Qantas has reported its first full year loss of $244 million as it international arm continues to flounder, with the airline revealing it will cancel firm orders for 35 Boeing 787-9 aircraft.
The move comes as Qantas International turned in a loss of around $450 million, with chief executive Alan Joyce branding the order cancellation a “prudent decision” given the airline’s changed circumstances since it placed the order several years ago.
The revision means a two-year delay in the group’s first B787-9 delivery, from 2014 to 2016.
However, the group stressed that all other parts of its business had been profitable over the year, with Qantas and Jetstar’s domestic networks delivering a combined underlying profit before tax of $600 million.
Underlying profit before tax came to $95 million, with Qantas blaming the worse than expected result on soaring fuel prices, costly industrial disputes and ongoing attempts turn around its international operations.
Its fuel bill hit a record high of $4.3 billion, up $645 million, while last year’s grounding during a spate of industrial action wiped $194 million from the bottom line.
Meanwhile, global aviation operating conditions had “deteriorated significantly”, Qantas said.
The group said its portfolio of businesses had faced a “challenging year”, but Joyce insisted it had made progress.
He cited a strengthened domestic network, frequent flyer program and the growth of Jetstar across Asia as achievements, and insisted its turnaround plan was “on track”.
“We are now coming off a period of high capital expenditure that has given us the youngest fleet since Qantas became a public company in 1995,” he said.
“We will continue to invest capital efficiently as we target greater competitiveness and customer satisfaction to deliver a stronger Qantas Group.”
