By Martin Kelly
Australia’s largest travel wholesaler, Qantas Holidays, has been hammered by consumers for failing to anticipate and meet their online needs.
Its profit before tax slumped to A$45 million – a fall of A$19 million or 29.1% – in the year to June 30.
“This result was driven by lower air travel customers, particularly in the domestic market, where the continued unbundling of product offerings accrued through the increased use of online booking,” the company said in a statement.
Or to put it in plain English, customers who once booked air and land through Qantas Holidays are now trawling travel websites for the cheapest deal and booking components separately.
Clearly, Qantas Holidays has long-term issues.
Parent company the Qantas Group remains in fair shape despite posting a net profit of A$480 million that was 30% less than the previous financial year.
No surprises that this was largely to surging fuel prices – in fact, fuel now accounts for 30% of net operating costs, up from 17% two years ago.
Investors thought it was a decent result and sent the Qantas share price up by around 5% in heavy trade.
Chairman Margaret Jackson said: “We have strong revenues and operating cashflows, improved gearing, the right aircraft and a new airline in Jetstar that has delivered strong earnings growth and industry benchmark cost containment.”
Jetstar’s profit before tax was way down, however … A$11 million compared with A$36 million … thanks around to around A$14 million in international startup costs plus higher fuel and leasing costs. Its yield also slumped by 4.8%.
Profit before tax on ‘Qantas Mainline’ operations fell 27% to A$542 million.