Profitability And Reliability Of Qantas Airways Ltd After September 11th An Examination Of Qantas` Annual Report In Order To Evaluate Its Financial Situation.

2477 words - 10 pages

TABLE OF CONTENTS1.Introduction2.Group Revenue2.1Financial Performance2.2International Operations2.3Domestic Operations2.4Subsidiary Operations3.Investments3.1Expenditure3.2Assets4.Gearing5.The Effects Of September The 11th6.Current Situation and Workforce7.Conclusion8. References and AppendixQantas Airways LimitedThis report is aimed at assessing the profitability and reliability of Qantas Airways Ltd. After a brief introduction of the company, the report will examine its annual report in order to evaluate its financial situation. It will mainly be looking at financial figures from the year 2001 and 2002. This report will then investigate the risk it involves as an investment and how it has coped with the change in market conditions after September the 11th, its current situation and what might effect the company in the future. It will conclude with some recommendations and prospects for the future.1. INTRODUCTIONQantas Airways Limited is an Australian Airline company that is primarily engaged in the provision of air transportation of passengers and freight. It was founded 1920 and originally registered as Queensland and Northern Territory Aerial Services Limited (QANTAS). It is Australia's largest domestic and international airline. It operates a fleet of 187 aircraft, serving 142 destinations in 32 countries. The company has an extensive network that spans throughout Australia and 31 other countries in Asia, the Pacific, the Americas, the United Kingdom, Europe and southern Africa (www.qantas.com.au). In addition, the company is engaged in the provision of tour and travelling services; the sale of packaged tours; the production and distribution of meals; the provision of catering services, and the provision of passenger handling services. Its subsidiaries are QantasLink, an Australian airline company that operates 380 flights daily, Qantas Flight Catering Holdings, which manages seven catering centres in six Australian ports and Qantas Holidays, which offers a range of holiday packages and it recently launched Australian Airlines, an airline company that operates flights to Nagoya, Osaka and Hong Kong.2. GROUP REVENUEQantas carried more than 27 million passengers in 2002, which is an increase of 22.5% compared to the year before.Revenue for the year totalled $11.3 billion, an increase of $1.1 billion or 11.1 per cent. Excluding the impacts of foreign exchange rate movements, total revenue increased by 10.5 per cent.Passenger revenue increased by 13.7 per cent, with RPKs growing 6.5 per cent and yield improving 6.7 per cent (2002 Qantas Annual Report)2.1. FINANCIAL PERFORMANCEProfit from ordinary activities increased by 5.7% from $597.1 million to $631m and the net profit increased by 3% to 428m compared to the year before.The net profit margin decreased from 4.01% in 2001 down to 3.78% due to more investment. They are not quite as efficient as its biggest rival Singapore Airlines (6.7%), (Financial Times, March 2003) but considerably better...

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