|Company Name:||Qantas Airways Limited|
|Event Title:||Q4 2013 Earnings Call Transcript|
|Event Time:||09:30 PM ET|
Good morning, everybody. Thank you for joining us today for the Qantas Group 2013 Full Year Results. Joining me are members of the Qantas executive team and I'll ask them to stand up and wave, so you can get to see them, not you Gareth. So Gareth Evans, Chief Financial Officer
Chief Financial Officer
Good morning, everybody.
Lyell Strambi, CEO of Qantas Domestic.
Chief Executive Officer Qantas Domestic
Jayne Hrdlicka, CEO of Jetstar; Lesley Grant CEO of Qantas Loyalty; Narendra Kumar, Acting CEO of Qantas International; Olivia Wirth, Group Executive Brand, Marketing and Corporate Affairs; and Andrew Parker our latest join, he has come as Group Executive Government and International Affairs.
So, I may as per normal direct some of the questions to the senior executives as we get on to issues around each of their individual businesses. Before we get into the 2013 financial results I want to briefly touch on the group strategy where the management team's focus has been over the past 12 months. The Qantas Group today represents we believe Australia's leading airlines and loyalty business but we do not take the hired one position for Qantas.
2013 was a challenging year with intense competition in the domestic and the international markets. In that environment we have continued to deliver on strategic priorities across every part of our business. We have strengthened our group's domestic position with Jetstar and Qantas holding a combined 65% of the domestic market and delivering more than 450 million in domestic earnings .
Solid progress was made in the turnaround of Qantas International. The global partnership with Emirates being the most significant of many milestones achieved in the last year. Qantas Loyalty continues to broaden its reach with new partners and revenue streams being added. And at Jetstar we are building a brand across Asia Pacific it has well-positioned for future success in the region.
We are also realistic about the tough operating environment currently facing all our lines and at Qantas we are securing our future with financial discipline. That means we are maintaining our commitment to positive net free cash flows to reduce further our debt levels. We're removing cost through initiatives like Qantas transformation and we're adopting a prudent approach to capital expenditure with 500 million on further capital reductions announced today.
We're also living within our means of managing of finances prudently building a stronger and viable business that will deliver sustainable returns to our shareholders. There is no question that 2013 was a year of top operating conditions and that is reflected in the results in the domestic market excess capacity place pressure on deals across all categories as we matched aggressive competitive growth to protect our profit maximizing market position The cost of fuel the Group's largest single expense item has remained steadily high. We have just experienced the second largest quarterly fall in the Australian dollar since the flow in 1983 and in the short term that hurts our US dollar cost base particularly increasing the cost of fuel which are now at very high levels.
At Qantas International we saw the capacity response from rivals to a new partnership with Emirates. For a tough operating environment is something Qantas is no stranger too. What we are focused on is the elements that we can control.
Cost reduction and productivity, disciplined capital expenditure, optimizing our network and fleet without significant additional investments and continuing improvement that customer experiencing and engaging our staff. The Group delivered an underlying profit before tax of a 192 million for financial year 2013 and return to a statutory profit of $6 million a significant improvement from the statutory laws of 244 million in the prior year. Qantas Domestic Jetstar and Qantas Loyalty were all profitable. While Qantas International reduced losses by half, as the business showed steady improvement against its five year turnaround plan.