Thursday 19 October 2017

Qantas shares fall after Australian airline predicts massive profit drop

Australia's Qantas Airways warned on June 5, 2012 its underlying profit before tax will fall by up to 90 percent due to deeper losses at its international operations, weak travel demand and soaring fuel costs, sending its shares to a record low. Photo: Reuters
Australia's Qantas Airways warned on June 5, 2012 its underlying profit before tax will fall by up to 90 percent due to deeper losses at its international operations, weak travel demand and soaring fuel costs, sending its shares to a record low. Photo: Reuters

SHARES of Qantas Airways have plummeted to an all-time low after the Australian flagship carrier forecast a drop of up to 91pc in full-year earnings.

Qantas said European economic woes and a soaring fuel bill would probably result in losses at its international business, more than doubling in the year ending on June 30. It also faces tough competition in its home market.



Qantas expects underlying pre-tax profit in the 2011-12 fiscal year in a range of 50 million Australian dollars (€39m) to 100 million dollars - a plunge from the previous year's 552 million dollars.



"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," Qantas said in a statement.



The news pummelled the airline's stock price, which has shed 40pc in the past 11 months. Shares plunged 17.6pc by midday local time.



Qantas's international business is expected to post a loss of more than 450 million dollars in the year to June 30, more than double the loss of 216 million it posted a year earlier.



The airline's domestic operations are forecast to deliver earnings of more than 600 million dollars, up from 552 million in the previous financial year.



Qantas's net profit for the year to June 30 will be hurt by restructuring, which is forecast to cost 370-380 million dollars.

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