Airline issues profit warning, faces trouble with international routes
The economic insecurity in Europe, the high cost of fuel and a series of strikes and public relations gaffes last year are probable reasons behind Qantas’ announcement today that it expects its profits to fall by 90%. Growing losses in the airline’s international operations are another serious problem faced by the airline. Qantas forecasts profit before tax of between A$50 million (€39 million) and A$100m for the year ending 30 June, compared to A$552 million for the same period a year earlier.
Qantas said in a statement: “The forecast result reflects the recent deterioration in global aviation operating conditions driven by the European economic crisis, the Group’s highest ever jet fuel bill, and substantial capacity increases in the domestic market that have reduced yields.”
An industry analyst explained to the BBC: “They are in a lot of trouble with their international operations. The problem is that the competition has increased, which has put pressure on ticket prices, while the costs of operation including fuel have risen.”
[pictured: Qantas A380; courtesy Qantas]