Airline makes first annual loss since 1995 privatisation, dragged down by soaring fuel prices and international competition
Australia’s flagship carrier, Qantas Airways, swung to a worse than expected second-half net loss on Thursday, and cancelled orders for 35 Boeing 787 Dreamliner aircraft worth some $8.5bn (£5.35bn) as it seeks to cut costs.
The second-half underlying loss before tax was A$107m (£71m), compared with a A$135m profit a year earlier, according to Reuters calculations, dragged down by a soaring fuel bill and its underperforming international division.
The airline posted a full-year net loss of A$244m, its first loss since privatisation in 1995, and in line with expectations of a A$248m loss.
The carrier has embarked on a five-year turnaround strategy announced last year to improve its sagging fortunes amid tough conditions for international travel and rising competition at home.
Qantas is separating its loss-making international business from its profitable domestic unit, eliminating loss-making routes, axing 2,800 jobs and slashing capital spending over two years by A$700m.
It has faced fierce competition from Virgin on its domestic routes and battles with Asian and Middle Eastern carriers internationally.
Chief executive Alan Joyce has agreed to forgo his bonuses for 2012 because of the company’s poor performance.
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