Qantas clocks record profit after painful cuts

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Top Australian airline Qantas Airways has posted a record annual profit and declared its first final dividend in eight years, as it reaped the benefits of a painful restructure undertaken in the face of fierce global competition. Hayley Platt reports.

Qantas clocks record profit after painful cuts

Flying high is not a phrase that’s been used much at Qantas of late – on the business side anyway.

But things have clearly changed at Australia’s top airline.

It’s just reported a record annual profit of $1.08 billion U.S. dollars and its first final dividend in eight years.

(SOUNDBITE) (English) QANTAS CHIEF EXECUTIVE OFFICER, ALAN JOYCE, SAYING:

“This is the best result in Qantas’s 95-year history and the best result in Australian aviation history, full stop.”

It’s been a painful process.

The flying kangaroo has shed thousands of staff, taken billions of dollars in writedowns and cut flights to keep ticket prices up.

It’s also withheld dividends – prompting shareholder fury.

(SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING:

“If you look at where Quantas was two or three years ago, it was looking potentially at bankruptcy, it was looking at a record loss and now it’s turned around a record profit. I think it has been helped in some respects by the lower oil price and lower fuel prices, that’s certainly helped fatten its margins.”

The end of a fares war with Virgin helped too.

But competition remains tough.

(SOUNDBITE) (English) QANTAS CHIEF EXECUTIVE OFFICER, ALAN JOYCE, SAYING:

“We’re confident in our ability to navigate through all market conditions in the short term and we’re hugely excited about our opportunities over the long term.”

Qantas shares rose five percent.

But there are concerns that current growth is based largely on cost-cutting.

Sales only grew three percent despite costs shrinking by 17 percent.

Tags : cuts, Painful, after, profit, record, Clocks, Qantas

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