Perth routes possible as Jetstar rises

Qantas CEO Geoff Dixon believes that the Jetstar brand - which begins flying to WA next month and will soon be capable of flying from Perth internationally - is a key plank in accelerating the national carrier's post-privatisation transformation.
Cornerstones of the Qantas group expansion focus around growth of JetStar which starts domestic operations in Western Australia next month and the launching of Jetstar International next year.
At the release of the airline's half yearly results, Mr Dixon told WA Business News that the group plans "significant growth for JetStar International and new international markets for the premium brand Qantas."
Key to those plans was the order in December for 115 Boeing 787s which combine economical size of 250 - 300 seats and very long range capability to open routes such as Perth-London non-stop.
Jetstar International will operate from Perth and take over current leisure routes such as Bali while possibly opening up new destinations such as Vietnam.
Qantas says it's on target to achieve its initial saving target of $1.5 billion by the end of 2005/06. Over $1 billion of the extended target of another
$1.5 billion in savings by 2007/08 has already been identified.
Savings will come from a variety of areas including increased online bookings and moving some engineering offshore.
Despite fuel costs rising $475.1 million Qantas has posted a six month before tax profit to December 31 of $483.5 - just 3.4% down on last year.
The excellent result also includes a one-off restructuring cost of $69.6 million under the airline's Sustainable Future Program.
Net profit after tax was $352.6 million, down 9.6 per cent on the comparative half-year.
This figure reflects the impact of the restructuring charges and fuel prices, but also reflects a lower tax expense in the comparative 2004 half-year when the Qantas Group entered into Tax Consolidations.
Mr Dixon, said that Qantas' performance, like all airlines today, was more and more being influenced on an ongoing basis by the price of fuel.
"Fuel costs climbed by 58 per cent in the half year and represented 28 per cent of our net expenditure. Without our successful hedging strategies, this would have been 31 per cent."
Mr Dixon said the main contributors to the half-year results were:
- $215 million of savings under the Sustainable Future Program which resulted in a unit cost reduction, excluding fuel and restructuring costs, of 5.7 per cent.
- a 5.4 per cent improvement in yield (7.1 per cent excluding foreign exchange rate movements) and a one percentage point improvement in seat factor to 77.5 per cent.


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