Qantas Airways Ltd has posted a full-year net loss of $257 million, the first annual loss in almost two decades. To cut costs the Australian carrier has cancelled an order for 35 Boeing jets, saving $8.5 billion.
Qantas cited high fuel prices and an industrial dispute on Wednesday as grounds for its first loss since the company was privatized in 1995.
The losses for the year ending June 30 amounted to AUS$250 million (205.1 million euros, $257 million) and were a dramatic shift from the net profit of AUS$250 million posted in the previous 12 months. The dismal result came despite a lift in revenue by 5.6 percent to 15.7 billion Australian dollars.
In a statement Qantas chief executive Alan Joyce largely blamed the company’s international arm, which he said had lost around 450 million Australian dollars. Qantas had previously warned that its international operations were struggling, in part due to the global economic crisis and record fuel costs. Its international arm was split from domestic operations earlier this year in a bid to halt the dramatic slide
In October Qantas also grounded its entire fleet for 48 hours in a battle with unions over wages, costing AUS$194 million.
“Qantas has been through an exceptional period in its history over the past 12 months,” Joyce said. He added that he had declined any bonus or pay rise and was developing a strategy to build strong domestic business and improve international operations.
“Qantas’ international’s turnaround plan is on track and set for improvement in 2012/13,” he said.
Billion-dollar order cancelled
Earlier this year Qantas’ international arm was split from its domestic operations in a bid to halt the dramatic slide in profits.
To further alter the company’s financial course, Joyce announced on Wednesday that he had cancelled an order for 35 Boeing 787-9 aircraft, which will save the company as much as AUS$8.2 billion in capital expenditure.
“The B787 is an excellent aircraft and remains an important part of our future,” he said. “However, circumstances have changed significantly since our order several years ago.”
Despite the latest round of money-saving measures Joyce declined to make a forecast for the current financial year. “With this volatility in global conditions, fuel and foreign exchange rates, as well as the ongoing internal transformation we have underway, it would be imprudent to offer profit guidance at this time,” Joyce said.