Qantas Reports Big Loss as Restructuring Kicks In
Announcing a record statutory after-tax loss of A$2.8 billion ($2.6 billion) on August 28, Qantas chief executive Alan Joyce said that the Australian flag carrier has “come through the worst” as it navigates an aggressive cost-cutting program announced in February 2014.
Much of the statutory loss is accounted for by the A$2 billion ($1.8 billion) Qantas Transformation plan for up to 5,000 staff lay-offs and early aircraft retirement (requiring a significant write-down in the valuation of the Qantas fleet). Qantas reported its underlying loss before tax for the financial year ending June 30 as A$646 million ($590 million) and said that savings of A$440 million ($402 million) have already been achieved. Qantas confirmed its intention to seek new investors for its troubled international division, which it now treats as a separate business entity from its more successful domestic operations.
The carrier has been phasing out of many of its Boeing 747s, replacing them in some cases with Airbus A330s, while also delivering new 787-8s to its Jetstar subsidiary to allow other A330s to be transferred to Qantas domestic services.
Joyce also highlighted over capacity and elevated fuel costs as factors behind Qantas’s losses over the past 12 months.
Separately, the Malaysian government on August 27 approved the planned restructuring of Malaysian Airlines that will see state-owned sovereign wealth fund Khazanah take full control of the struggling carrier and delist it from the stock exchange. The plan, for which full details have yet to be confirmed, is expected to result in significant job cuts and a reduction in the long-haul network.