Golden Olympics; Qantas results surprise

Juliette O'Neill
By Juliette O'Neill August 24, 2016 14:20

Golden Olympics; Qantas results surprise

Despite the empty seats, Rio’s summer Olympics has helped foreign airlines flying into Brazil, which have been cutting back capacity as the economic decline in the country started to affect demand.

British Airways has pointed to a surge in passenger numbers during the Olympics even though it resulted in net loss for the airline since high yielding business passengers put off travel to London from Brazil during this period. For American Airlines, however, which has few business passengers from the country has benefitted from increased demand for services to Brazil, which was confirmed by American’s president, Scott Kirby in a July investor call: “Usually the Olympics, World Cups, conventions are a negative for revenues because business travellers just stay away because they can’t get hotels, because they’re worried about the crowds. In this case, Brazil is so bad that there is no business traffic or close to no business traffic. And so, this year, I think it will be a positive just because Brazil has fallen so much before.” The American carrier added additional flights during August to capture as much of the Brazil bound passenger traffic as possible. It added a daily flight from New York’s JFK airport to Rio for several days in the beginning of August for the start of the Olympics and added a daily flight during the final week of the competition. The Olympics will have provided a boost in passenger numbers and load factor for American Airlines flights between the U.S and Brazil this quarter. The airline was also expecting to benefit from the through traffic to the Olympics from Asia. All of this will only be confirmed once the airline releases its August traffic figures next month.

On August 22, to coincide with the closing of the Games, Rio welcomed the first A380 commercial flights into Tom Jobim International Airport, which has joined the list of the 230 A380 compatible airports around the world.

Rio now offers three A380 parking stands to allow future A380 scheduled operations. As a result of steady certification efforts in recent years, four airports in Latin America are now ready to welcome A380 commercial operations and support long-term air traffic growth in the region. Joining Tom Jobim International Airport are Benito Juarez Mexico City Airport, Sao Paulo-Guarulhos International Airport and Cancun International Airport.

Meanwhile, Qantas has reported record profits after restructuring. The Australian flag carrier doubled its annual profits to post a record A$1.42bn ($1.1bn) for the 12 months to the end of June 2016. The profit before tax of A$1.42bn for the year was nearly double the previous year’s A$789 million. All divisions – domestic, international and budget carrier subsidiaries – have reported record underlying earnings for the past year. This is a stark turnaround for the airline, which reported record losses of A$2.8bn ($2.6bn) in the year to June 2014. It has only been made possible due to some hard changes by the airline that has involved cutting capacity and staff, aided by the low fuel prices. Qantas has also announced that it will pay a final dividend to shareholders of 7 cents per share – for the first time since 2009 –  as well as a bonus for staff of A$3,000.

“Transformation has made us a more agile business, created value for our shareholders and given us a platform to invest for the future” said Qantas chief executive Alan Joyce.

Qantas shares rose by more than 4% on the news.

Juliette O'Neill
By Juliette O'Neill August 24, 2016 14:20