Skip to main content

Turbulent times for ailing Qantas after record loss

By Paul Armstrong, CNN
August 28, 2014 -- Updated 0629 GMT (1429 HKT)
Qantas' announcement about losses comes just months after it revealed 5,000 jobs would be cut.
Qantas' announcement about losses comes just months after it revealed 5,000 jobs would be cut.
STORY HIGHLIGHTS
  • Qantas reveals after-tax net loss of $2.6 billion (A$2.8 billion) for the year to June 30
  • High fuel costs, falling demand among reasons given by Qantas CEO Alan Joyce
  • Airline has been beset by problems, including industrial action, domestic price war

(CNN) -- Australia's ailing flag carrier was sent into a tailspin Thursday, as the airline reported its biggest ever loss.

In its latest report, Qantas revealed an after-tax net loss of $2.6 billion (A$2.8 billion) for the year to June 30, with the cumulative effect of high fuel costs, falling demand, and a massive writedown of its international fleet blamed.

"There is no doubt today's numbers are confronting, but they represent the year that is past," said Qantas CEO Alan Joyce, who added that he predicted a return to underlying profitability in 2015.

"We have now come through the worst. With our accelerated Qantas Transformation program we are already emerging as a leaner, more focused and more sustainable Qantas Group."

Tough times

Australia's Qantas cutting 5,000 jobs
Emirates-Qantas alliance 'neat fit'

Despite his optimism, the carrier has faced an extremely turbulent ride in recent years. In February, it announced plans to cut 5,000 positions over the next three years as it seeks to claw back costs. The airline employs 33,000 people, according to the company website. About 93% of them are based in Australia.

Qantas has also clashed with domestic unions over plans to review its maintenance operations. Union officials accused the airline of planning to outsource ground jobs at a cost of thousands of Australian jobs and of putting profits first.

The dispute came to a head in late 2011, when the carrier grounded its fleet -- with unionized pilots, engineers, ramp, baggage and catering crews effectively locked out -- affecting around 100,000 passengers at the time. The airline was eventually ordered to end the dispute by the government.

Joyce has also blamed competition, particularly in Australia's busy domestic market, for many of Qantas' problems, suggesting that rival Virgin Australia -- which has been rapidly adding flights since 2011 -- has the advantage of an "uneven playing field," as their price war intensifies.

"The Australian domestic market has been distorted by current Australian aviation policy," he said earlier this year, referring to the fact laws restrict Qantas from receiving foreign investment.

Virgin, by comparison, is supported by three foreign airlines -- Air New Zealand, Etihad and Singapore Airlines -- which helped the company raise more than $300 million in investment last year.

READ: Inflight devices: Should the Knee Defender be banned?

READ: Inside billion-dollar, super-censored inflight movie industry

ADVERTISEMENT
Part of complete coverage on
December 21, 2014 -- Updated 1746 GMT (0146 HKT)
The tragic killing of two cops could not have happened at a worse time for a city embroiled in a bitter public battle over police-community relations, Errol Louis says.
December 22, 2014 -- Updated 1327 GMT (2127 HKT)
North Korea warns the United States that U.S. "citadels" will be attacked, dwarfing the hacking attack on Sony that led to the cancellation of a comedy film's release.
December 22, 2014 -- Updated 0251 GMT (1051 HKT)
The gateway to Japan's capital, Tokyo Station, is celebrating its centennial this month -- and it's never looked better.
December 20, 2014 -- Updated 1621 GMT (0021 HKT)
More than 1.7 million children in conflict-torn areas of eastern Ukraine face an "extremely serious" situation, Unicef has warned.
December 19, 2014 -- Updated 1322 GMT (2122 HKT)
Boko Haram's latest abductions may meet a weary global reaction, Nigerian journalist Tolu Ogunlesi says.
December 19, 2014 -- Updated 1034 GMT (1834 HKT)
Drops, smudges, pools of blood are everywhere -- but in the computer room CNN's Nic Robertson reels from the true horror of the Peshawar school attack.
December 18, 2014 -- Updated 0243 GMT (1043 HKT)
The gunman behind the deadly siege in Sydney this week was not on a security watch list, and Australia's Prime Minister wants to know why.
December 18, 2014 -- Updated 0948 GMT (1748 HKT)
Bestselling author Marjorie Liu had set her sights on being a lawyer, but realized it wasn't what she wanted to do for the rest of her life.
December 16, 2014 -- Updated 2027 GMT (0427 HKT)
CNN's Matthew Chance looks into an HRW report saying Russia has "legalized discrimination against LGBT people."
December 16, 2014 -- Updated 0212 GMT (1012 HKT)
The Sydney siege has brought home some troubling truths to Australians. They are not immune to what are often called "lone-wolf" terror attacks.
Bill Cosby has kept quiet as sexual assault allegations mounted against him, but his wife, Camille, finally spoke out in defense of her husband.
December 22, 2014 -- Updated 1701 GMT (0101 HKT)
Each day, CNN brings you an image capturing a moment to remember, defining the present in our changing world.
Browse through images from CNN teams around the world that you don't always see on news reports.
ADVERTISEMENT