Qantas Group Strengthening the Business Gareth Evans, Acting CFO - - PDF document

Qantas Group Strengthening the Business

Gareth Evans, Acting CFO Qantas 6 May 2010

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Age nda

• Qa nta s Gro up stra te g y
• T

he po we r o f Qa nta s a nd Je tsta r

• Optimising po rtfo lio b usine sse s - Qa nta s F

re q ue nt F lye r (QF F )

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Qantas Gr

• up

Two Flying Brands Portfolio Businesses

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Qantas Gr

• up Str

ate gy

2010 Ke y pr ior itie s

• Ma ximising po we r o f two b ra nd stra te g y
• I

mpro ving the inte rna tio na l b usine ss

• Building o n a pro fit ma ximising 65% do me stic ma rke t sha re
• Optimising po rtfo lio b usine sse s a nd inve stme nts

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T he Powe r

• f the T

wo Br and Str ate gy

• Wo rld’ s b e st pre mium a irline - Qa nta s
• Wo rld’ s b e st lo w fa re s a irline - Je tsta r
• Pre mium a nd lo w fa re s
• I

nte rna tio na l a nd do me stic

• Busine ss a nd le isure
• Sho rt a nd lo ng ha ul

Aiming to be : Unique dive r sific ation

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T wo Br and Str ate gy - Unique fle xibility

• Gro wth ra te s a djusta b le b a se d o n re turns

Qa nta s a nd Je tsta r I

nte rna tio na l a nd do me stic

• F

le e t – A330 a nd B787 tra nsfe ra b le b e twe e n b ra nds

• Ope ra tio na l e ffic ie nc y

Je tsta r - true L

CC a ppro a c h

Qa nta s - QF

uture driving e ffic ie nc y

• E

nha nc ing the Gro up’ s ma rke t po sitio n

Suc c e ssfully wo rking to g e the r o n 26 ro ute s Ma inta ining do me stic ma rke t stre ng th

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Qantas Gr

• up Str

ate gy

2010 Ke y pr ior itie s

• Ma ximising po we r o f two b ra nd stra te g y
• I

mpro ving the inte rna tio na l b usine ss

• Building o n a pro fit ma ximising 65% do me stic ma rke t sha re
• Optimising po rtfo lio b usine sse s a nd inve stme nts

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QF F – What it br ings to the por tfolio

• Stro ng a nd sta b le c a sh flo w g e ne ra tio n
• Gro wing e xte rna l po ints re ve nue stre a m
• E

xpo sure to c re dit c a rd g ro wth

• Aids c usto me r a ttra c tio n a nd re te ntio n
• E

nha nc e s Qa nta s Airline s ‘ Be st fo r Busine ss’ o ffe ring

• No pla ns to flo a t QF

F

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Value Dr ive r s

Sour c e s of Value

R e ve nue fr

• m

points sale s Wor king Capital E xpir e d Points

Ope r ating Costs

Salar ie s IT R e de mption Costs Admin L e ss:

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Str ate gy E xe c ution

Se gme ntation R e launc h Dir e c t E ar n Coalition E xpansion Se gme nte d Me mbe r Str ate gie s

• Co mple te

2007 Co mple te 2008 Co mple te 2009 June 2009 + June 2009 +

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Busine ss T r ansfor me d

• Airline Pro g ra m
• Cla ssic Awa rds o nly
• Me mb e rship sa tisfa c tio n

de c lining

• Gro wth c a ppe d b y limite d

Cla ssic Awa rds

• Ba nk disinte rme dia tio n
• F

unc tio n within ma rke ting de pa rtme nt F r

• m T

his….. T

• T

his…..

