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Qantas turns profit, orders jets

Qantas is once again soaring on the financial front, reporting a profit after tax of AUD$111 million for the six months to December 31, 2012.

According to the airline, the result is in line with previous guidance and reflects progress in the Group’s strategy, despite challenging conditions in international and domestic air travel markets.

All operating segments of the Group’s portfolio were profitable with the exception of Qantas International. However, the Group said losses in Qantas International were reduced by 65 per cent in 1H13 compared with 1H12.

Qantas CEO Alan Joyce used the reporting announcement to reveal the airline had purchased five more Boeing 737-800 aircraft and extended the lease on two more, as well as flagging a refresh of the airline’s Airbus A330-200 and A330-300 fleet used for intercontinental and Asian flying.

Beginning in late 2014, the Group will reconfigure the interior of 10 Airbus A330-300s and 20 A330-200s with a new flat seat in business class, refreshed economy cabin and a new inflight entertainment offering.

The A330-300s will be operated by Qantas International on its network between Australia and Asia, while the A330-200s will be operated by Qantas Domestic on routes between the east coast and Perth – enabling the final retirement of the Group’s Boeing 767s.

The Group will also purchase five additional Boeing 737-800 aircraft for Qantas Domestic (for delivery during 2014) and extend the leases on two existing B737-800s this year.

The A330 reconfiguration program and the additional B737-800 orders do not affect the Group’s planned capital expenditure of $1.6 billion in 2012/13 and $1.5 billion in 2013/14.

Joyce said the updated fleet plan matched the Group’s strategic priorities.

“We continue to invest in transforming Qantas International and strengthening the profitable Qantas Domestic business,” he said.

“Last month we announced a new schedule for Qantas International’s Asian network – today I’m delighted to confirm our plans to upgrade the A330-300 aircraft that we’ll be flying across that network.

“The refurbished aircraft will give Qantas International a truly world-class product in global aviation’s most dynamic and competitive market. Growing with Asia is a major priority for the Qantas Group and this investment underpins our commitment to the region.

“We will also upgrade 20 A330-200s for Qantas Domestic’s wide body fleet – meaning that our trans-continental flights will be operated by aircraft featuring lie-flat beds in business and the latest inflight entertainment technology.

“The upgraded A330-200s will be joined by more next-generation Boeing 737-800s for domestic short haul operations. With five additional orders, our B737-800 fleet will ultimately grow to 75 aircraft.

“Older narrow body Boeing 737-400s will be phased out by the end of 2013 and Boeing 767s by mid-2015.

“We are simplifying our fleet and making better use of the greater flexibility and higher frequencies that the B737-800s provide, while investing in what will be the best domestic onboard product anywhere in the world with the A330s.

“We know that fleet renewal is vital to customer satisfaction and we are confident that these steps will help us remain the airline of choice for domestic business travellers.

“There will also be cost savings, because the A330 and B737-800 are more fuel-efficient and require less frequent heavy maintenance than older aircraft types.

“Together with our recent announcement of orders for five additional Boeing 717 aircraft and three additional Bombardier Q400s for regional operations, the changes we’ve outlined today will ensure that we have the right fleet in every part of the international and domestic market.”

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