QANTAS CHAIRMAN Gary Pemberton has warned that, despite improved profits, further fleet expansion will have to be backed by renewed cost savings.
Qantas ended its latest financial year to the end of June with net profits up by more than one-third at A$247 million ($190 million), comfortably ahead of the predictions made at the time of its public flotation a year ago.
Pemberton adds, however, that the profit came only after making savings of $A468 million, including a rise in aircraft utilisation from an average of 11.1h to 11.8h a day.
He adds that, in part, the savings were necessary to offset the costs of adding three new Boeing aircraft to the fleet - one 767-300ER and two 737-400s - which helped take capacity up by 6.6%.
Qantas is already committed to a three-year A$430 million outlay to revamp its cabin services and another A$100 million to be spent on implementing new yield-management and reservation systems.
Pemberton warns that this spending must not be allowed to affect the airline's improving balance sheet.
"This will require a conservative approach to forward aircraft orders, increased pressure on cost-reduction programmes and a short-term emphasis on profit growth rather than market share," he says.
Source: Flight International
