
we’re resilient enough to perform
in all market conditions and
outperform many of our peers.
But of course, our environment isn’t
going to stop evolving. We need to
keep controlling our costs and being
open to new ways of doing business.
Long-Term Sustainable Future
The ultimate goal of our
transformation is to secure the
sustainability of the Group.
We’re well on the way to doing that.
But it’s not just about the actions
we take in the short-term. We also
need to think about the long-term –
something that Qantas has done a
great deal of over almost a century.
When we scan our environment,
we see four global forces that are
relevant to the success of the Group
today and will have an even bigger
impact in years ahead:
> New centres of customer demand
and geopolitical influence,
especially Asia;
> Rapid digitalisation and the rise of
big data;
> Shifting customer and workforce
preferences; and
> The implications of resource
constraints and climate change.
All these trends come with
challenges, but they also bring new
opportunities for our business.
Clear Strategic Priorities
Preparing to take advantage of the
big, global trends shaping aviation
means continuing to deliver against
our clear strategic priorities:
> Putting safety and security first at
all times;
> Maximising the competitive
advantages of the Group by aiming
to be the best in every market we
serve;
> Continuing to invest for our
customers and strengthening our
brands, including renewing our
fleet, lounges, infrastructure and
technology;
> Focusing on our people, culture
and leadership, because our
skilled, engaged workforce is the
key to our success in everything
we do; and
> Acting responsibly on energy,
emissions and our supply chain,
so that we reduce the costs and
emissions of the fuel we burn,
and play a positive role in the
communities that support us.
We’re committed to advancing these
priorities in 2016/17.
06
QANTAS ANNUAL REPORT 2016