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Qantas back in black with US$195.3 million profit after $1.9 billion loss

AUSTRALIAN flag carrier Qantas Airways reversed itself out of last year's A$408 million loss to this year's A$267 million profit (US$195.3 million) drawn on revenues of A$15.8 billion, an increase of three per cent.

Qantas Freight reported record pre-tax profit of A$114 million, compared with A$24 million in financial year 2014, driven by transformation benefits of $38 million and high load factors.

"We are halfway through the biggest and fastest transformation in our history," Qantas chief executive Alan Joyce said. "Without that transformation, we would not be reporting this strong profit."

The airline's underlying pre-tax profit for the year was A$975 million, better than analysts' expectations of A$960 million.

Qantas also announced it will take delivery of eight Boeing 787 Dreamliner aircraft from 2017 to replace five older Boeing 747s, which have shorter ranges and are less fuel efficient.

Last year's record loss included an A$2.6 billion write down of the value of its aging international fleet. Qantas also last year began reducing costs by shedding 5,000 jobs.

And the return to profitability, along with lower debt levels, has given the airline the confidence to order new Boeing 787-9 Dreamliners and offer a A$505 million capital return to shareholders.

"It is a good feeling to be at the helm of this great company as it begins the first phase of a remarkable turnaround," Mr Joyce said while handing down best full year result since before the global financial crisis.

Qantas Domestic reported pre-tax profit of A$480 million, compared with A$30 million in financial year 2014, driven by A$302 million in transformation benefits and a 4.5 per cent increase in revenue per available seat kilometre.

Qantas International reported pre-tax profit of A$267 million, a turnaround of $764 million compared with a loss of $497 million in financial year 2014. This turnaround was driven by transformation benefits of $408 million, with a six per cent increase in revenue per available seat kilometre.

The Jetstar Group reported record pre-tax profit of A$230 million, up from a loss of $116 million in financial year 2014, driven by strong performances in the Australian domestic and Australian international market.

Jetstar International achieved a record profit as it introduced more B787-8s into its fleet.

Qantas has written off its stake in Jetstar Hong Kong, with an impact of A$21 million outside of pre-tax profit, following the Hong Kong regulator's decision not to grant an operating licence to the airline.