Qantas forecasts loss for fiscal 2011-2012
A steep hike in fuel prices, financial crises throughout the eurozone and an abundance of capacity in the market have affected Qantas’ profitability in fiscal year 2011-2012, which ends June 30. The Qantas Group expects to receive an EBIT loss in excess of $450 million for the financial year, more than double the loss it recorded in fiscal year 2010-2011.
According to a press release, the Australian carrier and its affiliates also expect to report an underlying profit before tax in the $50 million-to-$100 million range for fiscal year 2011-2012, a marked decline from the previous financial year.
Even so, the Qantas Group is projecting growth in its domestic sector, forecasting an EBIT of more than $600 million for Qantas’ and low-cost carrier Jetstar’s Australian operations. This figure is particularly impressive, according to the press release, since both carriers have contended with industrial action, sky-high fuel costs and “aggressive competitor capacity increases.”
Alan Joyce, CEO of Qantas Group, also addressed these challenges, starting that the carrier and its affiliates have “taken decisive action to mitigate loss by withdrawing from loss-making routes, reducing capital investment, and transforming Qantas engineering.”
Qantas has also redeployed capacity on routes deemed profitable, including doubling its capacity to Dallas/Fort Worth International Airport and launching service to Santiago International Airport. On the cargo side, the carrier commenced weekly cargo service to emerging manufacturing hub Chongqing, China, on April 20 — a move that demonstrates Qantas’ commitment to Asian expansion, according to a press release.