Qantas released their full year (July 2023 to June 2024) financial results yesterday. As expected, statutory profit, Qantas’s bottom line measure of after tax profit was down 28% to A$1.3 billion. Meanwhile, total revenue was up 11%, indicting a decline in the net margin from 9% to 6%. We say “as expected” since their half year (July 2023 to December 2023) results released in February were indicative of this trend with statutory profit down 13% while total revenue was up 12%, with the net margin declining from 10% to 8% compared to the first half of FY23.
Thanks for the write up. Jetstar Japan improved its statutory loss from $54m to $16m (net to QAN), despite a $19m net impact from depreciation in the Yen, which is a big underlying swing. JS Asia is increasing capacity 50% in FY25 although its unclear how much, if any, applies to Japan. Do you prospect Qantas could actually see benefit - cash or kind - back from this investment?
Firstly, Jetstar Japan and Jetstar Asia are unrelated entities. Qantas own 33% of the former and 49% of the latter. They're treated differently in the AFS with Jetstar Asia's part of the consolidated group whereas Jetstar Japan accounted for as an asset.
Jetstar Asia capacity guidance has nothing to do with Jetstar Japan, although they do fly two routes to Japan (SIN-OKA and SIN-MNL-KIX). Furthermore, it's a 50% capacity increase from a very low base, so in absolute terms it still represents a drop in the ocean of Jetstar's capacity. All else being held constant, it'll represent less than a 2% increase in Jetstar's capacity in FY25.
One also needs to consider the strategic importance to the group. Jetstar Asia is probably of greater strategic importance given its ability to provide online connections to a range of secondary destinations for Qantas given the concentration of capacity that Qantas have in Singapore. That might not be evident in Jetstar Asia's results directly. Many expected that Jetstar Asia wouldn't survive the pandemic. It shrunk dramatically and Qantas didn't seem in a hurry to keep it, nevertheless it's survived and rebuilding. A lot of it's recent destination additions and scheduling are clearly indicative of supporting Qantas's network. Its benefit might not be measures in its own profits, but rather the importance to support the group, something that is probably difficult to quantify.
Jetstar Japan wasn't established with that in mind. If anything, it serves greater strategic importance to Japan Airlines (given their ownership in it). Notably, in FY19 it delivered a "record profit", whatever that means ... however, the value was written down to $0 in FY20.
Thanks for the write up. Jetstar Japan improved its statutory loss from $54m to $16m (net to QAN), despite a $19m net impact from depreciation in the Yen, which is a big underlying swing. JS Asia is increasing capacity 50% in FY25 although its unclear how much, if any, applies to Japan. Do you prospect Qantas could actually see benefit - cash or kind - back from this investment?
Firstly, Jetstar Japan and Jetstar Asia are unrelated entities. Qantas own 33% of the former and 49% of the latter. They're treated differently in the AFS with Jetstar Asia's part of the consolidated group whereas Jetstar Japan accounted for as an asset.
Jetstar Asia capacity guidance has nothing to do with Jetstar Japan, although they do fly two routes to Japan (SIN-OKA and SIN-MNL-KIX). Furthermore, it's a 50% capacity increase from a very low base, so in absolute terms it still represents a drop in the ocean of Jetstar's capacity. All else being held constant, it'll represent less than a 2% increase in Jetstar's capacity in FY25.
One also needs to consider the strategic importance to the group. Jetstar Asia is probably of greater strategic importance given its ability to provide online connections to a range of secondary destinations for Qantas given the concentration of capacity that Qantas have in Singapore. That might not be evident in Jetstar Asia's results directly. Many expected that Jetstar Asia wouldn't survive the pandemic. It shrunk dramatically and Qantas didn't seem in a hurry to keep it, nevertheless it's survived and rebuilding. A lot of it's recent destination additions and scheduling are clearly indicative of supporting Qantas's network. Its benefit might not be measures in its own profits, but rather the importance to support the group, something that is probably difficult to quantify.
Jetstar Japan wasn't established with that in mind. If anything, it serves greater strategic importance to Japan Airlines (given their ownership in it). Notably, in FY19 it delivered a "record profit", whatever that means ... however, the value was written down to $0 in FY20.