Qantas reveals history-making financial results; announces Wi-Fi services

Qantas will roll out high-speed Wi-Fi services across its Australian domestic fleet for customers after striking a deal to tap into the National Broadband Network.

The ASX-listed airline giant’s CEO, Alan Joyce, revealed the plans and new partnership with global technology company, ViaSat, during his half-year results speech today to investors.

The news comes as Qantas chalked up its best calendar year result in its 95-year history, reporting an underlying profit before tax of $921 million for the half-year to 31 December 2015, up from $367m year-on-year. Statutory profit was also up nearly $700m to $983m, off revenue of $8.5bn.

On-board Wi-Fi services will be trialled this year with plans for a full rollout across all domestic passenger services in 2017. Joyce said the airline is also looking at options for its international and regional fleets.
“The challenge of providing on-board Wi-Fi in a country as vast as Australia can’t be underestimated,” Joyce said, who added providing broadband services while in-flight has been an ambition for the company for some time.

“We have experimented with on-board connectivity in the past, including on our A380s. But with this new technology, we can deliver speeds in the air that people usually expect on the ground,” he said. “So this doesn’t just mean being able to check emails and Facebook on a flight from Melbourne or Brisbane. It means streaming your favourite TV show or movie from Sydney to Perth.”

In his presentation, Joyce noted record results across of all of Qantas’ business units in the last half-year, including Qantas Domestic, Jetstar and Qantas Loyalty. He also flagged the ongoing $2bn transformation program that has enabled the airline to become a leaner, more agile and efficient organisation, the biggest change since Qantas was privatised.

The group stated it had unlocked $261m in cost and revenue benefits during its first half, meaning $1.36bn in total transformation benefits have been realised since 2014. Qantas now expects to unlock a total of $50m in transformation benefits by the end of this financial year, and said it is on track to reach its $2bn target by the end of the 2017 financial year.

“All along, we’ve kept investing in our aircraft, our product and our service. This has enabled us to earn record customer satisfaction and maintain our lead in key markets,” Joyce said. “I’m extremely proud of our people, who are working hard to transform the Qantas Group and make flying with Qantas and Jetstar better than ever for our customers.”

Other investments made into customer experience over the past year include premium lounges in Singapore, Hong Kong and Los Angeles, plus improved facilities in several capital cities across Australia. Qantas also plans to upgrade its lounge in London’s Heathrow Airport in 2017.

Within the loyalty business, Qantas reported record underlying EBIT of $176m, up $16m from its first half last year. Revenue was also up 10 per cent, with 40 per cent of new growth coming from new ventures.

Qantas also noted the core Frequent Flyer and Acquire SME loyalty programs continued to grow, with record customer satisfaction and 24 new program partners added during the six-month reporting period. Among these were a new agreement with Woolworths, an alliance that was reportedly in doubt last year after the supermarket giant launched an overhaul of its own customer loyalty program.

The company also reported 5 per cent growth in the number of Qantas Frequent Flyer co-branded credit cards, and 6.3 per cent growth in Frequent Flyer members to 11.2 million.