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

 

Employment: ANZ Proposes Casualisation In Whangarei Stores

ANZ workers in Whangarei could see their incomes drop by 20 to 40 percent if the bank’s proposal to reduce the number of full-time positions goes ahead says FIRST Union national organiser Tali Williams. More>>

Finance: BNZ Develops Specialist Tāmaki Māori Banking Team

BNZ develops specialist Tāmaki Māori Banking Team to support Māori as Auckland grows More>>

Pharmaceuticals: Commerce Commission To Consider Pharmaceuticals Merger

The Commerce Commission has received an application from Pfizer Inc. seeking clearance to acquire all of the shares in Hospira Inc. More>>

Real Estate: Housing Unaffordability Issues Spread

Surging house prices in Auckland and Queenstown last month pushed home ownership even further beyond the reach of first home buyers in the two districts, according to the AMP360 Home Loan Affordability Report for March. More>>

Statistics NZ: Annual Exports To China Dip Below Australia

The value of goods exports to Australia ($8.7 billion) surpassed those to China for the year ended March 2015, Statistics New Zealand said today. More>>

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news