Freight only weak division during bumper FY2016 at Qantas

Qantas’ results for fiscal year 2016 are out, and the airline’s cargo business still turned a profit – albeit less than the year before –  despite what CEO Alan Joyce called, “a tough cargo market.” Qantas Freight reported underlying EBIT (earnings before interest and taxes) of US$48.75 million, down 44 percent on last year. That said, cargo lagged behind other divisions, most of which posted “record profits” according to the carrier’s annual report.

Overall, Qantas recorded record net profit, record revenue, record EBIT for FY2016, and also reported record EBIT in four of its five reporting divisions. The fifth division, Qantas Freight, was the exception, reporting cargo revenue down 9 percent from the previous year to $650 million.

The company said the results “reflect difficult global cargo markets and the end of favorable legacy agreements with Australian Air Express, impacting yields.” However, looking ahead, Qantas said the Freight division “is well-positioned for the future,” citing its new, long-term deals in the domestic market with Australia Post and Toll, two of the country’s largest freight customers. Qantas Freight also said it is pursuing new opportunities internationally, particularly on triangular Australia-China-U.S. routes.

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