Leaner Qantas back in black

Press, 2 June 1984, Page 24

Leaner Qantas back in black

NZPA-AAP Sydney A leaner and healthier Qantas has announced a pre-tax profit on its airline operations of ?Aust 57.98 million after a loss of ?Au5t47.59 million the previous year. The profit for the year ended March 31 is the first since 1979 and only the fourth in the last 10 years. Qantas will pay the Federal Government a dividend of sAust6.9o million, the first since 1978. Mr Jim Leslie, the chairman of Qantas, said the result was mainly the result of stringent cost cutting and some improvement in yields on fares. Qantas has reduced its staff to 11,300 from a peak of about 14,000. Mr Leslie said the airline was at present able to break even with 56 per cent of seats sold compared with

70 per cent three years ago. It was too early to predict the current-year profit but said he hoped for a similar performance. He said traffic improved considerably in April and more people were now flying between Australia and Britain but increased comR” ” in from Pan-American Airways and Continental Airlines would see capacity between Australia and the United States west Coast increase 45 per cent this year with little likelihood of a similar increase in traffic. Qantas will start flights to Peking in September. Also in September it will take delivery of the first of three stretched upper-deck Boeing 747-300 s. The airline has nine new aircraft including six extended range Boeing 767-200 s on order at a total cost of sAustB6o million.

Mr Leslie said revenue increased 7.0 per cent to ?1,386.88M from $1,292.18M in the latest year, while expenditure, largely on fuel and wages, eased slightly to $1,328.90M from 31339.78 M. Announcing the result to Parliament, the Minister of Aviation, Mr Kim Beazley, said that by December last year the company had its lowest number of staff since 1970. Voluntary “separation” arrangements for staff cost the airline S2SM in 1982-83. Mr Beazley said although the result was good, there was no room for complacency and directors needed more scope and flexibility to direct the company’s affairs in a competitive international climate. He announced new guidelines on the future relationship between the Government and the airline, which, he said, complemented earlier decisions to increase

Qantas’s equity capital by ?60M and to approve the airline’s SB6OM new aircraft programme. In future, directors will have the power to approve all expenditure and leases for the acquisition of land, equipment, and buildings of less than SSM. This compares with the existing need for ministerial approval of land purchases over $lO,OOO, equipment from overseas worth more than $20,000 or any lease of land for more than five years. The board has been granted similar autonomy to enter into borrowings of less than SSM with a limit of S2OM on such borrowings in any one year with all ceilings to be adjusted in line with inflation. Formerly, all borrowings by the company required the Minister’s approval. All controls on the disposal of property and assets

by the company also will be removed. The Minister will retain the right to approve the creation of any subsidiary companies and investments over SSM but has given Qantas the ability to invest temporarily surplus funds in an expanded list of avenues for investment. The requirement for directors to make every effort to exceed a rate of return on capital of 3% per cent has been replaced by an obligation on them to ensure a “reasonable” commercial return for the Commonwealth on its total investment in Qantas. The Qantas board will be free in future to determine the salaries of all employees, with the exception of the two most senior company executive positions, which remain with the Minister.