Qantas on track to deliver AU$400m in transformation benefits in FY20

Part of these transformation benefits are being underpinned by a number of digital initiatives.
Written by Aimee Chanthadavong, Contributor

Qantas has announced the company is on track to deliver more than AU$400 million in transformation benefits, after reporting that it achieved AU$188 million in transformation benefits during the half year to 31 December 2019 alone.

The company outlined that, alongside upgrading its fleet during the period, the transformation benefits gained were also underpinned by the company's efforts, for instance, in bringing further digitisation of its revenue management systems to recommending customers the right seat at the right time, and introducing agile and design thinking to enhance its processes and systems for customer management and Qantas' distribution platform.

The company said it also used data and insights, for instance, as part of its constellation flight planning system to determine the best flight paths. 

Transformation costs came in at AU$117 million for the half-year period.

The Australian airline also reported a 3.9% decline in statutory profit after tax to AU$445 million, revenue and other income increases by 2.8% to AU$94.46 billion, and an underlying earnings before interest and tax (EBIT) drop of AU$16 million to AU$900 million.

See also: New AI tech from Hitachi Vantara makes airline travel easier (TechRepublic)

Chief executive Alan Joyce said looking ahead, with coronavirus still evolving, the company expects the net negative impact of the outbreak to be AU$100 million and AU$150 million EBIT in 2H20, with group capacity in the next half year to decline by 3.8% across international and 2.3% in domestic.

"Coronavirus has meant suspending our Sydney-Shanghai service until the end of May – possibly longer," he said on Thursday.

"It's important to keep in mind that mainland China represents about 2% of our total international network. But we're seeing flow-on demand weakness on some other Asian routes – Hong Kong in particular, but also Singapore. And to a lesser extent, Japan.

"In response, the group is reducing capacity across Asia by 15%, at least until the end of May."

Qantas also added that as part of continued investment in digital transformation and customer experience, it has plans to launch a new Jetstar mobile application in 2H10.

Qantas however, is the not the only company to be impacted by the coronavirus, or COVID-19.

Just yesterday, Salesforce announced its annual in-person conference in Sydney would now be an "online experience".

"Nothing is more important than the health and safety of our stakeholders. Over the last few months, we have been closely monitoring the evolving situation with the COVID-19 Coronavirus outbreak to ensure we are taking every precaution to look after our customers, partners, and employees," the company wrote on the conference's site.

"After careful consideration of our stakeholders and reflection on our values, we've decided to change the format of our World Tour in person event on Wednesday 4 March to be an online experience."

Earlier this month, GSMA, the organiser of the world's largest mobile world conference, MWC Barcelona, announced it was cancelling the event due to concerns around the coronavirus.

It followed in similar footsteps of the organisers of DEF CON cybersecurity conference, who announced that it would put this year's China edition "on hold" for the same reasons.

Meanwhile, Black Hat Asia, which was due to take place in Singapore from March 31 to April 3 has been pushed back to later in the year. The organisers said the event would take place "in the fall".

Another event that will be disappearing due to the coronavirus is Cisco Live Melbourne, that was set to be in Melbourne during the first week of March.

"Due to ongoing concerns about the current outbreak of COVID-19 (commonly referred to as Coronavirus), Cisco has made the difficult decision to cancel Cisco Live Melbourne scheduled for March 3-6, 2020 in Australia," the company said in a statement.

"Our customers, partners and employees are our top priority and we strongly believe this is the right decision given the current circumstances. Our thoughts are with those directly impacted by this situation."

Related Coverage

Editorial standards