All eyes on Qantas annual results

The attention of the airline industry will be on Qantas on Aug. 23, when the carrier will announce its full-year results for the financial year through June 30, and give new details about how dire its financial situation is.

There shouldn’t be too many surprises at the overall level, as the airline has already warned that it will be reporting an underlying profit but a statutory loss. According to guidance in June, the underlying profit before tax is estimated at A$50-$100 million, down considerably from the previous year. The international operation expected to report an EBIT loss of more than A$450 million.

The broader message could be similar to what CEO Alan Joyce said in his most recent public speech, at the American Chamber of Commerce in Sydney on Aug. 8 (the most interesting parts are towards the end). He said the carrier’s transformation plan is on track, adding that “we have the right strategy, we are executing at speed, we are seeing early results, and the benefits will flow within the next 12 months.” Joyce also said that he is sticking to his commitment that the international operation would be profitable again within three years.

But the devil will be in the details. Analysts and others in the local aviation industry will be watching closely to see which parts of the business are performing better (or worse) than others. As well as the well-documented woes on the international front, there has been heavy media interest lately in how the domestic operation is faring against competition from Virgin Australia. Joyce is unlikely to escape questions on that topic.

There will also be plenty of questions about the carrier’s talks with potential code-share partner Emirates. So far, Qantas has admitted it is talking to Emirates, but its official line is that this is only one of the carriers it is talking to about a partnership. It could be too early for much more clarity to emerge on this front.

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