Qantas posts 87% drop in full-year profit

Wednesday 19th August 2009

Qantas Airways, Australia’s biggest airline, posted an 87% decline in full-year earnings as the global slowdown weakened demand in the second half and rivals added capacity.

Net income tumbled to A$123 million in the 12 months ended June 30, from A$970 a year earlier, the airline said in a statement. Pretax earnings of A$181 million reflected a first-half gain of A$288 million and a second-half loss of A$107 million. Revenue declined 6.8% to A$14.6 billion.

“During the second half, the environment deteriorated, with domestic and international competitor capacity continuing to grow and demand in key markets softening quickly as the global slowdown hit,” said chief executive Alan Joyce.

“There has never been a more volatile and challenging time for the world’s aviation industry.”

Qantas announced a three-year plan to slash costs by A$1.5 billion, by using less fuel, making better use of its aircraft and adding more efficient planes. It managed to post a full-year profit while many airlines have made losses.

The International Air Transport Association has forecast global airline losses of US$9 billion this year.

Shares of the airline climbed 5% to A$2.73 and have declined 3.8% this year while the S&P/ASX 200 index gained 19%. The airline declined to give a forecast for the current year, citing the “high level of uncertainty.” There are signs of improvement in passenger volumes while yields have stabilised, it said.

Qantas will take four additional A330-200 aircraft on six-year leases for its Jetstar unit starting in November 2010.

Businesswire.co.nz

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