• Austr

alia’s le ading c oalition pr

• gr

am

• Re c o rd me mb e r sa tisfa c tio n
• Ma rke t le a ding a wa rds
• Be st e a rn pro po sitio n
• Me mb e rship g ro wth fro m 4.9

millio n in 2007 to 7.0 millio n to da y

• K

e y pa rtne rs in pla c e

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Suc c e ssful Dir e c t E ar n Imple me ntation

• Uniq ue po sitio n
• Pro duc t with ma jo r b a nks a nd c re dit c a rds
• Me mb e r po ints b a la nc e s & Qa nta s c a sh ho lding s pe rma ne ntly inc re a se d
• Billing s a lre a dy re a c he d pre dire c t e a rn stra te g y le ve ls
• Qa nta s no w re c e ive s c a sh e a rlie r
• Bre a ka g e b e ne fits no w with Qa nta s

Se gme ntation R e launc h Dir e c t E ar n Coalition E xpansion Se gme nte d Me mbe r Str ate gie s

Citibank St Ge or ge Bank SA ANZ Sunc or p Commonwe alth Bank We stpac Dine r s Club NAB Ame r ic an E xpre ss

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Woolwor ths Gr

• up Allianc e
• Allia nc e with Austra lia 's la rg e st re ta ile r la unc he d in 2009
• Airline lo ya lty sig nific a ntly impro ve d fo llo wing Wo o lwo rths la unc h
• Ca lte x – Wo o lwo rths – la unc hing 2010

Se gme ntation R e launc h Dir e c t E ar n Coalition E xpansion Se gme nte d Me mbe r Str ate gie s

Woolworths BWS Safeway Tandy Dick Smith Big W

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420+ Par tne r s inc luding:

Se gme ntation R e launc h Dir e c t E ar n Coalition E xpansion Se gme nte d Me mbe r Str ate gie s

Restaurants & Entertainment

• 200 + Re sta ura nts
• Big Po nd Mo vie s
• Ma g sho p.c o m.a u
• Qa nta s Bo x Offic e

Finance and Business

• GE

Mo ne y

• Sna p Printing
• L

J Ho o ke r

• Ma c q ua rie Ba nk

Travel & Travel Services

• T

ra ve le x

• Qa nta s Ho lida ys
• I

n Sky Sho pping

• QBE

T ra ve l I nsura nc e

Shopping and Cars

• Ce lla rma ste rs
• F

re q ue nt F lo we rs

• T

rive tt

• Avis

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Sour c e s of Gr

• wth

Increase Member Engagement Growing Membership

(Targeting 8 million members)

New Coalition Partners

Span of membership proposition Revenue Growth

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Dr iving Me mbe r E ngage me nt

• 7 millio n e xisting me mb e rs
• F
• c us o n me mb e r a ttrib ute s using a dva nc e d a na lytic s
• T

a rg e te d ma rke ting initia tive s

• Ac hie ve a g re a te r ‘ sha re o f wa lle t’

Se gme ntation R e launc h Dir e c t E ar n Coalition E xpansion Se gme nte d Me mbe r Str ate gie s

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Gr

• wth and E

ngage me nt

• Over 1 million

new members have joined QFF since June 2009

• Over 330,000 seats flown

from new QFF members (since Woolworths launch)

• ≈50% of these bookings are

new customers for the airline

• New QFF

members taking up new direct earn credit cards

• Members earn

awards faster by earning points with multiple partners

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F inanc ials

• E

a rning s g ro wth a c hie ve d fo llo wing re la unc h

• De fe rre d re ve nue b a la nc e o ve r $2

b illio n

• Ca sh b e ne fit fro m dire c t e a rn rush

e xpe c te d to pe rma ne ntly inc re a se fre e c a sh b a la nc e

• Ne w me mb e rs e xpe c te d to g ro w

the ir po int b a la nc e s o ve r time

Free Cash Balance at period end FY07 FY 08 FY 09 1H 10

Direct Earn Rush

6 months

Growth is being achieved in both earnings and free cash holdings

EBIT ($ mi ll ion) 128 128 163 79

147 78 310 157

FY07 FY 08 FY 09 1H 10 6 months

7 3 9 0 1 4 7 2 3 7 1 H 0 9 2 H 0 9 Accounting Adjustment

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Questions