Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Jetstar loses ground on Trans-Tasman routes

Jetstar loses ground on Trans-Tasman routes, sends cash home to parent

By Paul McBeth

Jan. 6 (BusinessDesk) - Jetstar, the discount unit of Australian airline Qantas Airways, lost ground on trans-Tasman routes last year, though still managed to send some $156.2 million back to its parent.

The airline’s subsidiary Jetconnect, which manages the group's trans-Tasman passenger schedule, reported a 17 percent drop in profit to $8.8 million in the 12 months ended June 30, on an 11 percent drop in sales to $67 million, according to statements filed with the Companies Office.

During that period, rival Air New Zealand increased its passenger numbers on Tasman/Pacific routes 3.5 percent to 3.18 million. In the five months to Nov. 30, Air NZ lifted passenger numbers on those routes 2.9 percent to 1.36 million.

The local Jetstar unit had $147.9 million of cash at the end of its 2012 financial year, and returned capital of $98.2 million to Qantas on March 22 last year, on top of a $58 million dividend payment to its parent the same day.

Jetstar made inroads into Air New Zealand’s grip on the domestic market, reporting market share of 22.4 percent as at June 30 from 20.6 percent a year earlier, when it published the group’s annual result in August.

Sister New Zealand unit, Jetstar Airways, which employs and hires cabin and technical crew for budget brand Jetstar Airways Pty Ltd, made a profit of $2.4 million in the June year, from $1.9 million a year earlier, according to separate financial statements.

Operating income, which is derived from the wider Jetstar unit, climbed 26 percent to $26.8 million, outpacing the 25 percent increase in spending on manpower and staff of $23.4 million.

Since then, Qantas’s credit rating was cut to a sub-investment grade BB+ after warning of a first half loss of up to A$300 million, blaming a deterioration in trading conditions and a weaker return on fares.

Shares in Qantas fell 0.9 percent to A$1.09 in trading today, having plunged 27 percent in 2013. The stock is rated an average ‘hold’ based on 12 analysts compiled by Reuters, with a median target price of A$1.16.

Jetconnect recognised the Inland Revenue Department’s tax investigation into optional convertible notes case as a contingent liability, even though it used $10.3 million of tax losses against the tax department’s shortfall penalties assessment. If it wins the dispute it will reinstate the tax losses.

New Zealand's tax department is seeking to deny interest deductions claimed on the notes which were used to fund Qantas's former interest in rival carrier Air New Zealand.

The IRD contends the hybrid securities, which let companies juggle equity and debt to provide a tax advantage, were structured purely to minimise tax. The tax department has previously won in the High Court and Court of Appeal in favour of its assessment of the notes against Western Australia's Alesco Corp, and the Supreme Court will hear the case next month.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news