The largest airline carrier in Australia, Qantas Airways Ltd, said that its turnaround strategy is starting to bear fruit, considering the fact that the Australia-based company has just projected its best first half-year results in four years. The forecast is believed to be also a result from a cost-cutting programme estimated to AU$2 billion, while declining oil prices contributed as well.
The Chief Executive Officer of the company, Alan Joyce, said on a media call, cited by Bloomberg: “I’m here to complete the job that I started. With the company turning the way it is, I’m very confident that my tenure – as long as the board and shareholders are comfortable with what I’m doing – will continue.” As reported by the Wall Street Journal, Mr. Joyce also added: “Today we confirm that Qantas is set to report its best first-half result since 2010.”
The CEO Joyce also said that Qatas is to make a top priority paying its debt instead of purchasing new aircraft. The Australian company intends to stick to following its three-year reorganization plan.
On a pre-tax underlying basis, the airline carrier projects a profit, estimated within the range from AU$300 million ($249 million) to AU$350 million ($289 million) during the first half ending December. This figure came above market expectations. Qantas reported a AU$252-million loss over the same period a year earlier. It had previously projected a return to profit, but did not provide any specific numbers.
Qantas also did not provide a projection on a bottom-line net-profit basis. It, however, said that it expects all of its operating segments to swing back to profit on an underlying pre-tax basis in the first six months of the fiscal year.
Qantas Airways Ltd. was up 13.81% to close at AU$2.39 per share today on the Australian Stock Exchange, marking a one-year gain of 132.04%. The company is valued at AU$4.61 billion. According to the Financial Times, the 11 analysts offering 12-month price targets for Qantas Airways Ltd have a median target of AU$2.25, with a high estimate of AU$2.95 and a low estimate of AU$1.25. The median estimate represents a +7.14% increase from the last price of AU$2.10.
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