Business Description:
Qantas Airways Limited (QAN) main business is the transportation of passengers. In addition to its Qantas and Jetstar brand flying operations, the Qantas Group operates a portfolio of airline related businesses. These include Qantas Engineering, Airports, Q Catering, Qantas Freight, Qantas Defence Services, Qantas Holidays and the Qantas Frequent Flyer Program.

Strategy Analysis:
QAN's core strategy is to profitably grow its two flying brands, Qantas and low-cost Jetstar. Qantas will seek to strengthen its leading positions in premium markets. Jetstar will expand locally and into international leisure markets. QAN also has Freight and Frequent Flyer businesses. The longer term strategy for QAN is to restructure its international business in an attempt to eliminate mounting losses. The strategy laid out by the company is to reduce the capital intensity of the business by forging partnerships with carriers in certain sectors that are uneconomical. The proposed code sharing arrangement with British Airways on the European sector is one such example. The expansion of Jetstar in Asia will continue as that has been a big success story. Plans to introduce a premium service in Asia and l a new service in Japan are intriguing. QAN is also looking to take significant cost out of this business. Qantas Airways reported NPAT of $250m for the year ended 30 June 2011. Revenues from ordinary activities were $14.89bn, up 8% from last year. The 2011 results include the financial impact of the Rolls-Royce engine failure on QF 32 and the subsequent temporary grounding of the Airbus A380 fleet. The results also include the settlement agreed with Rolls-Royce ($95m) which offsets the direct financial losses incurred. Basic and Diluted EPS was 11.0 cents compared to 4.9 cents last year. Net operating cash flow was $1.78bn compared to $1.35bn last year. No dividend was declared. The group invested $2.4bn in capital expenditure during the year. This includes the purchase of 15 aircraft, progress payments on future deliveries, and continued investment in customer product and infrastructure.