Australia’s Qantas posts worst-ever annual loss

DPA Sydney | Updated on August 28, 2014 Published on August 28, 2014

Australian airline Qantas on Thursday posted a full-year net loss of 2.84 billion Australian dollars (2.64 billion US dollars) in 2013-2014, its worst performance ever.

The national airline made a 1-million-Australian-dollar profit over the same period a year ago. Analysts had predicted a maximum loss of up to 1 billion dollars for the financial year ending on June 30. The results prompted a call from a leading trade union for Qantas Chief Executive Alan Joyce, the board and top management to step down.

Qantas attributed the loss to a restructuring programme costing 2 billion Australian dollars, and a 2.6-billion-dollar write-down of its fleet of Boeing jets.

The airline’s international division made a loss of 497 million Australian dollars, more than double that of a year ago. The company said increased competition, record fuel costs and subdued consumer spending were to blame.

“We have now come through the worst,” Joyce said. “With our accelerated Qantas transformation programme we are already emerging as a leaner, more focused and more sustainable Qantas group.” He said the airline “will go back into an underlying profit for the first half of the year.” The Australian Services Union (ASU) hit out at Joyce and blamed the Qantas board and management for the demise of the airline that once ranked as one of the world’s most profitable.

“We think that the board and senior management of Qantas needs to take responsibility for the result,” Ingrid Stitt, ASU vice president, told reporters. “What we have here is a CEO and a board who blame everyone else. They blame Virgin, they blame the government, the passengers and sometimes the staff. It’s time for them to look in the mirror.” Qantas has been engaged in an intense turf war with rival airline Virgin Australia.

Stitt criticized Qantas’ restructuring, saying the union did not believe it included a plan to boost revenue. At the start of the year, Qantas began a three—year restructuring scheme to cut costs and announced it would cut 5,000 jobs.

Published on August 28, 2014

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