Australian flag carrier Qantas expects its A$2 billion ($1.66 billion) “Qantas Transformation” cost-cutting plan and lower fuel prices to result in a profit of between A$300 million ($250 million) and A$350 million ($291 million) during the first six months of its 2015 fiscal year, the company said in a statement issued on Sunday. Fuel price declines will contribute some A$30 million ($25 million) to the company’s gains, it added.
Qantas announces its first half results for its 2015 financial year on February 26.
The company reported that the so-called transformation plan, implemented roughly a year ago, has already resulted in A$204 million of benefits in the second half of 2014, and that the program has either met or exceeded all its targets.
“Today we confirm that Qantas is set to report its best first-half result since 2010,” said Qantas CEO Alan Joyce. “This demonstrates that the strategy we have outlined to transform our business is working. This is an improvement of over $550 million compared with the first half last year, with Qantas Transformation being the primary driver of the turnaround.
“Qantas is 12 months into a three-and-a-half year program, but these strong early results give us the confidence that we will continue to meet all the targets we have set. We are committed to completing the full $2 billion program to ensure a sustainable, competitive position for the long term.”
On August 28 announcing a record loss of A$2.8 billion for 2014, Qantas said at the time the airline had “come through the worst” after announcing plans to furlough 5,000 employees and take a significant write-down in the valuation of its fleet due to early aircraft retirements. The plan calls for either the retirement or delivery deferral of 50 airplanes.
The carrier has since begun retiring its Boeing 747s, replacing them in some cases with Airbus A330s, while also delivering new 787-8s to its low-fare Jetstar subsidiary to allow the transfer of other A330s to Qantas domestic services.