Qantas profits plummet

19 Aug 2009 by Mark Caswell

Qantas’s full-year profits to the end of June have fallen 87 per cent to AUS$181 million, with the carrier blaming the global economic slowdown, industrial action, Swine Flu, and A380 introduction costs.

The airline’s CEO Alan Joyce said that despite the impact of the global economic downturn, “the diversity of the Qantas Group’s operations had contributed to it being one of the few airline operators worldwide to produce a full-year profit”.

Joyce said that the 2008/9 financial year had been one of two contrasting halves for the Qantas Group, with the first half of the year “characterised by a generally favourable operating environment and strong demand”.

“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 Joyce.

“This was compounded by one-off events during the year, including protracted industrial action, H1N1 influenza and the costs associated with introducing the new Qantas A380.”

Profits for the financial year 2008/9 (to June 30, 2009) were AUS$181 million, down from AUS$1,408 million the previous year. This figure equated to a profit of AUS$288 million for the first six months, followed by a loss of AUS$107 million in the second six months.

Qantas said that key drivers of the results included weaker domestic and international demand, capacity cuts of 1.9 per cent across the group, and an estimated AUS$45 million impact on profitability caused by the H1N1 Flu virus.

The airline said it had also experienced AUS$37 million in costs associated with the introduction of the Airbus A380. Qantas currently has three of the superjumbos in operation, with another three due to be delivered this year. The carrier recently cut the number of Boeing 787 Dreamliner aircraft it has on order (see online news June 26), although in its statement Qantas said it remained committed to the programme.

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Report by Mark Caswell

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