Despite domestic customer satisfaction sitting at an all time high, the Australian flag carrier, Qantas has downgraded its profit earnings for the 2011/12 financial year, expecting a $450 million loss in earnings before interest and tax.
Citing structural issues, fuel and global economic factors for the fall from $216 million during the 2010/11 financial year, the airline¡¯s chief executive Alan Joyce said the worsening environment further reinforced the importance of the carrier¡¯s five-year growth plan.
For the financial year ending 30 June this year, the carrier is also expecting to see an underlying profit before tax between $50-$100 million as well as an EBIT of $600 million in Qantas and Jetstar¡¯s domestic market.
Counteracting future losses, Mr Joyce explained the airline would ¡°continue to practise disciplined financial management¡± including expenditure reduction of $900 million for 2012/13 to $1.9 billion.
¡°We have taken decisive action to mitigate losses in Qantas International by withdrawing from loss making routes, reducing capital investment, and transforming Qantas engineering,¡± Mr Joyce said.
¡°The introduction of a new Qantas Group structure with dedicated CEOs for Qantas International and Qantas Domestic will bring further rigour to our business.
¡°We remain focused on returning Qantas International to profitability in 2014 and for Qantas International and Domestic combined to exceed their cost of capital on a sustainable basis within five years of August 2011.¡±Despite the losses, Mr Joyce added that the Group was still in a strong funding position, with operating cashflow, cash reserves and available debt to cover its future capital commitments.
Tuesday, June 05, 2012
QF warns of losses
Source = e-Travel Blackboard: N.J