It's tough times for Qantas Domestic, for so long the profit engine of Australia's flag carrier. "Clearly the Australian domestic market is highly competitive," Qantas CEO Alan Joyce said at today's results announcement. "Elevated levels of capacity growth from competitors attempting to claim market share … has put pressure on yield for all airlines."
Qantas Domestic pre-tax profit fell 33%, or $110m, to $218m for the six months to December 31, 2012, compared with the previous corresponding period (pcp).
However, Mr Joyce tried to paint a positive picture, claiming Qantas Domestic has 84% share of the corporate market and "during the first half we renewed 40 accounts and won 39 new accounts, including four won back from the competition."
In overall results, Qantas recorded a $111m after tax profit, much better than the pcp (+164%).
Qantas Loyalty was the star performer with a record pre-tax result of $137m (+15%). Qantas Freight had a poor half, with pre-tax profit slumping 42%, while Qantas International still lost money but not as much as last time – $91m compared with $262m.
Low cost subsidiary Jetstar pre-tax profits fell 12% to $128m, "reflecting domestic market conditions and start-up investments in Jetstar Japan and Jetstar Hong Hong".