787 Compensation Lifts Qantas H1 Profit
Australia's Qantas Airways reported a 10.4 percent rise in first-half profit on Thursday, as a turnaround of its loss-making international operations gathers pace.
The result included AUD$125 million (USD$128.63 million) in compensation for delays in delivery of Boeing's troubled 787 Dreamliner, part of a package negotiated before the latest series of problems affecting the grounded jet.
Qantas, which has been battling high fuel costs, tough competition and a strong Australian dollar that has dented tourism spending, said the operating environment remained challenging and did not provide full-year profit guidance.
Underlying profit before tax for the six months to December rose to AUD$223 million from AUD$202 million a year ago.
Qantas, which reported its first full-year net loss in 17 years last year, has embarked on a broad cost-cutting regime, cutting loss-making routes, reducing staff numbers, consolidating maintenance facilities and dropping aircraft orders.
Chief executive Alan Joyce also has ambitious plans to tap the lucrative Asian market, spearheaded by an alliance with Dubai's Emirates which is due to receive final approval from Australian regulators next month.
Joyce said all parts of the group were profitable in the six months to end-December, except for the international arm, which reduced losses by 65 percent compared with a year earlier.
"We have now passed a turning point as we continue to deliver the transformation of Qantas," Joyce told reporters.
Qantas cancelled orders for 35 787s in August last year as part of its cost-cutting exercise, and said then it would receive more than AUD$300 million from Boeing due to delays in delivery.
The carrier still has firm orders for 14 Boeing 787-8 aircraft earmarked for its budget arm Jetstar and has options to order 50 of the new generation aircraft.
The 787 fleet has been grounded for the past five weeks due to problems with battery failure, compounding pressures caused by earlier delays in 787 deliveries.
Joyce said Qantas had received no formal notice of any delay to the delivery of the first plane, due in August this year.
"We think the aircraft is still going to be a great aircraft," he told reporters.