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​Qantas posts AU$515m first-half profit as it readies on-board Wi-Fi for March

With on-board Wi-Fi services to begin rolling out next month, Australia's largest airline has reported AU$515 million in statutory profit on revenue of AU$8.2 billion for the first half of the 2017 financial year.
Written by Asha Barbaschow, Contributor

Qantas has announced it successfully tested its on-board Wi-Fi system and expects to operate its first commercial service with free Wi-Fi in the next few weeks.

Qantas chief executive Alan Joyce told shareholders on Thursday that the airline's Wi-Fi offering will ultimately be rolled out to around 80 domestic aircraft, and later to Qantas' international and regional fleets, noting that on-board Wi-Fi is the first item on the company's overall agenda.

"This is next-generation technology that will support a level of connectivity that's 10 times faster than the typical in-flight Wi-Fi. Speeds similar to what you'd expect on the ground," Joyce explained.

"This month, we've flown a number of test flights, which showed we're on track to deliver a fantastic service to our customers when the first commercial flight takes off in the next few weeks."

In February last year, Qantas partnered with satellite communications service provider ViaSat to deliver the Wi-Fi service using the National Broadband Network (NBN) Sky Muster satellite service.

Earlier this week, Qantas announced that testing of its on-board Wi-Fi saw 140 of its passengers connected to the on-board system, with an average of 1.6 devices connected per person. During the flight, Qantas' Wi-Fi system delivered typical download speeds between 7Mbps and 12Mbps to each connected device, with Qantas noting that connection speeds of approximately 1.5Mbps are required to comfortably stream movies on most handheld devices.

According to Qantas, the faster connection speeds are made possible through the use of the NBN Sky Muster satellite service and represent a significant upgrade over older satellite technology accessed by most airlines around the world.

Qantas also said the service uses idle data capacity, with the signal reaching the aircraft as it flies through the satellite's 101 spot beams across Australia.

Originally, Qantas was expecting to deliver access speeds of up to 20Mbps per passenger.

The company also revealed earlier this month that it had partnered with Foxtel, Netflix, and Spotify to allow customers to stream content for free while on-board. To use the on-board Wi-Fi, customers will log on to the Qantas in-flight system via their own devices.

For the first half of the 2017 financial year, Qantas reported AU$515 million in statutory profit after tax, which was down by AU$173 million over the corresponding period a year prior.

Revenue and other income for the period came in at AU$8.2 billion, which was down by AU$279 million year on year.

Qantas Domestic was the airline's most profitable segment, reporting underlying EBIT of AU$371 million, down AU$16 million from the first half of the 2016 financial year.

Qantas International reported underlying EBIT of AU$208 million; the company's Jetstar Group posted underlying EBIT of AU$275 million; Qantas Freight's underlying EBIT for the six-month period was AU$27 million; and with a member base of 11.6 million, Qantas Loyalty recorded underlying EBIT of AU$181 million.

During the six months to December 2016, Qantas appointed former SAP executive Susan Doniz to fulfil the role of CIO after undertaking a global search for Luc Hennekens' replacement.

Doniz relocated from Canada to begin her new role in January, and is charged with Qantas' group-wide technology projects as well as Qantas' loyalty business.

Qantas previously turned to Amazon Web Services to help with flight planning as its legacy systems could not handle the compute power required to run analysis around determining if certain flights were possible.

Since commencing its transition to the cloud, the national carrier managed to speed up its booking processing times from batch to batch to real time; increase data processing time by 100 times; reduce the amount of code required to do the same workload by 90 percent; and cut the cost to run the service by 80 percent.

In its first-half results, Qantas said it is recognising and responding to emerging global forces, including a rapidly digitised landscape and the rise of big data. As a result, the company said it is investing in customer, brand, data, and digital initiatives.

Similarly, the company said it is also re-platforming qantas.com and jetstar.com, noting that it has recognised an increased capability to personalise its website and provide customer-specific offers.

For the 2016 financial year, Qantas reported AU$1.53 billion in underlying profit after absorbing AU$183 million in company transformation costs.

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