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

Qantas Group Strengthening the Business Gareth Evans, Acting CFO Qantas 6 May 2010 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 ) � 2

Qantas Gr oup Two Flying Brands Portfolio Businesses 3 Qantas Gr oup 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 � 4

T he Powe r of the T wo Br and Str ate gy Aiming to be : � 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 Unique dive r sific ation 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 � 5 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 6

Qantas Gr oup 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 7 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 8

Value Dr ive r s Sour c e s of Value R e ve nue fr om Wor king E xpir e d points sale s Capital Points L e ss: Ope r ating Costs R e de mption Salar ie s IT Admin Costs 9 Str ate gy E xe c ution Se gme nte d Dir e c t Coalition Se gme ntation R e launc h Me mbe r E ar n E xpansion Str ate gie s � � � Co mple te Co mple te Co mple te June 2009 + June 2009 + 2007 2008 2009 10

Busine ss T r ansfor me d F r om T his….. T o T his….. Airline Pro g ra m � � Austr alia’s le ading c oalition pr ogr am � Cla ssic Awa rds o nly � Re c o rd me mb e r sa tisfa c tio n Me mb e rship sa tisfa c tio n � � Ma rke t le a ding a wa rds de c lining Be st e a rn pro po sitio n � Gro wth c a ppe d b y limite d � Cla ssic Awa rds Me mb e rship g ro wth fro m 4.9 � millio n in 2007 to 7.0 millio n to da y � Ba nk disinte rme dia tio n K e y pa rtne rs in pla c e � F unc tio n within ma rke ting � de pa rtme nt 11 Se gme nte d Suc c e ssful Dir e c t E ar n Imple me ntation Dir e c t Coalition Se gme ntation R e launc h Me mbe r E ar n E xpansion Str ate gie s 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 Ame r ic an Commonwe alth We stpac NAB Dine r s Club E xpre ss Bank St Ge or ge ANZ Sunc or p Citibank Bank SA 12

Se gme nte d Woolwor ths Gr oup Allianc e Dir e c t Coalition Se gme ntation R e launc h Me mbe r E ar n E xpansion Str ate gie s Allia nc e with Austra lia 's la rg e st re ta ile r la unc he d in 2009 � Woolworths Safeway Big W Dick Smith BWS Tandy � 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 � 13 Se gme nte d 420+ Par tne r s inc luding: Dir e c t Coalition Se gme ntation R e launc h Me mbe r E ar n E xpansion Str ate gie s Restaurants & Entertainment Finance and Business GE Mo ne y � 200 + Re sta ura nts � Sna p Printing � � Big Po nd Mo vie s � L J Ho o ke r Ma g sho p.c o m.a u � Ma c q ua rie Ba nk � � Qa nta s Bo x Offic e Travel & Travel Services Shopping and Cars � T ra ve le x Ce lla rma ste rs � Qa nta s Ho lida ys � � F re q ue nt F lo we rs I n Sky Sho pping � T rive tt � � QBE T ra ve l I nsura nc e Avis � 14

Sour c e s of Gr owth Span of membership Increase Member Engagement proposition Growing Membership (Targeting 8 million members) New Coalition Partners Revenue Growth 15 Se gme nte d Dr iving Me mbe r E ngage me nt Dir e c t Coalition Se gme ntation R e launc h Me mbe r E ar n E xpansion Str ate gie s 7 millio n e xisting me mb e rs � � F o 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’ 16

Gr owth and E ngage me nt • New QFF • Over 1 million members taking new members up new direct earn have joined QFF credit cards since June 2009 • Over 330,000 seats flown • Members earn from new QFF members awards faster by (since Woolworths launch) earning points • ≈ 50% of these bookings are with multiple new customers for the partners airline 17 F inanc ials Growth is being achieved in both 2 3 7 EBIT 6 months ($ mi ll ion) 1 4 7 earnings and free cash holdings 310 9 0 7 3 1 H 0 9 2 H 0 9 147 Accounting Adjustment 157 � E a rning s g ro wth a c hie ve d fo llo wing re la unc h 78 163 128 128 79 � De fe rre d re ve nue b a la nc e o ve r $2 FY07 FY 08 FY 09 1H 10 b illio n Ca sh b e ne fit fro m dire c t e a rn rush � Free Cash 6 months e xpe c te d to pe rma ne ntly inc re a se Balance at period end fre e c a sh b a la nc e Direct Earn Rush 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 FY07 FY 08 FY 09 1H 10 18

Questions 19