Qantas posts best half-year profit in four years

Joyce Image copyright Getty Images
Image caption Qantas chief executive Alan Joyce has been reducing costs aggressively since 2013

Australia's national carrier Qantas has reported its best half-year profit in four years, as turnaround plans come to fruition.

On Thursday, the firm reported an underlying profit of 367m Australian dollars ($289.3m; £186.3m) for the six months to December.

The positive results come after the firm reported its biggest ever annual loss for the 12 months to June 2014.

Shares in the Sydney-listed airline rose more than 6% following the news.

The national flag carrier has been facing tough competition in both international and domestic markets.

Ellis Taylor, of aviation news site Flightglobal, told the BBC the results were "a massive turnaround".

"The firm's cost cuts are really starting to bear results and I think this bodes well for the rest of the financial year," he said.

"The big improvement has been shown in all the arms of Qantas, including the troublesome international operation."

The carrier's international division turned a profit for the first time since the global financial crisis, posting an underlying profit before tax of A$59m.

In the domestic market, Qantas and Jetstar, the company's low-cost arm, reported earnings before tax of close to A$300m.

Qantas chief executive Alan Joyce said the firm was "meeting or exceeding all our targets as we build a sustainable future".

Image copyright Getty Images
Image caption For many months the national flag carrier said it had been facing tough competition in both international and domestic markets

Analysis: Phil Mercer, BBC News, Sydney

Six months ago Alan Joyce was fighting to save his job.

Record-breaking losses of A$2.8bn posted by Qantas for the 2013-2014 financial year had amplified calls for Qantas' Irish-born chief executive to be sacked. Critics said he was trashing a national icon.

A stunning return to profit has caused immense pain and confrontation. Alan Joyce's cost-cutting drive has seen thousands of workers laid off, which has infuriated the trade unions.

But the company insists the upheaval is making the Flying Kangaroo stronger and more resilient to the vagaries of economic cycles.

Alan Joyce says passengers are receiving the best service they've ever had; the size of in-flight meals has been increased, while Qantas Club lounges in Hong Kong, Singapore and Los Angeles have had a facelift.

Investors appear delighted with the results. Shares in Australia's national carrier rose by 6% in early trading, and have more than doubled over the last four months.

Image copyright Getty Images
Image caption After many years with British Airways, 2013 also saw Qantas form an alliance with Emirates

Efforts realised

Thursday's results beat the carrier's own forecast, made in December, for an underlying profit of up to A$350m.

The carrier said some of the main factors that had contributed to its half-year results included the removal of Australia's carbon tax together with lower fuel prices.

But it also attributed some A$374m of benefits to its turnaround efforts.

In 2013, the company announced a massive cost cutting programme that would include some 5,000 job losses.

It said it would now target A$675m of benefits from that programme, an increase from its earlier target of A$600m.

Total benefits, including A$204m realised in its 2014 financial year, would now reach A$875m by the end of June this year, the carrier said in a statement.

"Our financial position is significantly stronger because of the actions we've taken," Mr Joyce said, "and we are giving Qantas a solid foundation for growth in earnings."

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