Qantas sinks to full-year loss
Qantas has posted a net loss of AU$244 million (US$256m) for the 2011-12 financial year, as the restructuring of its international operations and high fuel prices hit the airline.
The Australian carrier, which has been hit by a series of industrial disputes since announcing plans to revamp its loss-making international operations last year, revealed that “transformation costs” have so far totalled AU$376m, while its fuel bill jumped AU$645m, or 18%, to AU$4.3bn for the 12-month period. The cost of last year’s strike action, which eventually led to the grounding of the entire Qantas fleet, was put at AU$194m.
The carrier’s underlying pre-tax profit totaled AU$95m as Qantas International’s pre-tax loss of AU$450m was offset by Qantas Domestic’s pre-tax profit of AU$600m.
The airline’s Group CEO Alan Joyce called the last 12 months “an exceptional period”, but said Qantas had made “significant progress in advancing our overall group strategy”.
“[We are] building on our strong domestic business and frequent flyer program and growing Jetstar across Asia. Qantas’ international turnaround plan is on track and set for improvement in 2012-13,” Joyce said.
Qantas has also unveiled plans to restructure its Dreamliner delivery plan. Forming part of the group’s five-year international turnaround plan, Qantas will start receiving 15 Boeing 787-8 Dreamliners as planned from the second half of 2013. The delivery of its larger B787-9s however, has effectively delayed for two years. Firm orders for 35 B787-9s will be cancelled, while options for 50 further B787-9s will be brought forward, with deliveries able to commence from 2016, should Qantas exercise the options.
“Qantas continues to practice disciplined capital management and, in the context of returning Qantas International to profit, this is a prudent decision,” Joyce said. “The B787 is an excellent aircraft and remains an important part of our future. However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the group.
“We have the right fleet strategy to deliver continued customer satisfaction and position us for sustainable growth over the long term, while enabling us to retain flexibility and manage our capital requirements appropriately,” he added.
Qantas said the fleet restructure would boost its profits by US$140m in the first half of 2012-13.