Qantas int'l a challenge as profits dive

23 Aug 2012 2039 | Business & Trade Fairs

The Australian flag carrier’s international network remains its “biggest challenge”, according to the airline’s head, after reporting a $244 million statutory loss after tax for the financial year 2011/12.

Announced this morning, the carrier reported an underlying profit before tax of up to $95 million for the year ending 30 June 2012, a dip in profits the airline has pinned to record high fuel costs, industrial action that took place late last year and its struggling international business.

According to results, all aspects of the Group were profitable minus its international network, which made underlying earnings before interest and tax loss of up to $450 million compared to the prior financial year.

Despite the dip, airline Group chief executive Alan Joyce said the carrier is “advancing” its Group strategy on its international business and Qantas is still “on track and set for improvement in 2012/13”.

Utlising its five year plan unveiled last year, Mr Joyce added that the airline was focused on returning to profits “and ensure it [Qantas] remains Australia’s iconic flagship carrier”.

“We said we would return Qantas International to profits in three years, and that over five years our Qantas flying businesses combined would exceed their cost of capital,” the airline’s head said.

“We are on track, and we stand by our commitment.”

While the airline’s international operations took a hit this year, Qantas’ low-cost subsidiary, Jetstar has reported underlying earnings before interest and tax of up to $203 million, up $34 million or 20 percent on the prior financial year.

According to the airline’s head, Jetstar remains one of Asia-Pacific’s largest low-cost carriers with its Asia operations placing it as the most profitable in Singapore.

Looking ahead, Mr Joyce said he expects uncertain conditions and the high Aussie dollar to continue impacting operations but predicts a three to four percent increase in overall Group capacity for the first half of FY12.

“Where we have challenges, we are addressing them,” Mr Joyce added.

“This past year we have made a series of right but tough decision in order to secure a sustainable future for Australia’s Qantas and the Qantas Group.

“Over the coming years we will reap the benefits of this decision.”

Earlier today the Australian flag carrier also announced it had cancelled a delivery order of up to 35 Boeing 787-9 aircraft, in a bid to save on expenditure commitments.