Qantas posts first loss, cuts orders
Qantas has cancelled orders for 35 Boeing 787 Dreamliner aircraft to cut costs after posting a steep full-year net loss of AUD244 million compared to a net profit of AUD250 million in the previous year.
The loss was the first since Qantas was fully privatised 17 years ago. The airline blamed high fuel costs, fierce competition and industrial disputes.
The Qantas international business lost AUD450 million while the strong domestic business generated earnings before interest and tax of more than AUD600 million.
The decision to prune deliveries of 787s represents an USD8.5 billion reduction in capital expenditure at list prices, Qantas said.
Chief executive Alan Joyce called it "a prudent decision."
"The B787 is an excellent aircraft and remains an important part of our future.
"However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the group," Joyce said.
While the orders for 35 of the planes were put off, delivery of 15 787s to Qantas’ budget offshoot Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2012.
This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas’ domestic service, and the eventual retirement of Qantas’ Boeing 767 fleet.
by Ian Jarrett
Ian Jarrett
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