Qantas FY24 Annual Financial Results

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Post automatically merged: Aug 29, 2024

Full suite of announcements are available from here: Qantas Investors | Investor Centre

 

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[Mwenenzi]

QF newsroom

https://www.qantasnewsroom.com.au/media-releases/qantas-group-posts-strong-result-while-delivering-for-customers-in-fy24/

Qantas loyalty is very profitable !

Qantas Loyalty
Qantas Loyalty continued to perform strongly in FY24 with a record Underlying EBIT of $511 million as it delivered major program improvements for members.

A record number of points were earned and redeemed across the year, including a record number of reward seats booked, and there was a 14 per cent increase in the number of active members compared to the previous year.

The introduction of a new flight redemption product, Classic Plus Flight Rewards, was one of the biggest expansions of the Qantas Frequent Flyer program in its history, unlocking more redemption opportunities to drive program engagement. Classic Plus was launched on international flights in April 2024 and once rolled out on the Qantas domestic network by the end of calendar year 2024, members will have had access to more than 20 million reward seats.

Qantas Loyalty continued its expansion into holiday packages by purchasing the remaining stake in online travel business TripADeal. The acquisition will drive value in the Group by combining Qantas and Jetstar’s extensive network with the growing curated tour market, as well as benefitting members. The total transaction value of TripADeal bookings has increased four-fold since 2022.

The program continues to see growth in white-label insurance and home loan products and reached more than 800 coalition partners including major new partnerships with Ticketek and Accent Group.

 

[Gremlin]

QAN up in early trading in response, in a market that's otherwise red.

I must admit, I was particularly impressed by the picture emerging from Loyalty, especially around flywheel acceleration.

Post automatically merged: Aug 29, 2024

Supplementary Presentation has some interesting stuff relating to CR+

 

[SeatBackForward]

Qantas loyalty is very profitable !

When you get to control both sides of a quasi-currency, how could it not be profitable?

 

[jrfsp]

Unsurprisingly no new major capital investments announced

 

[Gremlin]

When you get to control both sides of a quasi-currency, how could it not be profitable?

I know your question is rhetorical, but it's by devaluing the program in a way that makes it unappealing for members to be retained. Lots of 'sky is falling' comments in the CR+ thread about how CR+ was going to be the thing that broke QFF. Clearly the opposite, but I'm still surprised by how strong some of those metrics are.

 

[SeatBackForward]

I know your question is rhetorical, but it's by devaluing the program in a way that makes it unappealing for members to be retained. Lots of 'sky is falling' comments in the CR+ thread about how CR+ was going to be the thing that broke QFF. Clearly the opposite, but I'm still surprised by how strong some of those metrics are.

What QF have done very well is to promote the idea that by earning QFF points from everyday spend you'll get to convert them into luxurious holidays. So your average QFF member (as opposed to the like who research and participate on AFF etc) is going to look at whatever option is put forward to them to convert the points they've earnt. Have 200k points from your credit card and grocery spend over the past few years? sure use Points and Pay on a J ticket, because it feels like you're being rewarded.

 

[elanshin]

I know your question is rhetorical, but it's by devaluing the program in a way that makes it unappealing for members to be retained. Lots of 'sky is falling' comments in the CR+ thread about how CR+ was going to be the thing that broke QFF. Clearly the opposite, but I'm still surprised by how strong some of those metrics are.

CR+ considerations won't affect QF loyalty balance books for a few years to come. This is sort of a medium term effect (2-5years) rather than anything short term. People still have banks of points and still need to use them. There's still lots of social media talking about reward flights.

 

[Melburnian1]

Somewhere in its presentation it boasts departure punctuality has improved.

However to passengers, it's the arrival time that matters. Late flights impose a cost on passengers: possible missed connections, business travellers late to meetings or home to family and friends in say Melbourne after a few days' work in Sydney, or missed hospital appointments.

QFd punctuality is consistently poor month-by-month, though of course it varies by individual flight and route.

QFi punctuality can be good to reasonable with the rider that when it's bad, it's atrocious with travellers sometimes suffering 24 hour delays depending on the route.

Minimal new aircraft deliveries aren't improving the median age of the fleet by much if at all. The A332s, A333s and B738s together total 100 or 101 aircraft, with a median age approaching 17. If properly maintained, safety shouldn't be a problem, but admittedly picky online YouTube reviewers sometimes point out badly worn internal fittings that occasionally have Band Aid treatments to keep them (just) serviceable.

 

[eastwest101]

Still using money to buy Qantas shares instead of investing in fleet capacity or growing the business. Reduced profit from freight, so all that conversion of passenger capacity to freight looks like it has been a waste of capital and lost opportunity for revenue.

Will take Hudson years to fix and undo the bad planning and misaligned incentives of the Joyce era. At least some pesky domestic competiors have gone broke recently, so less capacity and competition in the domestic market mean garanteed increase in domestic profits going forward.

 

[Gremlin]

CR+ considerations won't affect QF loyalty balance books for a few years to come

I completely disagree. It's already contributing to a flywheel effect.

The VERY FIRST point under the REDEMPTION heading on p28 of the Supplementary Presentation was about increased EARN.

 

[jase05]

Reduced profit from freight, so all that conversion of passenger capacity to freight looks like it has been a waste of capital and lost opportunity for revenue.

Was vitally necessary to shore up the future.
Not everything is measured by what the balance sheets look like after year one or two, it’s a long term investment in freight

 

[Gold Member]

When you get to control both sides of a quasi-currency, how could it not be profitable?

Qantas’ media release claims Qantas Loyalty offers an “Unrivalled Value Proposition”. Perhaps the Marketing Team got their hands on their ASX releases too.

“Unrivalled Value” compared to Virgin Australia? Maybe. We’re hardly comparing apples with apples here.

“Unrivalled Value” compared to almost any other Frequent Flyer Program in the world? Definitely not. The mere fact that Qantas Loyalty is so profitable is also exactly why it offers such “Unrivalled Poor Value” to everyday folk who are taken for a ride.

 

[SeatBackForward]

Unsurprisingly no new major capital investments announced

All part of their master strategy to break the shackles of the airline game and become the Qantas Frequent Flyer Bank in the financial sector.

 

[Cheatah]

Net debt increased considerably and QF Intl earnings and margins nearly halved.

And most of the planned fleet renewal hasn't yet been paid for!

 

[SeatBackForward]

Qantas in the not too distant future - QFi to fly premium routes to ie. LHR and LAX. QFd for Golden Triangle only. JQ for everything else, all wrapped around a Loyalty program that will the basis for paying for flights to allow conversion at QF's discretion.

What QF needs is some decent competition.

 

[Big John]

What QF needs is some decent competition.

+1

 

[justinbrett]

QFd for Golden Triangle only. JQ for everything else

Absolutely ridiculous. Have you booked a flight to PER or a regional destination lately? They’re making far more profit on those routes than the big 3.

QF already farmed off every route it could to JQ. Some have come back. The ones left are the ones that work for mainline.

 

[SYD]

QF already farmed off every route it could to JQ. Some have come back. The ones left are the ones that work for mainline.

and room for both QFi and JQ eg HNL, DPS etc