Qantas shares slump after dire earnings warning
SHARES in Australian 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, which is headed up by Dubliner Alan Joyce, 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.